When you or your business is facing mounting debt, it can sometimes be hard to look at the problem head on. Other times, you’ve taken all the necessary steps like cutting down on your bills and outgoings, but it still isn’t enough. Once you believe that you’ve done everything that you can to mitigate your debt problem, your only option may be to declare bankruptcy.
Check that you fulfill the criteria for somebody that should declare bankruptcy. The American Bankruptcy Institute suggests that people who have experienced wage garnishing should file. Also, those people who have unsecured debts on credit cards should consider. As well as those who are suffering harassment by debt collection agencies or are subject to legal action. For more advice head to http://dovebankruptcylaw.com/.
So what advice is out there?
Evaluate Your Financial Situation
The first thing that you need to do is take stock of exactly where you are financial. Bankruptcy should be a last resort, so it’s worth checking whether there is anything you can do right now to pull back from the brink.
Even if you can’t resolve the problem because the debts are too big and the income too small, you can try to find out what went wrong in the first place. Was it just frivolous spending? Have you not effectively budgeted for unforeseen expenses?
Get A credit Report
If you go to www.annualcreditreport.com you can get a report on who you owe what money. Remember, bankruptcy doesn’t actually clear the record of debts itself even if creditors are no longer contacting you.
And here’s the problem. If you begin the process of filing, but don’t include all your creditors you won’t clear the debt and you’ll have to restart proceedings. Bad news.
Tell Your Creditors You’re Filing
When you file you should inform all your creditors of your decision. Tell them the name of your attorney and the district in which you’re filing.
The law requires that they stop all forms of debt collection correspondence with you if your petition is successful. This includes phone calls, letters, and emails.
Go For Credit Counseling
In the US, it’s a legal requirement for those filing for bankruptcy to undergo credit counseling. This is usually with a government-certified counseling agency. A good idea is to do this sooner rather than later so that you don’t hold up bankruptcy proceedings. Most people try to do this about six months before their day in court in order to prevent any legal hurdles.
Plus, it’s usually a good idea to find out what the original problem was. Perhaps the reasons were purely financial. Perhaps bankruptcy was the result of addiction or some other compulsion to spend. Getting to the bottom of the problem means that you’re less likely to suffer in the future.
Find A Legal Representative
Finding the right person to represent you in court is important. It’s risky to file for bankruptcy on your own. They will be able to take you through all of the costs and benefits, and tell you when is the best time to file.