Should I File Bankruptcy? How can I Avoid Bankruptcy? How does Bankruptcy affect Your Life? What is Debt Consolidation? What is Credit Counseling?

Should I File Bankruptcy?

When you find yourself swimming in a sea of debt, barely holding your head above the water, the possibility of ever reaching dry land may seem bleak. Bankruptcy is a type of life raft that will help get you out of debt and create a fresh start toward debt free living. While bankruptcy is in place to allow a debtor to resolve his or her debts to creditors, it is not always the best option. When your finances are overextended and you don’t see a way out of the debt you’ve incurred, it is important to determine whether or not you should file for bankruptcy.

Often times, bankruptcy is filed by people who are not financially prepared to deal with unexpected circumstances in life. It may be a divorce, an unexpected medical bill or unemployment that has made it difficult to get by. These situations are difficult enough to get through without the added stress of financial debt. While bankruptcy may seem like your only option, it is important to understand that you may be able to get out of debt without filing for bankruptcy. An experienced bankruptcy attorney should be able to help you understand what options of debt repayment are available to you and help you choose the best option for your circumstances.

To determine if you should file bankruptcy, you should first assess the true nature of your financial situation. While you may be going through a hard time, it is important to determine if your circumstances warrant filing for bankruptcy. Ask yourself questions about how you use your credit card; if you are only able to make the minimum payment each month, use your card to pay for everyday expenses because you do not have cash, or continually make late payments, you may want to consider consulting a bankruptcy attorney to discuss your options.

After looking at how you use your credit cards, it is important to understand where your money is going. To get an idea of how you are spending your money, keep track of every penny you spend for a month. This will help you determine how you are using your money. After a month, you should go over your spending report and determine how much money is being spent on wants and how much money is being spent on needs. Reducing the amount of money you spend on unnecessary pleasures in life may allow you pay off your creditors and get back on track with your finances. If, however, you discover that you are spending most of your money on necessary living expenses and have no money to spare to pay back your debts, bankruptcy may be an option to discuss with a bankruptcy attorney.

Once you understand your spending habits it is a good idea to develop a budget and stick to it. A budget should allow you to live comfortably while at the same time, afford you the ability to start paying off your debt. If you are still not able to make full payments on outstanding debt, it is important that you discuss your circumstances with your creditor. Keep the lines of communication open as many creditors offer payment programs that can help you pay off your debt.

Filing for bankruptcy is a very personal decision that is not easy to make. If you are not sure what to do about a stressful financial situation, it is usually a good idea to discuss your options with a bankruptcy attorney before you make any major decisions. A bankruptcy attorney should be able to advise you about alternatives to bankruptcy that may be better for you.