How To Decide If You Need Bankruptcy Assistance
When you are in debt you can’t think of anything else. It overshadows every other area of your life apart from maybe very bad health which tends to put everything into perspective. The stress which accompanies mounting debts can quickly overwhelm you which is why it is vital to tackle it as soon as possible. It is no good burying your head in the sand and hoping the problem will go away. The only way forward is to face up to what you owe down to the last single cent and then formulate a plan to deal with it.
Filing bankruptcy is a life changing decision which will have repercussions for a very long time. It should be regarded as a last resort option and not as an easy get out clause. It can and will affect your credit rating for many years which will in turn affect your reputation and ability to secure financial assistance in the future. All other avenues should be explored first before declaring yourself bankrupt.
Therefore, before seeking bankruptcy assistance you need to work out exactly how much you owe and to whom, these people or companies are referred to as the creditors, and list it all down in order of amount beginning with the largest amounts down to the smallest or in date order. Organise all your financial paperwork in one folder or file so that everything is immediately to hand. Even though you may not feel like facing it, doing this can begin the process of conquering your debts instead of running away from them.
Realistically examine the total amount of what you owe and determine the likelihood of you being able to pay it back in a reasonable amount of time. If you owe thousands of dollars and have a good job then you may be able to write to those you owe money to and propose a payment schedule whereby you pay small amounts each month until the debt is paid off. You would be surprised at how many times this will be accepted. People and companies, even big companies, would much rather know that you are willing and trying to pay and will be prepared to be patient as long as there is some money being paid off each month. Once this has been agreed, however, you must stick to it and make sure that you cut back on any unnecessary spending to be sure that you can reliably meet the payments and stick to the payment schedule.
If, on the other hand, you owe hundreds of thousands of dollars and do not earn a good wage or have no job at all then clearly you will not be able to offer much in the way of a payment schedule or be able to stick to it. In these circumstances, consider if there is a family member or friend who can afford to lend you the money to pay off all the debts and then you pay them back monthly which has the advantage of consolidating all your debts into one which makes it simpler to monitor and budget for.
If all this seems too much for you to deal with, consider credit counseling. If you do decide to file bankruptcy then you will need to get some credit counseling anyway and it can help you to analyze your financial situation and suggest alternatives to filing bankruptcy.
Speaking to experts is almost always beneficial in that they may make suggestions which you hadn’t thought of or considered. A bankruptcy attorney can quickly assess your situation and many offer a free initial consultation. They can also explain to you the different ways to file bankruptcy such as Chapter 7 or 13. Chapter 7 will mean your assets are liquidated to pay off your debts while Chapter 13 allows you to keep your assets while paying off your creditors under the watchful eye of a court trustee and according to a supervised payment schedule.
It is worth taking the time to go to the library and look up the various types of bankruptcy or do research on the internet as to the options available to you. In this way you will be able to make an informed decision and not give in to panic. There is always a way out from your troubles but you will need to be disciplined and ensure that you carefully monitor any spending from now on until you are back in the black.
If you have valuable assets such as a car or house or other belongings that you can sell and they will cover a large proportion or all of your outstanding debts then consider selling them and paying off your creditors which may leave you with nothing but at least you will not have any debts hanging over your head or the stain of bankruptcy on your credit history. You can then make a fresh start with the experience behind you to prevent you from falling in the same hole twice.