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The Decisions You Need To Make Before Bankruptcy

By Edited Nov 13, 2013 0 0

Bankruptcy can save your house, stop creditor harassment, and give you protection against the worst possible financial circumstances. Many downplay the reasons for filing bankruptcy. Yes, bankruptcy is not always the best option, but it is definitely better than most of the alternatives.

Is Bankruptcy the Best Alternative?
This is a choice you do not have to make immediately. It's best to do it with legal and financial experts, together with your loved ones.

The causes of filing are many. You can have just got a $50,000 medical bill, or lost a job of ten years, or face foreclosure since your family income was cut in half. This is where bankruptcy can truly be a life changer. It's made to help those with unthinkable debts. And what's an out of the question debt? You have no means of paying it back, no way to gain any ground by saving for 3-5 years. It's very common to have a bankruptcy where you have no other feasible options.

File Chapter 7 or Chapter 13?
Filing Chapter 7 is never best. Occasionally a Chapter 13 bankruptcy is much more in your interests. Or it may be the opposite, that Chapter 7 will save you from a financial nightmare.

You don't always choose bankruptcy, but you often can choose how to use it on your own terms. This is a conclusion to make with some legal guidance. Filing Chapter 7 discharges most of your debts, but looks after you less from foreclosure and repossession. Chapter 13 bankruptcy is more about protection, not saving.

Hire a Lawyer?
Should you hire an attorney or forgo legal counsel? Often times it's out of your hands: you just can't afford an attorney. It may be a tough decision to make. Whatever you can do to pay seemingly large legal fees is worthwhile. These legal fees occasionally are in point of fact too much; that makes shopping around smart. Still, paying a lawyer $2,000 to save you $50,000 doesn't sound too bad.

What Will You Lose?
You stand to lose some assets if you don't file, but you need to pay that lawyer fee. You might lose your house, but filing bankruptcy doesn't seem right. Quite often, you lose more by avoiding bankruptcy than making the decision and filing. If you file Chapter 7 bankruptcy, you might have to part with some nonexempt assets. If you file Chapter 13, you may need to pay the majority if not every one of the money you owe. So this may cost some assets and cash. If you do not file, many stand to lose everything. Often times the best choice is to file.

What Will You Gain?
You acquired a second chance with bankruptcy. Sure, you can select a debt consolidation company, miss a payment, and have no legal recourse. You could do nothing and wait for the bill collectors to take everything. These are decisions to be made. Sometimes simply sitting down with a lawyer in a no cost consultation gives you the best picture of your options, and the way to produce choices.


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