A guest post from Steven over at PayingPaul.com
The current economic times combined with unmanageable debt loads have resulted in more bankruptcy filings than ever before, but too many consumers make a hasty decision without truly considering the negative effects of such a drastic action. Before making a major mistake, an individual needs to realize that there are several important reasons to avoid filing bankruptcy.

It is difficult enough to remain competitive in today’s job market, but an applicant with a bankruptcy in their past is often seen as fiscally irresponsible and may be passed up for a position. An ever increasing number of employers are pulling credit reports on all of their prospective new hires, so individuals need to be very careful when managing financial situations that could affect their future.

Few consumers realize that they may not even qualify to file bankruptcy due to the outcome of a means test that determines the ability or inability to pay a portion of debts. A payment plan will be required meaning that the debt will still exist, but the irreparable damage will also still exist on the consumer’s credit report. A bankruptcy filing is going to remain in an individual’s credit file for up to ten years, and that is an incredibly long time to suffer from a bad financial rating.

Some individuals try and justify the ten years that a Chapter 7 bankruptcy will be present on their credit report, but it is important to understand that a filing will follow a person for life. Any applications for loans or employment that ask financial questions typically ask if the applicant has ever filed bankruptcy. While it may be tempting to simply state no and assume that the credit report will not prove otherwise, there are certainly ways for employers or lenders to discover the truth. Nobody wants to be charged with fraudulently filling out a legal document or form.

Nobody wants to live paycheck to paycheck and suffer from a huge amount of debt, but the stress and anxiety that can arise during a bankruptcy is often considered to be far tougher to deal with. While it may be true that an individual desperately needs financial assistance, the simple fact of the matter is that there are plenty of bankruptcy alternatives that must be considered first. If consumers really understood the total and lasting impact of bankruptcies, there would certainly be far fewer filings and less individuals that harm their financial future needlessly.