Numerous people, continue to feel an oppressive impact from the economic downturn. In result, a record-breaking number of people have fallen victim to company budget cuts and layoffs. An additional surge of high-profile bankruptcies plague headlines and make it impossible for people to ignore the present economic crisis.
Increasingly, people consider bankruptcy as an option. Although the right options for some, others may jump onto the bandwagon too quickly. Bankruptcy does effect your credit score and stays on your credit report for up to ten years. There are some steps to take before deciding to file for bankruptcy.
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1. Determine Financial Status. Thoroughly assess your positive income in comparison to tax obligations and debts. Further review how much equity you have in personal assets.
2. Prioritize Bills. Evaluate all of your bills and determine, which can wait or require immediate payment. If all of your income is consumed by bills require immediate payment, bankruptcy may be the right option for you.
3. Contact Creditors. Anytime you are running late or are unable to pay your bills, contact creditors. Attempt to work out some type of arrangement with creditors that will work for you financially. Keep in mind, how the poor economy has made creditors more willing to lower or postpone payments opposed to receiving nothing.
4. Consider Credit Counseling. Federal law requires credit counseling for those claiming bankruptcy, but should be a consideration prior to that stage. Credit counseling agents help you to establish a budget. In addition, they help you to make a payment plan aimed to help you avoid bankruptcy.
Always keep in mind that there are many bogus agencies out there. Most states provide a list of accredited and legitimate agencies. The last thing you want is someone taking advantage of you when you are vulnerable. Don't fall prey to stories filled with lies on how they can erase stuff off your credit report, or anything else that seems too good to be true.
5. Assessment of the Situation. Ultimately, bankruptcy should always be the last resort. Always exhaust all other options before filing. Do not file bankruptcy if you do not think your unemployment will last over the long-term. On the other hand, if you have been unemployed for a long time then bankruptcy may be the right option for you.
Always consider the long-term consequences of any choice. Therefore, you should ever jump into a decision but rather should ensure the pros outweigh the cons and no other option offer more advantages. Eligibility and options differ for each bankruptcy code and are Chapter 7, Chapter 11, and Chapter 13. In brief, Chapter 7 discharges a person or businesses debts under the liquidation bankruptcy code. Chapter 11 is geared towards businesses and corporations, allowing them to remain in business and avoid liquidation. Instead, they can adjust or reduce their debts.
On the other hand, Chapter 13 gives individuals and in some cases sole proprietors the option to avoid liquidation for adjustment or reducing their debts. In general, the process involved with filing bankruptcy is arduous and complicated. Therefore, most choose to hire a lawyer rather than self-represent. Generally, a good bankruptcy lawyer costs a couple thousand dollars. Ultimately, if bankruptcy seems like the only option it is not the end of the world. Subsequent to your bankruptcy, you will have the option to start rebuilding your credit.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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