Contemplating bankruptcy and actually taking the steps to file are two very different things. Most people consult with a lawyer before taking the leap into bankruptcy, but there are a few questions you can ask yourself before contacting a bankruptcy expert that will help you determine whether filing is your best option.
Bankruptcy is a process and a commitment. Some people assume bankruptcy is just declared and debts go away. This is far from the truth. In many cases, a filer must pay back debts listed in the bankruptcy. He or she sacrifices assets and the ability to borrow money for several years into the future. Bankruptcy may the best option for many people facing financial difficulties, but serious consideration must first be given to each and every situation.
Are you considering bankruptcy? Consider the following:
Have You Tried to Work with Creditors?
Explaining your financial situation and negotiating a new payment arrangement can help you get things under control. Creditors would rather provide a payment plan or settle a debt than have the money they are owed discharged in bankruptcy because in that case they risk getting no repayment at all.
If creditors are unwilling to negotiate, you might have luck with a credit counseling agency. They act as a neutral third party that arranges lower interest rates and monthly payments on behalf of borrowers. In most cases, you will be required to get credit counseling prior to filing for bankruptcy, so it won’t hurt to get the ball rolling. Keep in mind there are debt consolidation scams similar to legitimate credit counseling, so do your research and ask a bankruptcy attorney for a referral to credit counseling if you are concerned.
Is Your Paycheck Affected by Wage Garnishment?
If creditors have received judgments against you that have led to wage garnishment and you are having trouble making ends meet, bankruptcy can help. It stops wage garnishment and could ultimately result in your pocketing more of your take-home pay, while still addressing your debts.
Are Your Debts the Result of Medical Bills?
Statistics show medical bills are the cause of half of all bankruptcies. Bankruptcy can discharge medical bills or provide a three to five year repayment plan for a portion of the debt. If you are faced with astronomical medical bills you have no chance of ever repaying, bankruptcy can offer a solution.
Do You Own Anything of Value?
If you do not own a home or other valuable assets, bankruptcy can help you with minimal impact. The same is true if your assets are worth less than the debt you owe. Bankruptcy can also help to protect your assets from creditors, so it is important to speak with a bankruptcy attorney about your specific circumstances.
Do You Have Money in Savings?
If you have money in savings that can help repay your debt, most financial experts recommend using it to repair your financial situation. However, if you have no savings or you are draining your retirement savings to pay your debts bit by bit, bankruptcy might be a better option.
Still think bankruptcy is right for you? We can help. Contact the Law Offices of Robert M. Geller at 813.254.5696 to schedule your consultation.