You probably never expected to find yourself in a situation where you were ever contemplating bankruptcy, but it is important to make sure that you are thoroughly thinking it through should you find yourself in a rough financial spot. This way, you can get the help you need from the bankruptcy courts, should you need it. Here are some of the things that you will want to keep in mind.
The Creditors Refuse Payment Plans
If you have fallen behind on your bills, but you are now in a better place financially, it is time to try to get caught up with your bills. However, unless you are able to pay everything in full all at once, you need to make arrangements with the individual creditors to see if they would be willing to accept payment plans. If they refuse, for whatever reason, you will want to consider talking with a bankruptcy lawyer about the possibility of filing for a chapter 13, which is a repayment plan through the courts. If you now have enough monthly income to support a plan, it should be easy enough to get approved.
You're Financially Sinking Faster Every Month
If you are in a position where your financial concerns are still very much present, such as a loss of employment or a long-term injury, you will want to think about filing for a chapter 7 bankruptcy. In this type of bankruptcy, the courts will dismiss your debts, and you could find yourself completely debt free by the time the case is discharged from the courts. However, government student loans are not able to be included in a chapter 7 bankruptcy.
Also, you can reaffirm your car loan or mortgage if you want to keep the car and the house, but you must be able to show the bankruptcy courts that you do still have enough income to at least keep up on those debts. All other personal loans, credit cards, and old utility debts, among other things, can be wiped clean from your record. You will no longer have to worry about how you will be able to not only catch up on those payments but keep up with the monthly bills that you get from those.
Always make sure that you are scheduling a consultation with a bankruptcy lawyer as soon as possible. You will want to bring in copies of the bills from all of your debts, as well as your proof of income. This will give the lawyer all of the information he or she needs to decide which chapter of bankruptcy, if any, would be ideal for you.