Considering Bankrupty - Things to Consider

If you are straddling on the line of bankruptcy, you should consult a bankruptcy attorney before you proceed any further. Bankruptcy is a big decision to make and you need to make sure you clearly understand all of your choices and the long reaching consequences of bankruptcy before you file. An attorney can help you figure out if this course of action is the best solution for you and help you decide what type of bankruptcy is best for your situation.

The recent down turn in the economy has led to an increase in home foreclosures and a rise in unemployment which has led to more consumers pushed to file bankruptcy in order to get their heads above water again. With this in mind, be assured that if you are considering bankruptcy you are not alone.

An attorney can go over what can and can not be discharged in a bankruptcy filing. For example student loans, child support, alimony and back taxes may be a heavy financial burden to you but they are not debts that can be discharged. However other debts such as unsecured and secured loans for cars or homes can be discharged and often with these burdens removed other non dischargeable debts can be meet more easily.

Before you consult your attorney, gather all of your financial paperwork together so you will know what debts you have and how much they total. Remember anything that you don’t include on your bankruptcy won’t be included so if you forget a debt it won’t be discharged and you will be responsible for it. This is where it helps to have an attorney who can make sure every dischargeable debt is included.

You also need to remember that your bankruptcy is on your record for seven years, which will affect your future credit. However unpaid bills incurring interest that you can’t pay will do more long term damage to your credit than a bankruptcy. This is a topic you should fully discuss with your bankruptcy attorney so you can make the best decision for yourself in both the long term and the short term.

Bankruptcy isn’t always about just walking away from your debt and losing your possessions however. For some consumers who are trying to save a home from foreclosure and are expecting to become financially solvent again shortly or are already there, chapter 13 can offer a solution. Chapter 13 will allow you to work out a repayment plan with your lender for the past due and get current on your current payments.

If you are considering bankruptcy, consult your bankruptcy attorney and make sure you fully understand the benefits and pitfalls of filing, and make your decision based on facts, not fear.