We live in PA and are currently enrolled in a debt reduction program which we enrolled in Sept 08. Our credit is trashed and we still have 3 years to go with the program or longer, which means that our credit will not get any better until the program is over since we aren’t paying our credit cards in the program. The fees for the program were pretty steep and on top of that, when the company negotiates our dept down, they take an additional 10% on top.
Since our credit is already trashed and the debt hasn’t really gone down, we are considering Chapter 7 bankruptcy. Is this a good move?
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No, going Bankrupt should be an absolute last resort.
Acccess your total debt and make sure that you have a plan in place to get out of debt.
Priorities should be: Food, Shelter and Clothing.
Try reading the Total money makeover by Dave Ramsey.
I was $35,000 in Debt and now am debt free and on my way to becoming a millionare. You can do it too!
You need to talk to a bankruptcy attorney to find out if in your financial situation you qualify for a bk filing.
If you feel that you are struggling and would like the headache to be over, go ahead and file(as long as you qualify). Your credit should bounce back fairly quickly, whereas in the debt program, you will not have decent credit until sometime after the debts are paid in full. If you do not quality for a 7, you can always do a Chapter 13.
You will need to gather 6 months worth of paycheck stubs, the last few years of taxes, and all of your debts. It also depends on any equity you may have in your home, and other personal property.