Considering that consumer debt is at an all time high, being in this debt can feel overwhelming. Many people have looked to the internet for a source of relief and have seen advertisements touting debt relief as a quick fix. Enticing as these ads may seem, it is important to be on the lookout for the validity of the claim.

A good deal of these advertisements allege a quick fix, but that quick fix may be bankruptcy. Granted, bankruptcy is one way to deal with your financial problems, but most of the time it should be a last resort. The fact that you claim bankruptcy remains on your credit report for ten years which means that your chances of getting credit, employment, a place to live or insurance are significantly lowered.

It is always a good idea to think about other options before making the decision to file for bankruptcy. Speak with your creditors. Many times a re-payment plan can be worked out that is modified or can be paid in installments. Credit counseling services can work with you and your creditors to make debt repayment plans.

When you are thinking about a second mortgage, be cautious. These loans will require your home as collateral. Bankruptcy also has the capacity to stop foreclosures, debt collection activities and it may get rid of unsecured debts. Exemptions are provided that let you keep certain assets. However, personal bankruptcy does not usually take away child support, fines, taxes, alimony and in a few cases student loans.

It will not usually allow you to keep your property if your creditor has a security lien or mortgage that has not been paid. A relatively recent tweak in bankruptcy laws creates certain hurdles that you must overcome before you can even file for bankruptcy, no matter what type of bankruptcy. First, you have to get credit counseling from an organization approved by the government within six months before filling. Also in certain cases you have to pass a test that requires that you confirm that your income doesn’t exceed a certain amount.