When one files for bankruptcy it should be done at the right time. A benefit of filing is that it can get you back on your feet financially. Prior to doing so, it’s important to consider that it has a major impact on your credit score. It stays on your credit report for seven to ten years, so making the decision should be something that isn’t taken lightly.
It’s essential to consider all possible alternatives.
Can you find a second or third job to help you settle your debts? Extra income can go a long way towards settling a debt.
Following a budget also helps. By making certain changes you are able to dedicate more funds towards settlement.
If you can negotiate with your lenders directly you should do this. Creditors would actually prefer that you communicate with them if you are facing trouble with paying back. This is so that they can structure a new plan.
Keep in mind that qualifying is a stringent process. For this reason, it may sometimes be beneficial to wait before declaring. This enables you to consider all alternatives that are available.
Consider selling your assets yourself first. Chances are better returns earning potential than when a creditor liquidates your assets.
You can also pay on small amounts of unsecured debt.
When does one file for bankruptcy?
- When you’re heavily reliant on credit cards
- When you’re paying one credit card off with another
- When your salary is going to be garnished
- When you’ve dipped into your retirement savings to pay your debts off
- When you still have some cash. Bankruptcy attorneys can be expensive to hire.
Before you file for bankruptcy, make sure that you do your research and consult with experienced professionals.