30 Seconds to Know

Buried in debt? Before filing for bankruptcy, make sure you know these facts

Filing for bankruptcy may seem like a simple solution to putting a stop to creditors' calls and tackling that mountain of debt. But in reality, it's not a get-out-of-jail-free card — and comes with a number of restrictions and consequences.

Closed Captioning
apply | reset x
font
size
T
T
T
T
color

Bankruptcy protection won't get you out of paying these bills

Play Video - 0:36

Bankruptcy protection won't get you out of paying these bills

Play Video - 0:36

RELATED: When you can tap into your 401(k) early ?— without a penalty!

TODAY financial editor Jean Chatzky shared some key facts that everyone should consider before declaring bankruptcy:

  • That black mark on your credit can remain for 10 years.
  • It may prevent you from getting additional credit for several years.
  • Filing for bankruptcy isn't free — there is a $300 filing fee.
  • Potential landlords and employers may view the situation unfavorably.

RELATED: Suze Orman answers 22 questions on student loans, investing and retirement

Additionally, bankruptcy protection can’t help in every situation. Here are the bills you can’t get out of paying:

  • Student loans
  • Tax debts
  • Liens
  • Child support
  • Alimony

The bottom line? Make sure to explore all options for repaying your debts; bankruptcy protection should be your last resort.

0:00
 
0:00
Your video begins in
0:00
TOP