How to Plan Before You File for Bankruptcy

How to Plan Before You File for Bankruptcy

2019/02/25

If you have realized that you are knee deep into the debt and the phone calls of the creditors are hurting your dignity so often, that filing bankruptcy seems to be the only work around, you need to hold your horses here. Many of us have a perception that filing bankruptcy would liberate from every single penny you owe.

This is such a misleading concept that when you will come across the reality after filing bankruptcy, your situation would be similar to crying over the split milk. Hence, this article would walk you through to understand what bankruptcy is and by providing the alternations, it would allow you to decide whether going bankrupt is your only option.

Know the real picture of the bankruptcy

When you are at the juncture of filing bankruptcy, it is worth noting that bankruptcy and foreclosure are not the gateways to get out of debt completely. Student loans, child support, back taxes and spouse support are the ones which would be there even after bankruptcy.

Moreover, it will have an undesirable effect on your credit report with the demolished score up to extensive level for seven to ten years. As a result, your bankruptcy would not permit you to buy a home or car at the same time you won’t be able to rent them.

Chances are high that you will face security clearance at your work place before and/or after bankruptcy if you have not informed them well in advance along with the facts that how bankruptcy was your only measure for debt relief.

Rest assured that all retirement plans are not protected for a bankrupt. Thus, even if it depends upon the laws and orders related to each state, pension from the government, social security, IRAs might be the subject of knocking out from your financial state of affairs.

Bankruptcy and divorce are the terms that go hand in hand in drastic manner these days. At the time of bankruptcy procedure, you might not apprehend that this is not only your monetary decision but also social.

Needless to state now that once you are aware about the possible loopholes of bankruptcy filing, you would start searching for the substitutes of debt and bankruptcy.

And, here you go with proven alternatives of filing bankruptcy:

It is always better to have an idea about your debt level as well as the available methods to fight with the same. However, please make sure that you may follow either any one suitable tip described here or all of them to fulfill the motto.

Switch over to thrifty living

You will have to help with bankruptcy yourself right from your abode. Look around and make a list of home appliances that you do not use anymore. In fact, literally switch over to a frugal living.

Sell everything that is not the requirement but the luxury. You may take aid from the websites like eBay and garage sell with others to serve the purpose. Find a place that is good enough for temporary living and cash out all your valuable assets including house, car, jewelry, financial papers and so forth.

Rally round from the bankruptcy website and bankruptcy forum available online and learn to bank on your monthly budget and stick to it. There are immense of portals available to guide you how to lessen the electric bill, water bill and so on along with the ways to save money over all.

Practice work as worship

If you are working full time, make sure to ask for the over time to your employer. Finding out a second job or third job would hoard you from bankruptcy debt. The next destination is to count the family members and make sure whether everyone is contributing in the monthly expenses.

In case, your spouse is not working, facilitate them with a job to lend a hand. Any hobby or re creative activities may become a blessing in disguise to earn extra bucks in this tricky situation.

A friend in need is a friend indeed

It is very likely that you might have never asked for financial help especially to a friend or relative. However, imagine whether they would like to address a friend or nearer one as a bankrupt.

Even god helps those who help themselves and looking at the situation, there is no harm in asking for the help from dearer ones at this point. Nonetheless, ensure to narrate the plan about how you will be able to pay them back and with what period of time. It would be surely lesser embarrassed than bankruptcy questions asked in the bankruptcy court. Isn’t it?

Intention of declaring bankruptcy may work in your favor

It would be always better to lose some than the whole. And, your creditors are also not the exceptions to believe the same. Declaring the intention of bankruptcy is far better than declaring bankruptcy. Explain your circumstances and the consequences with the objective to lower down your monthly payment as per the ease of your pocket along with the reduction in the interest charges and process costs to your creditors. After all, they are professionals and if they know you as a genuine borrower, they may look into the matter in your favor to bring to a halt on a new bankruptcy amongst their debtors.

Lend a hand from debt consolidation

When you are finished with all the doable options on personal level, you may take help of the license practitioners for the advice on bankruptcy. The internet would direct you with the number of organizations about debt consolidation. They might offer you bankruptcy loans to pay off all your existing debt and make it feasible to get back with single monthly payment.

Going few extra miles would provide you all the information on bankruptcy by which you will be surprised to know that there is a different solution for each bankruptcy such as credit card bankruptcy, corporate bankruptcy, medical bankruptcy and bankruptcy personal to name a few.

Consult bankruptcy attorney before hand

Consulting a bankruptcy attorney could also prove that every cloud has a silver line. Most of the bankruptcy lawyers provide free bankruptcy counseling before hand. All you have to do is to be careful about each step you take and each person you are seeking the assistance from.

These are few established ways to avoid bankruptcy and get rid of the debt as much as possible. Bankruptcy is a lifetime decision and worth to practice with lot of research and watchful steps.

Photo Credit: Bankruptcylawnetwork.com

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