At CCCS, we see people at their worst on a regular basis. They come to us because they have gotten themselves so deeply into debt, that they don't feel like an end to their problems is possible. No matter how hard they work at making their payments, there seems to be no light at the end of the tunnel. Many of these people tell us that they have considered bankruptcy as a last resort. Unfortunately, a lot of people don't understand the realities of declaring bankruptcy. They see it as a way to make their debts magically disappear, and feel that any consequences they may experience will certainly be more bearable than the burden of their debt. It's important to understand, however, that you pay a heavy price for what essentially amounts to breaking a promise. Put yourself in the creditors' position for a second. You make your living by lending people money and having it repaid with interest. One day, someone comes along and asks to borrow money from you, but you discover that others who have lent them money have never gotten it back. Would you lend money to this person? The price you pay for bankruptcy is ten years of having it on your credit report. That means that for ten years, you will be severely restricted in applying for credit, either by being denied or by paying extremely high interest rates. Also you aren't always relieved of all your debts. Some obligations - like federal taxes, student loans, child support, and alimony - aren't discharged even if you declare bankruptcy. Having a bankruptcy on your record is a stigma that stays on the public record for 20 years in some states, even though it is removed from your credit record after 10 years. Many people who have declared bankruptcy report that, in addition to all the negative results mentioned above, they also have to deal with feelings of personal failure, and a severe blow to their self-esteem. I'm not saying that no one should ever declare bankruptcy. There are cases where people get so deeply into debt that there is just no mathematical way to resolve the situation. However, most of the people I've seen who are considering it do not fall into that category. Cost of Bankruptcy Along with the mentioned credit report damage, bankruptcy carries a filing fee of $299.00 for a Chapter 7 and $274.00 for a Chapter 13. Keep in mind this does not include Attorney fees. Chapter 13 Allows you, if you have a regular income and limited debt, to keep property such as a mortgaged house or car, that you might otherwise lose. In Ch 13 the court approves a repayment plan that allows you to pay off a default during a period of three to five years, rather than surrendering your property. Chapter 7 Known as straight bankruptcy, involves liquidating all assets that are not exempt. Exempt property may include cars, work-related tools, and basic household furnishings, You can receive a discharge of debts under Ch 7 only once every seven years.