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How to Tell If You Are Ready to File for Bankruptcy

Published on May 25th, 2019

Bankruptcy Lawyer

For most people, the road to bankruptcy is very long and tortured. It may have started with credit card debt from your carefree college days. It may have started with a serious and unexpected medical crisis that drained your savings and maxed out your credit cards. It may have started with car trouble. It may have started with a family member who needed your help. No matter where, when, or how your financial difficulty started, here you are, unable to pay your bills with bill collectors sending you constant messages, with lawsuits being filed against you, wages being garnished, and stress rising. What happens if you have an unexpected expense?

If you identify with this sense of dread and panic, you are probably already considering filing for bankruptcy. It is important to think carefully through this decision, however, because it is one that can affect you for the rest of your life financially. The very best way to determine whether filing for bankruptcy is right for you is to contact a qualified bankruptcy attorney and set up a consultation to discuss your specific situation.

While you are waiting to meet with your attorney, here are a few questions you can ask yourself to prepare:

  • Have I tried to work out payment plans with my creditors? Sometimes creditors will be willing to negotiate a payment plan with you so that you can avoid accruing interest on your debts and so that they can avoid the legal fees associated with trying to collect your debt. Remember, it is very likely that avoiding bankruptcy is also in the best interest of your creditors because they may not get paid the full amount owed to them in the event of your bankruptcy.
  • Have I seriously considered debt consolidation? Debt consolidation can be scary and is not a decision that should be made lightly. However, sometimes consolidating your debt into one lump sum, which essentially involves taking out another loan, is preferable to filing bankruptcy. Depending on your situation, debt consolidation can allow you to preserve your credit rating and keep your assets when bankruptcy would not allow you to do so.
  • Have I prepared myself for a future in which I have declared bankruptcy? Have you come to terms with possibly having to sell may of your assets, including your house? Have you considered where you will live if you can no longer get a loan for a house or qualify for certain housing based on your post-bankruptcy credit score? These are big scary questions, but it is important to think them through before filing for bankruptcy. In dark times, it can be easy to see bankruptcy as a shining beacon of hope, but it comes at a cost that you must be willing to pay.

After you have considered these questions and your answers, you are more than ready to talk to an experienced bankruptcy lawyer about whether filing for bankruptcy is right for you.

 


 

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