Deciding to file bankruptcy can be a complicated and overwhelming decision. The circumstances that lead to considering bankruptcy vary widely, stemming from events that are beyond your control, such as a catastrophic personal injury that left you unable to earn a living. You might feel like you do not know where to begin. Chances are, if you are contemplating bankruptcy, it is a good idea to consult a Manchester bankruptcy lawyer. In addition to consulting a bankruptcy lawyer, you may want to consider the following questions.
1. Have I exhausted all other available options?
Bankruptcy should be a last resort. While each situation is different, some people find it helpful to write down their monthly expenses and see how much money they can put toward debt by cutting out things like restaurant dining, movies with friends, and unnecessary home repairs and purchases. Others might look for additional ways to save money by looking for cheaper grocery options or buying necessities, like clothes, from discount stores.
After cutting out unnecessary expenses, it may be beneficial to look at your valuable assets, such as additional cars, jewelry, or additional properties and consider selling them. While not the right choice for everyone, it is also worth considering using money in a joint savings account to pay off debt, since these accounts can be used to pay off debt during the bankruptcy process anyway. Discussing the options with the other person on the account could lead to a mutual decision to use the money to pay off debt prior to filing for bankruptcy.
While you should use most of the money in most of your accounts to pay off debt, it is usually a good idea to avoid tapping into retirement accounts and pension funds. In most bankruptcy filings these accounts are not seized.
2. Have I considered the personal ramifications?
Declaring bankruptcy is a public process, which means anyone can look up the details of your case. Because of this, it is important to consider how this could affect your relationships going forward. Furthermore, declaring bankruptcy will stay on your credit report for seven to ten years, depending on the type of bankruptcy you file. This can make it difficult to buy things like a car or a home and even increase your rates for things like car insurance.
3. Have I made a detailed list of my current eligible debts?
While some people may assume all debts are eligible for bankruptcy, this is not the case. Debts such as medical bills, personal loans, and credit card debts are typically eligible for bankruptcy. Other common debt people carry that is not typically eligible includes student loans, child support, some unpaid taxes and property damage.
4. Have I completed credit counseling?
Prior to filing for bankruptcy, you will be required to take an educational course with topics such as budgeting. The credit counseling agency must be approved by the U.S. Department of Justice Trustees. These courses do cost money, but there are ways to get the course for free or a reduced rate.
5. Have I contacted a bankruptcy lawyer for a free consultation?
The Law Offices of Ronald I. Chorches offer free consultations for anyone considering bankruptcy. Schedule your consultation today to discuss next steps.