When you hire a bankruptcy lawyer, your goal shouldn't be only to discharge debts, but to change your lifestyle. Making positive financial changes will help you rebuild your credit.
Think you can pay off your debts? While some people feel a moral obligation to do their best to dig their way from under a pile of mistakes or misfortune, a bankruptcy lawyer might encourage you to save yourself. It can be unrealistic in some cases to think that you can climb out of a deep financial pit if you simply don't have the income. You can try chipping away, but even after consolidation and forgiveness of some penalty fees, you may find that the interest rate far exceeds your ability to progress with payments. Your admirable attempt may just result in more frustration, further debts, and a delayed filing.
Firstly, it is important to examine all of your options beforehand. Have you consolidated your debt or loans? Have you asked for any forgiveness such as reduction in penalties, payment plan options, and elimination of accrued late fees? Have you considered borrowing money from relatives or friends in order to eliminate debts with the highest interest rates? Simply ignoring the problem can cause a small issue to snowball into something unmanageable. Many creditors are willing to assist people and would rather get something than nothing at all. If you don't think you can deal with it yourself or are too overwhelmed, a bankruptcy lawyer can help get in touch with creditors and help you decide whether or not there is a chance to pay off your outstanding debts.
If you do choose to file, when talking with your bankruptcy lawyer, you should also ask about credit counseling and financial advising. They can give you some references and advice to help you get started. Filing and having your debts discharged isn't enough. Unless there were some external circumstances surrounding the debt (such as unexpected medical bills), it is likely that you have difficulty balancing your budget. There are several courses, seminars, and professional services that may be available at a low cost or even offered for free. The point of even having to hire a bankruptcy lawyer and clearing your credit record is so that you can have a clean start. If you refuse to make changes, you'll be in the same position within just a few years.
While it is important to make some serious financial changes in your life with the help of your bankruptcy lawyer, you also will need to work on rebuilding your credit. While you don't want to take out several cards and max them out again, choosing one and requesting a lower, more manageable limit can be helpful. If you're fearful of getting into an overspending habit again, only spend money that you have. Pay off your balance in full at the end of each month. Many debit cards that draw directly from your bank account will actually count as credit, but be cautious not to over withdraw on accident. Avoid taking out loans for cars or other big ticket items until your credit is strengthened. If you do, you will likely get slammed with inflated interest fees, as you are a much higher risk. With a bit of patience, in a few years you will have a good credit score again.
