You could bring up the subject of bankruptcy when you negotiate with a debt collector. For example, if you told a collector that your financial situation is so bad that you are considering bankruptcy, you may gain additional leverage to bring down his demand to an amount you can afford to pay.

If your financial situation is dire and you cannot afford to pay even the discounted amount that your pricing research and negotiating skills can secure, bankruptcy may be your best option, especially if your assets are worth less than you owe. Bankruptcy could be a logical step to protect you and your family . The stigma attached to bankruptcy is misplaced as circumstances happen that can put even the best and most honorable people under the gun. Medical debt is one of the leading causes of bankruptcy in this country.

Filing for bankruptcy can cost as much as $1,000 , but you can avoid much if not all of the expense by using a nonprofit organization called Upsolve (www.Upsolve.org) . Upsolve is a free bankruptcy filing tool for people who qualify based on their income and circumstances. Its service is like TurboTax for bankruptcy.Upsolve is geared for people who have the simplest Chapter 7 bankruptcy cases and who do not own a home or make above the median income in their state. It also has a listing service to connect anyone who is considering bankruptcy with an experienced attorney for a free consultation. The nonprofit organization’s revenue comes from donations and fees paid by attorneys who participate in the listing service.

A bankruptcy can show up on your credit report for as long as seven years, but if you already have alow credit score the impact of bankruptcy on your credit rating will be minimal compared to its benefits. Bankruptcy clears out all the debt you declare in your filing and gives you a fresh start which will enable you to improve your credit rating over time.