When a serious change in your income occurs, it can turn your world on its ear. The inability to pay your debts can cause considerable stress, and you may wonder if personal bankruptcy is the solution. However, before you file, there are a few questions you may want to ask yourself first to ensure this is the solution that is most effective for your situation.
- Will Creditors Work With Me?
Depending on the amount of debt you currently carry and how far behind you are on your payments, some creditors may be willing to work with you and set up payment plans that are easier on your current budget. If you suffered a job loss or a divorce that caused a serious loss in assets, a creditor may be able to delay payments until you find new employment or until you settle your divorce. While this depends on the individual company or organization, creating a new or altered payment plan may allow you to delay or avoid bankruptcy.
- Do I Have Enough Debt To Qualify?
You may wonder if there is a minimum you must meet before you can file for bankruptcy, but in fact, you can file no matter the amount. When it comes to making this choice, you may want to focus more on the inability to pay your debts rather than the total amount you currently carry, as this is usually the main reason individuals file in the first place.
- Will My Debt Vanish?
There are several different types of bankruptcy, and you might consider Chapter 7 as a means of erasing your debt and starting fresh. With this type of bankruptcy, the court appoints a trustee to oversee your case, and he or she examines and reviews your assets, which are then liquidated as a means to pay off your debts. Once the liquidation is complete, your past debt is then erased.
- Are There Other Options?
Before you file for any typ[e of bankruptcy, you may want to consider whether you have any other options first. A bankruptcy can remain on your credit report for up to 10 years and seriously affect your ability to obtain future credit and employment opportunities. Before you make a final decision, it is wise to examine whether credit counseling might help you with your current debt, especially if you have income coming in.
The choice to declare bankruptcy is a daunting one, but help is available. Contact an attorney, like a bankruptcy lawyer in Cypress, TX from Winfrey Law Firm, today for further advice and information.