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Home > Blog > Credit Bloopers > Should You Declare Bankruptcy to Get Out of Credit Card Debt?

Should You Declare Bankruptcy to Get Out of Credit Card Debt?

Posted by: Sally S. | Jan 05,2008

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Deciding whether you should declare bankruptcy to get out of credit card debt is a hard decision to make.

If you declare bankruptcy to get rid of your credit card debt, remember, you will no longer have your credit cards at your disposal. You may also have to get rid of some of your larger luxury items.

A bankruptcy stays on your credit report for several years (up to 10 years), which can make starting over really difficult. On the other hand, if you’re defaulting on money that you owe your creditors, you won’t be able to get new credit cards or a loan anyway.

You won’t be able to get rid of all of your debts when you declare bankruptcy. Student loans won’t go away, and neither will federal taxes owed for the last few years. You will still be responsible for these debts.

You won’t be able to get a mortgage or new credit cards when you file for bankruptcy. But you probably won’t have to give up your current home if you are a homeowner. And most people I know who declare bankruptcy don’t want to get credit cards again, anyway.

Consider getting a debt consolidation loan before you settle on declaring bankruptcy. The Debt Wizard at LowerMyBills.com can help you decide how much you need to pay off your credit card debt.