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Should I file for bankruptcy due to credit card debt?

Credit card debt is a common issue for many Americans, especially during the holiday period. You may feel that you need to spend more than what you have in your bank account so that you can buy food and gifts for family and friends. While it's nice to express love through these material things, you mustn't sabotage your financial situation in doing so.

If you have found yourself in this situation, one of the best things you can do is start the new year by taking action in regard to your financial situation. If you believe that no amount of budgeting will help you to pay off your debts, you may want to consider filing for Chapter 7 bankruptcy. The following are some things you should consider before doing so.

Learn about the advantages and limitations of Chapter 7 bankruptcy

Chapter 7 bankruptcy is popular because it is completed very quickly and usually results in a complete discharge of all debts. However, it also liquidates a significant amount of your assets.

Learn whether you are eligible for Chapter 7 bankruptcy

Those filing for Chapter 7 bankruptcy must undergo a means test to determine whether they are eligible to file. If you have an income that is higher than what is considered to be average, you may not be eligible for Chapter 7 bankruptcy and will need to consider filing for Chapter 13 bankruptcy instead.

Taking action to file for bankruptcy could be the best decision that you ever make. By getting a fresh start from your debts, you will be relieved of a huge burden in your life.

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