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Sometimes when you can’t see above the “water line” of bills that pile up on a monthly basis, and you so not have enough money coming in to handle he needed money going out, bankruptcy credit counseling may be your last and best solution. Bankruptcy will stay on a consumer’s credit report anywhere from seven to 10 years and can keep you from opening many essential financial accounts. Although it may be your only choice, take the necessary steps available trying to avoid this legal scenario, follow these guideline if you are literally at your dollar’s end.
1. Know Your Debt
Get all your debt documents together in one place including any recurring monthly utility bills. Make sure the list is complete o you can determine exactly what dollar amount you do owe.
2. Match Income to Debt
Count all the dollars coming into the household against the ones needed to go back out. If the debt turns out to be in the hundreds of dollars beyond your monthly take-home income, you probably need to seek bankruptcy for financial and personal protection. Your inability to repay monthly installments will eventually prompt many creditors to take legal action against you that may be more costly than seeking the legal protection afforded through bankruptcy procedures.
3. Consolidation Loan
Obtaining a debt consolidation loan may be a good alternative to filing bankruptcy. If qualified, a debt consolidation loan company will contact all your creditors arranging a plan for repayment. You will make one monthly payment to the debt consolidation company that will manage your debt until it is repaid. These debt consolidation loans typically carry much lower interest rates than credit cards making this an attractive alternative.
4. Credit Counseling
Check into credit counseling before executing bankruptcy. Once filing bankruptcy, obtaining credit counseling will be directed by the court anyway. Doing so before filing will give you the opportunity to receive a professional assessment of your financial indebtedness with recommendations to address it. More often than not, professional credit counseling will reveal alternatives to filing bankruptcy.
5. Get an Attorney
Find a reputable bankruptcy attorney to advise you on the many legal ramifications faced following this route. A credit counselor can make a recommendation for you.
6. Liquidate
If possible, liquidate your assets to pay off your debts, If the value of your assets equal or surpass the amount of debt, liquidating assets to meet indebtedness will keep you from having a bankruptcy attached to your financial rating.
7. Make a Proposal
Often when creditors are informed a debtor is considering bankruptcy, deals may be made where either a percentage of debt is offered for repayment or interest reduced or waived making it more attractive to handle monthly payments. Sometimes the overall indebtedness can be reduced to a fraction of the original amount making it a better deal than filing bankruptcy.
8. Check Credentials
Make sure to check the credentials of any attorney you might consider to handle your bankruptcy procedures. Ask to see the attorney’s track record gaining favorable bankruptcy decisions.
Bankruptcy Credit Counseling: How To Get Back On Track
