Advertisements Promising Debt Relief
May Be Offering Bankruptcy

Washington, D.C. - Debt got you down? You're not alone. Consumer debt is at an all time high.

What's more, record numbers of consumers - more than 1.5 million in 2004 - are filing for bankruptcy. Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming.

In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes. While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y.

The reason: its long-term negative impact on your creditworthiness. Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live.

• Talk with your creditors. They may be willing to work out a modified payment plan.
• Contact a credit counseling service. These organizations work with you and your creditors to develop debt repayment plans. Payday Loans
• Such plans require you to deposit money each month with the credit counseling service. The service then pays your creditors. Some nonprofit organizations charge little or nothing for their services.
• Carefully consider a second mortgage or home equity line of credit. While these loans may allow you to consolidate your debt, they also require your home as collateral.

Only time, a conscious effort, and a personal debt repayment plan will improve your credit report and get you out of debt.