To declare yourself unable to pay for your bills or that all of your assets are distributed to your creditors isn't easy. No one wants to get bankrupt, it can hurt your chance for a decent credit score, ultimately ruining and limiting your financial options. Chapter 7 or 13 can stay with you up to ten years on your credit history when you file for bankruptcy. There are times when bankruptcy cannot be helped but there are preventative measures you can take to avoid it before it even begins.
- Get Financial Counseling First Before Doing Anything Else Financial counselors can help you figure out where your finances have gone wrong. A financial counselor can help you:
Â· Make a budget to help you avoid bankruptcy now and prevent bankruptcy in the future
Â· Understand your options, legal rights, and responsibilities
Â· Work with your creditors
Â· Find programs that offer you legal, financial, or other help
It never hurts to ask for help from a professional by consulting with Los Angeles bankruptcy lawyers if you are just not sure what went wrong. Talk to your financial advisor to get your finance back on track.
- Don't Put it Off, Talk to Your Creditors Right Away Talk to your creditors. Your options will get smaller the longer you wait. You would be surprised that not even your creditors want you to go bankrupt because it costs everyone involved time and money. When you get a feeling that you are starting to fall behind on your payments, don't put off the call to your creditorsâ€“call right away.
- If Necessary, Adjust Your Housing Costs A quick FYI (for your information) â€“ your housing cost should range from about one third to one fourth of your total household income. Most housing expenses tend to be high, but if it is too high, you can get them lowered. Shop for lower homeowner's insurance, property insurance and try to refinance your house, maybe try the option and take out a second mortgage.
- Create a Monthly Budget Create a budget that is as detailed as possible with your most essential expenses. Remember, a budget is only practical if you adhere to it, so ensure that you have sufficient capital to cover all the expenses in your budget, including your: mortgage payment, rent, food, transportation etc.