Many people are in debt these days. They are bothered by collection agencies and creditors and their bills are not being paid down. If this sounds like you and your situation, filing for bankruptcy may be a good idea for you. Read on to learn if bankruptcy is the best decision for you.
Be certain you are making the right choice before you file for bankruptcy. Look into other options, such as consumer credit counseling. Bankruptcy will be on your credit report and affect your credit score for many years to come, so it is a decision that should not be taken lightly. Try to use it as a last resort.
Ask for a free consultation with your bankruptcy attorney and ask questions about experience and education. Most attorneys offer free consultations, so meet with a number of them before you retain one. Don’t choose a lawyer until your questions about bankruptcy are sufficiently answered. You don’t need to decide what to do right away. This will give you extra time to interview several attorneys.
If you’re unsure, then you need to learn what a Chapter 7 bankruptcy can do for you, as opposed to what Chapter 13 does. Investigate the benefits and pitfalls of both. Online resources may be able to provide all the information you need. If anything you see is unclear or doesn’t make sense, go over it again with your attorney before making the final filing decision.
Be sure that bankruptcy really is your best option. Some people have great luck with handling debt with debt consolidation, which means taking out only one loan to pay off many loans. Going through the bankruptcy process is a long drawn process which at times can be incredibly stressful. Having a bankruptcy on your record will hinder your ability to get credit in the future. Needless to say, if some alternative strategy will allow you to take care of your debts, you should give it a try before resorting to bankruptcy.
Do not let bankruptcy consume you, make sure you make time for your friends and family. Going through bankruptcy is a lot of stress. It is long, full of stress and leaves individuals having feelings of shame and guilt. A lot of people hide away until the entire proceedings have been played out. This is not a good idea because staying alone could cause serious problems with depression. Thus, you must keep living your life and socializing with those you love, no matter what is going on with your bankruptcy.
If your earnings are higher than your expenses then filing for bankruptcy is a waste of time and money. Bankruptcy may appear like the easier way to avoid paying your old bills, but it is a huge mark on your credit score and remains there for up to 10 years.
Think about all your options before pulling the trigger. There are many recouses available to help you lower your payments and get back on track. If a foreclosure is on your horizon, look into loan modification plans. Your particular loan holders can provide a lot of assistance if you’re just willing to speak with them. You can negotiate lower rates, longer terms, and other means of repayment that may keep you from having to file a claim. Creditors want to recoup the most money possible from debtors, and they can often get more through debt repayment plans than bankruptcy procedures.
Carefully consider filing for bankruptcy on loans that have a co-signer, especially if that co-signer is a business associate, close friend or relative. When filing Chapter 7, you are not legally responsible for the debts in your name. But, bear in mind, the debt now becomes the sole responsibility of your co-debtor.
When filing for personal bankruptcy you should always be aware of your rights. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. There are a few debts that cannot be cleared, such as student loans and child support, but be sure to know the details when dealing with debt collectors. If your creditors are telling you any other kind of debts cannot be cancelled, get a written proof and send it to the general office of your state’s attorney to report this illegal behavior.
Hopefully, you now understand that there are many options open to you when you are giving a personal bankruptcy filing serious thought. Don’t let the situation overwhelm you. Look at bankruptcy as a way to begin again.