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If you are in a situation where your income does not cover your total expenses including loan and credit card payments, then you could well be on your way to personal bankruptcy. To avoid personal bankruptcy you need to question yourself about your position and take control of income and expenses. Do not make the mistake of ignoring the situation and hoping that it will go away - it won't.
The Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from
a government-approved organization within 180 days before they file. They also must complete a debtor education course to have their debts discharged.
The Department of Justice’s U.S. Trustee Program approves organizations to provide the mandatory credit counseling and debtor education. Only the counselors and educators that appear on the U.S. Trustee Program’s lists can advertise that they are, indeed, approved to provide the required counseling and debtor education. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers
There are various consultants and organizations that can help you assess your financial position and suggest plans to make payments more manageable; these are called debt settlement plans. Some specialists will even negotiate on your behalf for more favorable payment terms such as a smaller monthly payment or payment over a longer length of time. By declaring personal bankruptcy, your creditors risk never getting their money back and you will have a very poor credit rating. Clearly it is within everybody's interest to ensure that you can pay the full amount.