Is Filing Bankruptcy The Right Decision?
Facing financial hardships is not an easy task. Making the decision to file bankruptcy should not be made lightly or quickly.
Most likely if you are beginning to consider bankruptcy, you have tried your best to handle your debts on your own. You may have even tried a debt consolidation plan, or consumer credit counseling program to help you get out of debt. If so, the next step is to discuss your situation with a bankruptcy attorney and determine if bankruptcy is right for you.
A bankruptcy attorney can help you determine whether filing bankruptcy is right for your situation. They can evaluate your debts, income and vision for your future to see if bankruptcy will help you get through your financial problems and onto a path of financial freedom.
Here are a few questions to consider if you are thinking about filing bankruptcy:
Are Your Debts Dischargeable?
Not all debt will disappear in a bankruptcy case. Depending on your individual situation, and the types of debt you have, you may find that bankruptcy will provide you little of no relief. The best way to determine this is to speak to a bankruptcy lawyer or credit counselor who can help you review your debts to see if they qualify for discharge.
Do You Want To Keep Your Debt?
There are generally two types of debt. A "secured debt" is one that is secured by collateral. This describes mortgages, car loans and some loans where property is offered up in case you should default on the loan.
Then there is "unsecured debt," which includes most credit card debts, medical bills, legal fees, and utility bills. Some unsecured debt, such as back taxes, child support, and student loans are not eligible for bankruptcy protection.
Most secured debts are not discharged in bankruptcy unless you surrender the collateral. If you want to keep your home, or your car, you may want to reaffirm the debt and keep it out of the bankruptcy filing. Otherwise you would be asked to surrender it to your creditor.
What Will Happen If You Have More Financial Problems?
If your financial problems were not caused by an unexpected or catastrophic event, you will have to seriously change your lifestyle for bankruptcy to help you. Filing bankruptcy is not a way to clear your debt so that you can keep borrowing to pay for your lifestyle.
In order to survive a bankruptcy filing and move forward you will have to evaluate how you pay for everything in your life. You will be asked to set a budget that will determine what you are paying for that is a necessity and what is a luxury.
We are not here to lecture you about your choices. But you have to understand that filing bankruptcy is a step that also requires sacrifice. If you face additional financial problems after you file, you may have to scrimp and save to dig your way out.
What Will Happen At Work?
Employers often review credit reports before hiring or giving promotions. While it is unlawful to discriminate against someone who has filed bankruptcy in most cases, bankruptcy may raise questions about an employee's financial judgment, or even make an employer concerned about theft or embezzlement. It may mean you will have to have a serious and frank discussion with your employer or potential employer about your bankruptcy case.
Filing bankruptcy is a difficult decision, and one that will affect your life in good ways and bad for at least 10 years. Start by getting advice from a bankruptcy attorney near. They can help you plan for your future and start you on a path to becoming debt free.
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