Exhaust Your Options Before Filing for Bankruptcy
It's true that filing for a consumer bankruptcy may discharge a good chunk of or even all of your debts in some cases. That said, a bankruptcy is not a "get out of jail free" card. It is something that will stay on your financial record for years and may affect your chances of getting credit in the future. With that said, it's a good idea to make sure you at least look into other potential options before going right to bankruptcy as your solution. Here's what you should do if you are thinking about filing soon.
Hire an Attorney Before You Go Further
First things first, a consumer bankruptcy attorney can help you in your current situation even if you are still looking for a way out of filing for bankruptcy. Bankruptcy attorneys are adept at looking at your entire financial record and coming up with the best possible solution for you. Your attorney may also be able to negotiate on your behalf as you seek to eliminate or reduce your debt.
Try Contacting Your Creditors
As a last-ditch effort to avoid bankruptcy, you could have your attorney call your creditors and tell them plainly that a bankruptcy is imminent. Depending on the type of debt, some creditors know that once a bankruptcy is filed, it is unlikely they will get anything from you. This may cause them to negotiate with your attorney to significantly reduce the amount of interest you owe, waive your late fees, or give you additional breaks. You can try doing this on your own of course, but having an attorney on your side tends to speed things along.
Will Consolidation Work?
One additional alternative may be to try and consolidate all of your existing debt under a new loan. Consolidation companies may be willing to work with you directly, but you may be able to get a better deal when working with an attorney. Your lawyer can call all of your creditors and fill everyone in on the situation. You might be able to settle for a fraction of what you owe once the creditors know that you will be paying them a lump sum thanks to the consolidation loan.
If your credit has gotten to the point where you are no longer even eligible for a consolidation loan and not enough of your creditors are willing to play ball and negotiate with your attorney, then it's probably time to move forward with your consumer bankruptcy case. Contact an attorney today to begin the process of getting your financial life back on track.