Before you file for bankruptcy, you should consider if there are options available to help you avoid it. If you doubt your ability to pay your debts at all, you can, and should, consult with an attorney about potential bankruptcy. However, there are a few more things you can do to avoid this drastic step.
1. Take Inventory of Your Debts and Financial Situation
Having all the numbers in front of you can give you a far better look at your situation. Figure out your debts and write them all down. Make a list of what you owe and who you owe it to. Next, write down how much money you have and how much you plan to make as you go forward.
Often, this broad look at your financial situation can help you determine if you really need to file for bankruptcy or if you can come up with a plan to satisfy your debts over time. Ask yourself:
- Do you think you can make small payments on your debt without sacrificing your lifestyle?
- Does it seem feasible that if you combined your debts, you could better manage the payments?
- Do you see that your debts are so excessive that even making payments wouldn’t help?
These questions will help you figure out how to proceed. You may have the right debt to income ratio to satisfy your creditors if you make some life changes. If you can budget, cut your spending, take on another job, or make other helpful financial choices, you may be able to avoid bankruptcy and find yourself debt-free in the future.
2. Research Ways to Avoid Bankruptcy
The internet is an excellent resource to figure out if you can mitigate your need for bankruptcy. Many people online have faced the challenges that come with rising debt and aggressive creditors. You can find websites, forums, and a whole universe of information with a few searches.
As you search, try to drill down to information that can apply to your specific circumstances. Your situation is unique to you, so don’t assume that every solution you find will apply to or work for you. Research is about gaining information. You will have to carefully gauge if the information you find applies to your situation or not.
3. Speak to Your Creditors and Negotiate
Don’t avoid your creditors. Instead, speak with them and hear what they have to say. Before you get on the phone with a creditor, make sure you have any information they sent you and a good understanding of your own financial situation.
You may find that your creditors are willing to set up a payment plan, lower your monthly payment, negotiate a settlement amount, or generally do something that can help you to pay them. This isn’t always the case, but the possibility is often worth trying to negotiate for.
When speaking with a creditor, don’t make any promises to them and don’t even admit that you owe them anything. You should make offers and see if they’ll agree to them. You can also make it known you’re attempting to avoid filing for bankruptcy.
Whatever comes of the call, make sure you get it in writing. If nothing comes of the call, ask your creditor to send an official notice of the debt they claim you owe.
4. Consult with a Bankruptcy Attorney
A bankruptcy attorney service helps with more than just filing for bankruptcy. Your attorney can help you navigate your financial issues and give you options for going forward. Sometimes bankruptcy isn’t necessary, and sometimes handling certain issues before filing for bankruptcy can help.
At any point, as you consider bankruptcy, you can ask a bankruptcy attorney about your next steps. If you need debt relief solutions up to and including bankruptcy options, contact The Madden Law Firm today.
