3 Things to Remember When Filing for Bankruptcy
Are you thinking about filing for Chapter 7 bankruptcy? Here are three things to remember.
1. Do not be ashamed that you have to consider it.
2. Unavoidable financial disaster happens to many.
3. Bankruptcy does not make you a horrible person
In fact, filing bankruptcy might make you a responsible person to some. It shows that you take accountability for your debts, but you acknowledge that you can no longer afford them. It is better to legally acknowledge your inability to pay than to try and avoid it all together. Neglecting your debt will only land you in prison.
However, before you file bankruptcy papers, other options may be available to you, and every year, people utilize these bankruptcy alternatives when they thought Chapter 7 bankruptcy was their only option.
When considering debt resolution alternatives, ask yourself if you have any of the following :
• Late payments (maybe on a car loan)
• Limited debt (debt only in credit cards, for instance)
• Income (employment with a decent income)
• Mortgage (a mortgage on which you are current)
If you have any of these, you may not have to file for total bankruptcy. You may feel as though you’re never going to be able to pay off that credit card bill, and all you can afford is to barely pay over the interest every month, but solutions are available.
The following are three options :
1. Mortgage Refinancing
For instance, if you have a mortgage in good standing and there is equity in your home, then you have a simple solution. Doing a mortgage refinance can pull out enough money to cover outstanding debt and eliminate any need to file bankruptcy.
2. Hiring an Attorney for Debt Management
You can hire an attorney like this bankruptcy attorney in Harrisburg PA for debt management. Debt management means that your attorney works directly with your creditors, and many times, it can lower your payments and reduce your debt. This can be a great solution, and remember, the creditors would rather get some money back than nothing at all because you filed for bankruptcy.
3. Chapter 13 Bankruptcy
Finally, debt consolidation through the use of Chapter 13 bankruptcy can be an alternative to total bankruptcy as well. In this form, your debts are consolidated, counted, and sorted into one monthly payment.
Chapter 13 eliminates some debt entirely with creditors’ agreement and combines others. It is really a last resort before going completely bankrupt with a Chapter 7 filing.
bankruptcy is not always the best option for debt relief.. it has some serious consequences as well for many years.