Millions of Americans each year find themselves in over their heads when it comes to credit. They have too much debt, and with no way to repay it, find themselves looking to bankruptcy as a solution.
If you are unsure whether you might be heading toward bankruptcy, there are some warning signs.
- If you have no health insurance or have inadequate coverage, you could be headed toward bankruptcy. One major health issue and your medical bills could push you over the edge.
- You have maxed out your credit cards. You should use no more than 30 to 40 percent of your available credit at any one time. If you’re above that, you’re in trouble.
- If you are using your home equity loan or line of credit for things other than those related to your home, you may be in trouble.
- Living from paycheck to paycheck is never good, and if you are doing so, you could be at high risk for bankruptcy.
- You only pay the minimum balance due on your credit card bill each month.
- If you have a tax lien or foreclosure on your home, or your car or other property is repossessed because you can’t pay, you’ve lost your grip on your financial situation.
If you have lost your grip on your financial situation, you may be headed toward bankruptcy. But you can regain your grip and get back on track by following these tips.
- Don’t spend impulsively. If you have a problem with this, curb your spending by planning ahead. Don’t go to the mall. Eat at home, rather than eating out. If there are sales going on at your favorite stores, don’t go to those stores.
- Don’t use a credit card unless you have the cash to pay it off. And make it a habit to pay your cards off each month.
- Shred pre-approved credit card offers – don’t apply for new cards.
- Set a budget and stick to it, beginning as soon as possible.
- Only buy or rent the size home you need.
- Make sure you have enough medical, homeowners and auto insurance.
- Don’t make high-risk investments.
- Don’t co-sign for someone who has debt problems, or work with others who have questionable financial habits.
You can get back on track and avoid bankruptcy. Just take an honest look at where you are financial, make a plan, and then stick to your plan.
Understanding What Filing Bankruptcy Can and Cannot Provide for you
Filing for bankruptcy can help give you peace of mind when it comes to overwhelming debt. It can do a lot for your financial situation but there are some things it simply can not do. Learning what it can and can not do for you is important before you file bankruptcy. You may be disappointed thinking your whole slate would be wiped clean and in actuality, it will not. Take a look at the things that bankruptcy filing can and can not do before you consider this route.
What Can Bankruptcy Do For Me?
For those who have a great deal of credit card debt, bankruptcy can help you get rid of that debt or get it to a reasonable payment option. Credit card debt is usually unsecured loans which means that the creditor does not have a lien on any of your property. It can help you eliminate this debt which is typically a huge part of a person’s debt situation. This will also typically wipe out any other unsecured debt you may have. It will depend on which chapter you file.
It will also help to stop harassing phone calls from creditors. While trying to collect unpaid debts these callers can be quite nasty. It is their job to try and collect on the debt owed so they do what they can. Filing bankruptcy can help stop those calls and activities.
Filing for bankruptcy can also stop some type of liens but you have to make sure which ones by talking with your attorney. You do not want to assume something will be okay and not be taken away. You want to know what your options are and discuss them with your attorney before making a final decision.
What Will Bankruptcy Not Do For Me?
Bankruptcy will not stop child support or alimony payments from being due. No matter what type of bankruptcy you file you will still owe for these debts. You must pay them in full so you need to have a plan for those debts.
Bankruptcy will not stop the certain property from being repossessed. It can eliminate the debt that you owe but your creditor can still take the property into their possession. So be prepared for your items such as your car to be taken away even if you file. The company can still pick it up but your debt will be cleared.
Your student loans are another example of items not covered under bankruptcy filings. In very rare cases they can be cleared but only if you show it causes you “undue hardship”. This is a very hard process to prove. You must show that you can not pay them now nor can you pay them in the future.
You will also not be able to get rid of tax debts in a bankruptcy filing. These debts will still have to be repaid even after clearing your slate of other debts.
The best route to take is to talk with your attorney and see what your plan of action should be. You can become more financially stable and start over if you decide to file for bankruptcy. Be sure to discuss which chapter you should consider filing and also consider all of your debts. If you do not list them in the filing they can not be cleared.
Essential Steps To Take When Hiring a Bankruptcy Attorney
When considering bankruptcy there are some essential steps you should take when hiring a bankruptcy attorney. Filing bankruptcy is an important decision and so is hiring the right bankruptcy attorney. You will need the best attorney working on your side and helping you through the process during this time. The bankruptcy attorney will work tirelessly to represent your interests in a bankruptcy court. They will help you understand the process and understand some of the more complicated aspects of bankruptcy.
Below are some essential steps in the process of hiring a bankruptcy attorney that you should be aware of.
Level of Professionalism
This is vital. The attorney should be very professional and provide you with prompt, reliable service that you can depend on. They should be dedicated and devoted to helping you with your case. You don’t want to deal with an attorney that acts aloof and uninterested which can lead to inaccurate information. Not only do you not want this, you can’t afford this to happen. Bankruptcy is a serious situation and the attorney needs to be serious about helping you. They should be on your side in order for you to get the best results. If your bankruptcy attorney is not professional, fire them and find someone else who is.
Number of Years
The attorney should be experienced. The longer an attorney has worked in the industry, the better and the more adept they are. They are also much more knowledgeable and are able to provide you with the best results. If you want the best result and have a successful outcome, you need an attorney that has experience. Do your research. Not every attorney is qualified or has the right experience needed. If they have worked on a bankruptcy case before, then they know what to expect and how to go about getting the best outcome.
Areas of Specialty for the Attorney
Most attorneys have a specialty. But many will work on a number of different areas. You want to go with an attorney who specializes in bankruptcy cases. This ensures that they are up to date on all the laws and regulations. They don’t have to spend a lot of time researching case law because they already are aware of the laws. If they choose to specialize in bankruptcy alone, they are going to be well-qualified to help you and they will have experience working with these types of cases in the past.
Background of the Attorney
Do thorough research on the attorney. Contact their associations. Ask family and friends if they know about the attorney. Have they worked in other areas of law? Attorneys that have experience with both prosecutions and defensive cases are going to know both sides to the playing field and be much better at providing the services they offer.