Clark & Washington

What Should I Do Before I File for Bankruptcy?

Before you file for bankruptcy, there are several things you should be doing. Bankruptcy can solve many debt problems, but it’s a serious decision that deserves adequate time and attention. For more information about bankruptcy, contact Clark and Washington.

4 Steps Before Bankruptcy

1. Understand the Limitations of Chapter 7 and Chapter 13

The differences between Chapter 7 and Chapter 13 bankruptcies are very distinct.

Chapter 7 bankruptcy is for low-income people with little or no disposable income. Your non-exempt assets will be sold to pay your creditors. If you have no non-exempt assets, your creditors will not be paid. After a successful Chapter 7 bankruptcy, all your unsecured debts will be wiped off the books.

Chapter 13 bankruptcy is for people who make more, but have gotten over their heads with debt. Your assets are not sold. Rather, you would repay your debts at a level and rate that the court decides is affordable for you.

2. Get Organized

Gather all of your financial documents, including pay stubs, bank statements, investment records, receipts, two years’ worth of tax returns, mortgage and car loan documents and anything else your Atlanta bankruptcy lawyer requests in order to handle your bankruptcy case.

3. Look At All Your Options

Bankruptcy may be an attractive option to resolve your debt problems, but it isn’t your only option. Before you file for bankruptcy, you should consider alternatives like:

Debt Settlement – It may be possible to negotiate with your creditors. You might negotiate to make lower monthly payments and have the interest waived. Your creditor might also be willing to settle the debt for a small percentage of the entire amount due. If you don’t feel able to speak to your creditors directly, your Atlanta law firm may be able to step in to represent you.

Credit Counseling/Debt Management – Through credit counseling, you could receive needed assistance to manage your current and future debt. Debt management companies can also help you consolidate your payments so you only have to keep track of one monthly payment instead of several.

Liquidation/Downsizing – Depending on your assets and situation, you may be able to get at least partially out of debt by selling your assets and downsizing to a less costly lifestyle.

4. Get Professional Help

Bankruptcy is a complex issue with many nuances and requirements. You don’t have to go through it alone. Contact an Atlanta bankruptcy attorney with experience in helping residents of Atlanta who are considering bankruptcy. With professional help, you could be back on your financial feet sooner rather than later. Contact us today for a free consultation.

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