Although financial in solvency has come to be considered a financial tool and declaring bankruptcy seems a risk-free temporary solution as one in every five Americans declare bankruptcy, you must be warned that there are important drawbacks to be weighed.

Chapter 13 Bankruptcy stays on credit reports for up to 7 years. Chapter 7 Bankruptcy stays on credit reports for up to 10 years. Regardless of your admirable deeds during these periods, bankruptcy label shall not be removed earlier, as established by the Fair Credit Reporting Act. Think twice before declaring bankruptcy and try to manage a more inspired balance between your expenses and your income.