Recognizing When It’s Time to Consider Bankruptcy

If you have significant debts that are becoming increasingly unmanageable, you may want to file for bankruptcy. Though a bankruptcy attorney will first direct you to enroll in credit counseling, bankruptcy may offer the best solution for reestablishing a solid financial foundation. When considering your choices, use the following guidelines to determine whether declaring bankruptcy is the best option for you.

• Analyze your budget. Though you may have gone through your expenses before, it never hurts to analyze it again. See if you have any debt areas that can be reduced or eliminated. Do you need cable television? Can you trade in your current car for one with lower monthly rates? If at all possible, bankruptcy lawyers advise that you lower your outgoing costs.
• Prioritize your bills. Though debt collectors can be persuasive or even aggressive in their attempts to redeem your debts, credit card payments should be put on hold until you make your monthly home mortgage and car loan payments. Receiving a harassing creditor call is irritating, but it doesn’t compare to losing your house or your car.
• Try other options. Can your family or friends offer any financial assistance? Can your lenders alter your interest rates or payment amounts? Bankruptcy attorneys recommend that you exhaust all of your other alternatives before filing for bankruptcy.
• Avoid false help claims. Although you should do your due diligence to manage debt before declaring bankruptcy, beware of scams that promise to quickly reduce your debt by as much as half. Typically, these entities require a substantial up-front fee but do little to help customers. In the end, all you will receive is more debt that you cannot repay.
• Get professional assistance. If you remain in the grasp of uncontrollable debt, contact a reputable bankruptcy attorney to help you. Bankruptcy lawyers can walk you through the process of declaring bankruptcy and ensure that you will be back on the road to financial solvency as soon as possible.