When debt is piling up, bankruptcy is often the first solution that comes to mind. However, it is important that you consider other options before filing for bankruptcy. For example, you should consider debt consolidating first to see if you can get back on track financially. If, and when, bankruptcy is your only option, here are four things that you should do.
1. Get Access to Your Free Credit Report
To ensure that you are familiar with all of the creditors that you owe money to, you need to gain access to your credit report. Once a year, you can obtain your credit report from all three main bureaus for free. The reason that you need to do this is because it will provide you with a clear picture of who you owe. Many people assume that because they have stopped receiving calls and letters from debt collectors that they no longer need to pay a debt. However, this is not necessarily true. If all creditors are not included on your bankruptcy filing, you could wind up still owning thousands of dollars in debt after the fact.
2. Go to Credit Counseling
Before you can file for bankruptcy, there are certain requirements that must be met. One of those is completing credit counseling with a certified counseling agency. The reason that this counseling is required is to hopefully deter you from having the same financial problems after the bankruptcy process is complete. The counseling will help you learn financial planning and budgeting that will essentially teach you how to manage your money better so that you can stay hopefully on track financially in the future.
3. Assess Your Finances
In order to file bankruptcy, you need to be familiar with not only your current debts, but also your current income and expenses. Gather your bank statements, pay stubs, credit card statements, etc. and have them ready for the next step…
4. Hire an Attorney
While it is possible to file for bankruptcy on your own, it is not recommended. The law is rather complex, and there is a good chance that you will have many questions surrounding the process, so it is easier to have a professional chapter 7 bankruptcy lawyer at your side. An attorney will be able to answer any questions that you may have, ensure that bankruptcy is the proper option for you, and make certain that you understand the benefits and consequences of filing for bankruptcy.