Financial stress is very overwhelming and can make you feel like you have nowhere left to turn. You may be unable to keep up with your bills and collectors won’t stop calling you, making you even more overwhelmed. Looking further into your future, you don’t see how these financial problems will be solved anytime soon.
Bankruptcy might seem like the most obvious choice for you but is a big decision and can only be made after you carefully consider your situation as a whole. If you do feel like you’re all out of options and filing for bankruptcy is your best bet, a bankruptcy attorney can assist you in deciding whether or not filing is the only way for you.
Evaluate Yourself and the Situation
- The first step to determining whether bankruptcy is right for you is to make sure you examine your own self. If you are feeling overwhelmed by your debt, are not sure of how much you owe on your credit cards, feel like your financial situation is out of control, and that it is unlikely your furniture situation will improve in the near future, then bankruptcy might be the best option for you.
Other signs that might point to bankruptcy are multiple calls by bill collectors, your home being in the process of foreclosure, creditors filing lawsuits against you or are taking legal measures to collect their debt. If you are overwhelmed with your financial situation and feel like there is truly no way out, then you should call a bankruptcy lawyer as soon as you can to determine whether or not filing for bankruptcy is in your best interest.
- Although filing for bankruptcy might feel like the only step, there are other alternatives to bankruptcy that may be worth pursuing. You can try to negotiate with your creditors, as most would prefer to work something out than go through bankruptcy processes. They may also be willing to enter into a payment plan, waive your late fees or interest charges, or may want to even work out some other kind of agreement.
- You may also be able to hire a credit counseling agency, which can work with you to reduce your debt. They may also bring up payment plans or any other agreements with your creditors on your behalf. Because they have expertise in this area, a credit counseling agency will save you a lot of time, effort, and money. If you choose not to take any action at all and you have no attachable assets, you may be referred to as “judgment proof,” which essentially means that your creditors cannot take any actual meaningful action against you in order to collect their debt. You can also just tell your bill collector to stop contacting you.
Many times, people just want to stop being harassed by their collection agencies. Under federal law, collectors are required to stop trying to contact you if you request that they do so. If they still try to pursue legal action, you at least tried all the alternatives you can think of before just filing for bankruptcy.
Before you do finally file for bankruptcy, you should be aware that this case will be a matter of public record. There is an extensive disclosure process where you must detail all your debts, sources of income, and your monthly expenses. You may also need to surrender assets as part of the bankruptcy process; this could include your home. Your bankruptcy will also be included on your credit report and may need to be disclosed in your future employment situations.