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When facing bills that you cannot pay and mounting debt, you generally have two options: You can seek out debt relief or file bankruptcy in New Jersey. Both options have good and bad points that you should educate yourself on before making your final decision. Either way, you need to make a move before your finances create even more significant issues for you.

Letting your debt go without trying to resolve the issue can end with garnishments and foreclosure, both of which you want to avoid at all costs. It is much better to face your financial troubles head-on and get them under control now. Here is a look at your options.

Debt relief

The Federal Trade Commission warns that many companies offering debt relief and promising to wipe out your debt or reduce payments to a fraction of what you pay now are scams. They often provide services that end with pushing you to file bankruptcy, but they charge you for that suggestion. The fees you pay are a waste of money that could have gone toward paying down your debt.

A better debt relief option is a credit counseling service. These services will help you learn about better money management and develop a budget for you to help you pay down your debt. You can find non-profit organizations that only charge a small fee or help you for free.

Bankruptcy

Filing bankruptcy is generally seen as the last resort because it is a legal process, and you may lose some assets that the court takes to pay back your debts. However, it often is your best choice because it can give you true freedom from your debts. The court removes all liability you have, allowing you to start fresh. As soon as you file for bankruptcy, it stops all collections and other debt collector efforts.

Whether you choose to file bankruptcy or go through a debt relief program, you need to make a move sooner rather than later. Your debt will only keep adding up and causing you further financial troubles.