BANKRUPTCY INFORMATION

What You Should Know About Bankruptcy
Nationally, nearly 249,000 credit union members filed for bankruptcy in 2002, according to numbers from the National Credit Union Administration. Those nearly 257,000 members cost credit unions an approximate $734 million in losses. Those losses require affected credit unions to charge more for loans and pay less on savings for other members. And money isn't bankruptcy's only casualty.

Bankruptcy's aftereffects can be long term and devastating. It mars a debtor's credit record. It causes the debtor loss of property and the right to some financial services. But that's not all. Some people who filed bankruptcy now can’t get a mortgage and are stuck paying rent for an apartment. Others have trouble finding jobs because some employers run credit reports on prospective applicants.

One of the biggest things most people going through bankruptcy fail to realize is that, with the help of their credit union, they may have avoided bankruptcy.

The first step to better finances is to work with [NAME CREDIT UNION] and other creditors to pay off your debts, say advisers at the National Foundation for Credit Counseling (NFCC), a nonprofit organization serving more than 1,300 Consumer Credit Counseling Services nationwide that offer free or low-cost financial counseling and education.

NFCC suggests you call the credit manager, merchant, or lender and explain why you're having trouble keeping up with payments. A job loss, illness, or other family emergency can create temporary financial difficulties.

Most creditors will work with you because the alternatives (repossessions, foreclosures, and lawsuits) are expensive.

Your next step is to discuss future financial prospects with the credit union and work out a debt repayment plan. And remember to stay in contact with the credit union and other creditors until you resolve your financial problems.

Copyright 2003 Credit Union National Association, Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.