Avoiding Bankruptcy – Bankruptcy is both a second chance, and a last resort, for people who have reached a place in their lives where their finances are no longer manageable. Legally, this option offers protection when circumstances beyond your control hinder your ability to repay debts. However, even though this option can provide relief from creditors, the repercussions of this decision may hit your bottom line severely at a later date. What can you do when you already feel that you have reached the bankruptcy stage?
Steps to avoiding bankruptcy
- Research Bankruptcy laws differ from state to state. If you are leaning toward bankruptcy, make sure you learn everything you can about your state’s laws so that you make an informed financial decision. Contact a bankruptcy attorney for a free consultation in order to educate yourself on this process. Once you know what needs to happen to declare bankruptcy, you can look into other options to see if bankruptcy can be avoided.
- Inform Inform your creditors that you are in need of a repayment plan because you are considering bankruptcy. Many creditors are willing to work with their clients to avoid going through the bankruptcy process.
- Downsize Even though it may feel like a heartbreaking decision, finding a more affordable place to live, or choosing a more economic car, can assist in providing extra money each month to repay debts. You can also host a yard sale, sell larger items on E-bay, or finally sell that old car or boat in the garage to your neighbor. Look for any opportunity to remove extra items from your home in order to meet another monthly payment.
- Consolidate Look into consolidating your debt so that you can make smaller monthly payments while you are repairing your financial situation.
If you have already exhausted the steps that lead to avoiding bankruptcy, an attorney can assist you with deciding whether or not you will need to declare a Chapter 7 or Chapter 13 bankruptcy.
– This was a guest post by the Westbrook Law Groupwhich is a bankruptcy law firm based out of St Charles, Missouri. They specialize in chapter 7 and chapter 13 bankruptcy and other debt related cases.