Tips on making a careful decision

The National Association of Consumer Bankruptcy Attorneys suggests a few steps to determine whether bankruptcy will help.

• Know the benefits of discharging most debts and gaining protection from creditors along with the pitfalls, such as the possibility of losing property.

• Find out if your debt is taken care of by bankruptcy. (Personal bankruptcy usually does not erase taxes less than three years old, fines, alimony and child support and most student loans.)

• Do a budget analysis to calculate expenses and income.

• For some, who fell behind because of a job loss or disability, filing bankruptcy may provide real mental relief from the pressure and burden of the debt and debt collectors. The NACBA reports in other cases, where a person has just a few debts and strong defenses against them, the best option may come from an out-of-court settlement.

• The Federal Trade Commission cautions consumers to choose a credit counseling organization wisely and make a decision to enroll in a debt management plan only after careful consideration. The FTC offers consumers advice on dealing with debt through realistic budgeting, credit counseling from a reputable organization, debt consolidation or bankruptcy or debt negotiation.

• For more advice and detailed differences on bankruptcy and debt relief options, go to the Federal Trade Commission's Web site at www.ftc.gov or the NACBA at www.nacba.org.

• To check your own credit report for free, go to www.annualcreditreport.com or call (877) 322-8228. Consumers may order one free annual report every 12 months from each of the three nationwide consumer reporting companies.