Hello, my name is Quianna Ridalgo. I enjoy talking to others about bankruptcy case outcomes. Court officials handle each type of debt, from credit cards to home loans, differently. Debtors must carefully prepare themselves for the court proceedings to cope with the outcome appropriately. The way creditors handle the discharged debt also interests me. Bankruptcy attorneys assist their clients with each step of the bankruptcy process from filing paperwork to meeting with creditors. Debtors and creditors both receive counsel that helps them move forward appropriately at every point in the case. The information I share on my site may help you learn about everyone's role in these complex cases. Feel free to come by anytime to learn more information about this interesting subject.
The average American household has somewhere around $17,000 in credit card debt. However, some people have debt that far exceeds this amount. If you happen to fall in the latter group, bankruptcy may be an option that can offer you some relief, but there are some things you need to know if you're considering this decision.
Talk To The Bank First
Bankruptcy should never be your first resort. While it can help you avoid financial ruin by eliminating your debts, it does come with short and long-term consequences. In terms of the short-term, you may be required to part with some of your assets and in the long-term, your ability to get credit and even future employment might be inhibited.
If you hold a position that requires a special license or a security clearance, you may even lose your status. Speak with the bank to see if you can work out a modified payment plan and only resort to bankruptcy when you've exhausted all your other options.
Reassess Your Budget
This is also a good time to reassess your budget. Some people are under the impression that you can simply petition the court, claim you're unable to meet your credit card obligations and the court will simply take your word and rule in your favor. Sit down and reassess your budget to see if you can move any money around to meet your payments because the courts will.
For instance, when you turn in your budget sheet, if you have $200 a month that you're paying for a gym membership and another $500 for entertainment, the courts will likely deny your bankruptcy petition and simply decide that you could use this $700 to pay your debt down. Look for any extra money you can free-up first.
Stop Making Payments
Once you know that you are going to file for bankruptcy, you should go ahead and stop making credit card payments. This is an especially wise decision if paying the debt down is causing you to fall behind in other areas, such as your mortgage or auto loan.
Any payments you are making at this point are basically a waste of money. It's important to stress that you should only stop making payments once you have filed your petition. You don't want to stop 6 months beforehand. Stopping too early opens the door to lawsuits and judgements, but once you're ready to pull the trigger, go ahead and save your money.
If you're over-consumed by credit card debt, sitting down with an attorney is a good idea. An attorney like Greg Dunn Bankruptcy Attorney can review your debt load and finances to help you determine if this is the right move for you.Share