Before the Bankruptcy Lawyer: Can You Get Yourself Out of Debt?

If you are facing debt and you need to file for the discharge of much of that burden, there is no question that you need to set up a consultation with a bankruptcy lawyer to figure out where to go from here. For many people, there is no other reasonable choice. However, don't jump straight into Chapter 7 or Chapter 13 if you don't have to. Though it provides a safety net for those who will otherwise spend their entire lives trying to pay back impossible sums, it also takes a serious toll on your credit record. Choosing to file means accepting the fact that your credit will be more or less ruined for the next seven years. If your credit is already ruined beyond repair, this may not matter. If it is still salvageable, however, there may be a better way out.

One way you can pay back your debts is by selling off some of your property. Books, electronics, real estate, jewelry. Anything you don't have much use for anymore (or sometimes, even if you do) could be sold to acquire some extra funds. You might be surprised, if you really look, at how much stuff you have that could go into a payback fund. Of course, if all you have are some old DVDs that will sell for a dollar apiece, it may not be worth all of the hassle. Make a judgment call and see if any of your belongings could be sold for debt payback capital.

Something else you should always try is talking to your creditors. Many credit card companies, finance institutions, and mortgage lenders are willing to work with their customers within reason. If you can make a few phone calls and avoid having to go see a bankruptcy lawyer, this might very well be worth it. Times are tough and a lot of people are out of work or working for wages that would have been unthinkable just a few years ago. These lenders understand the deal and they would like nothing more than to get paid back in some form or another.

Make a budget. Seriously, this is one of the main things that people who often find themselves drowning in debt have never bothered to do. They don't understand that their expenditure/income ratio is way out of whack. If you sit down and figure this out for yourself, you may be able to cut back on your budget to the point where you no longer need to consider seeing a bankruptcy lawyer. Here is something to think about: as part of getting your debt legally discharged, one of your obligations will be to take a course in financial responsibility. One of the things this class will teach you is how to budget so that you are spending less than you earn. It's called living within your means; or better yet, living below your means. This allows you to put away savings, rather than digging an enormous debt hole.