Why you should not feel ashamed or nervous about filing for bankruptcy.

Some debtors feel ashamed to file bankruptcy thinking that they have failed to fulfill their financial obligations. Many debtors might feel depressed while filing bankruptcy. Creditors have also played a major rolein making the people feel ashamed to file bankruptcy. They advocate old fashioned notions that it is a terrible thing to file bankruptcy. However, when the debtors try tonegotiatea repayment plan with them, most of the creditors are not interested to work out a solution. They keep increasing the interest rates and expect people to pay them by any means.

Many people rely on their credit cards and lines of credit for when times get tough and they need funds to cover unfortunate and unexpected events in their lives, such as unemployment or health issues.  However, in recent years, the big banks have been accused of preying on consumers in distress by charging astronomically high interest rates (20-30% range or higher) when a consumer misses as single payment.

This is true even when banks are able to borrow at record low interest rates from the federal government. The cold and harsh reality is that, at such high interest rates, the consumer may never be able to pay off that debt and bankruptcy is the only practical solution for a fresh start.  Many more people in California are experiencing this problem as unemployment remains so high throughout the State.

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