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

Filing for bankruptcy may seem like a simple solution to tackling your debt and putting a stop to creditors' calls, but it's not a get-out-of-jail-free card.
/ Source: TODAY

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.

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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.

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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.