Four Things To Know Before Filing For Bankruptcy

Thursday, December 19, 2013, AM | Leave Comment

Filing for bankruptcy is not something you should do on a whim. It is a decision that has long-term consequences for yourself and your credit report. What should you consider before you file for bankruptcy?

Four Things To Know Before Filing For Bankruptcy

  1. Talk To Your Creditors

    The first thing that you should do is talk to your creditors. There is a good chance that they will be flexible when it comes to your debt. For example, your creditors may be willing to waive payments or lower your interest rate. A debt settlement can cut your debt by as much as 50 percent in a single action.

  2. Go To A Credit Counselor

    Credit counselors can help you get a handle on your debt. They will work with your creditors to establish a payment plan that you can live with. A credit counselor can teach you financial management skills and help you create a budget. This makes it less likely that you will have to file for bankruptcy in the future. There are plenty of options near you to help you find an alternative to bankruptcy.

  3. Talk To A Lawyer

    If you are seriously thinking about filing for bankruptcy, you should consider talking to a bankruptcy lawyer. Research local attorneys to see who has the most experience and satisfied clients. For example, the law offices of Jan Perry Lederer are an excellent resource to anyone who needs a San Antonio bankruptcy attorney.

    A skilled attorney can help anyone who needs advice or assistance in an actual bankruptcy case. Whoever you choose, you need someone in the courtroom with you because your creditors will have an army of attorneys ready to attack.

  4. Understand The Impact That Bankruptcy Has On Your Credit Report

    It is critical that you understand the impact that a bankruptcy has on your credit report. A Chapter 7 bankruptcy stays on your credit report for up to 10 years. A Chapter 13 bankruptcy filing can stay on your credit report for up to seven years.

    This means that you will have a hard time getting loans or even a job in the future. It may be impossible to get a mortgage for up to a year after filing for bankruptcy. Your credit score will plummet by hundreds of points immediately after you file.

Anyone considering bankruptcy should know that it is a life altering decision. Before you go through with it, talk to your creditors or to a credit counselor to see what your other options are. If that doesn’t help, talk to a lawyer before going to court. You are sure to lose your case if you try to go it alone.

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