If you are struggling with your debts or you are about to face foreclosure, you could consider declaring bankruptcy. Please note, that being bankrupt can have some serious consequences. This is why you need to make sure you explore all of your options first.
Before You File For Bankruptcy
Bankruptcy should ideally be your last resort. If there is no way for you to pay your bills, then it is worth considering. However, before you do so, you might want to consider the different alternatives that are out there. Some of these alternatives can be less costly and they’re also less likely to damage your credit record quite so badly.
Try to find out if any of your creditors are happy to negotiate with you. Any bankruptcy lawyer will tell you that it’s always worth asking. Sometimes a creditor will accept a reduced payment rather than no payment at all.
– Difficulties with your mortgage
If you are having difficulty paying your mortgage, please get in touch with your loan provider. They might have a few options available to you. Some lenders offer you the chance to postpone your payments for a while. This is known as “forbearance”. You could also be offered a repayment plan or a modified loan. These are all options that are worth considering. If there is a real opportunity for you to keep your home, please seriously consider it.
– Paying the Internal Revenue Service
Did you know that the Internal Revenue Service is occasionally happy to negotiate? There’s always a chance that the IRS will accept lower payments or offer you a payment plan. This means you can potentially pay what you owe over a longer period of time. The sooner you get in touch with the IRS, the sooner you know where you stand.
How to File for Bankruptcy
If your only option is to file for bankruptcy, please make sure you speak to a lawyer. You don’t always have to get legal help, but things are more likely to work in your favor if you do. Having a professional to help you navigate the complicated world of bankruptcy can make the process so much easier.
– Types of bankruptcy
- Chapter 7 – Your assets will be liquidated so that your creditors can be paid. Some items are exempt, such as tools you need for your job, clothes, personal items, your car, pensions, and social security.
- Chapter 13 – You can keep your assets but you will need to pay your debts over a 3-5 year period. A trustee collects the payments and distributes them among your creditors. This is the ideal option for those who wish to avoid foreclosure.
If there is a chance that you might not have to declare bankruptcy, it’s worth considering. This is because being bankrupt can have a huge impact on your credit record. If there is no other option available to you, please hire a lawyer to help you. They can potentially minimize costs and the impact that filing for bankruptcy has on you.
