No one really wants to file for bankruptcy, it's kind of like admitting you failed. Yet, if you're in a situation where you borrow more money just to eat and survive and simultaneously borrow more money to pay off past debt, filing for bankruptcy might be a prudent route. If you are having trouble juggling all of your current debts and have no chance of increasing your income anytime soon, it's time to at least consider the concept.
Getting deeper and deeper into debt won't do you any good, and it's not fair to your current creditors or those you might be looking for in an attempt to 'take Peter for'. pay Paul ”. If you keep juggling for too long you are sure to see everything fall apart. You'd better go bankrupt with a plan. If you do it right, you might find the whole experience to be a lot less painful than you ever could have imagined.
Going bankrupt will give you a chance to start over
Just think how wonderful it will be to get out of all that debt. Debt that keeps you from moving forward and doesn't allow you to go back – stuck in a rut. Imagine all that financial stress instantly disappearing. It might be time to consider filing for bankruptcy.
It is not a decision you should take lightly, nor a decision not to pay off the legitimate debt you own. It's just that sometimes people get into bad situations. Usually it is a serious event, the accumulation of which leads to a road that ends in a cliff.
There will be assets that you may not be able to keep, and there will be debts that you cannot pay off. There will be some tough decisions to make, but if you plan it right, it could be the smartest move you've ever made.
Why it is important to hire a bankruptcy lawyer
There are some things we might be able to do on our own, but without proper prior experience it could lead to disaster. Filing for bankruptcy can be one of those things. The best bankruptcy lawyers will normally allow you a short, no-cost consultation to explain the basics of bankruptcy, usually around 30 minutes.
You should take advantage of it. Bring your list of questions and a list of all your debts and sources of income. You need to be candid with the reality of your situation so that you get the right answers and you can ask the right follow-up questions.
If you are declaring bankruptcy yourself, that's it. You are alone. Bankruptcy courts, judges, trustees are not allowed to give you advice and beware of advice online. A bankruptcy lawyer can look at your exact situation and all of your assets and advise you on which assets you can keep and which you will need to turn over to the court or to your creditors.
A bankruptcy lawyer can also advise you on which creditors you should keep paying and which ones you should stop paying while you go through the process. In addition, any tax ramifications that you will have to deal with or that could result from it.
A lawyer on your side can also help you as a powerful negotiator who is in your corner and on your team. Maybe you can make a deal with your major creditors; auto loans, home loans, credit cards and the IRS, and giving up bankruptcy? You won't know until you ask. Remember that filing for bankruptcy has consequences, but also benefits. Make sure you know the facts.
When is the best time to file for bankruptcy?
Once you've consulted a bankruptcy attorney and know all of the relevant information, you'll want to strategically plan when to file. It matters. Why is this important? Well, depending on what type of bankruptcy you choose, you might be using an 'income averaging' format, in which case it is important when that averaging starts and stops.
Maybe you have real estate on the verge of foreclosure, if so you will want to drop it off before foreclosure. If you are preparing for a mortgage payment modification, it could also change the optimal time to file for bankruptcy.
If you are going through a divorce, filing for bankruptcy can become more complicated and expensive. Maybe, on the other hand, it makes more sense to you. This is yet another reason why you need a seasoned bankruptcy lawyer to help you through the whole process from start to finish.
Do you have huge expenses ahead, inevitable costs that you will incur? Do you have any future costs that you are already obligated to and are about to demand payment?
Are you bombarded by credit collection agencies asking for money you owe but can't pay? Did you miss payment for rent or accommodation? Are you using your retirement money to pay for living expenses and bills? Generally speaking, retirement accounts are safe, so you may want to file for bankruptcy before emptying your retirement account, obviously you will need it later.
Did you know that the most common time people go bankrupt is in the first trimester, after Christmas spending and before taxes are due? Did you know that most people use their tax refunds to partially pay off their bankruptcy filing? Some people file for bankruptcy in the first quarter as a New Year's resolution to get out of debt in the New Year.
These may seem like great reasons for choosing the first trimester to file, but they are certainly not the most important reasons for choosing the best time. Call a law firm to discuss and understand this together. You need a plan that makes sense to you.
Why not talk to a bankruptcy lawyer about your particular situation, then ask them to help you make a plan. You know what they say; "Sometimes timing is everything!"