People with very large amounts of debt are searching ways to fix the problem
. Many choices come to the forefront, but it will all depend on many different factors. Bankruptcy is something more people are choosing as a way out of financial troubles. The key is finding out if this is what is best for you. In this article we will look at bankruptcy and see if it is what is in your best interest.
Dealing with debt problems can be tough on individuals and family. Before you decide to file you need to take a closer look at your financial picture. Here are some things that you will need to look at before making this tough financial decision.
The first step is to gather all your bills together and see how much you are actually in debt. How weird it may sound many people cannot actually tell you how much they owe. Tally up all your loans, credit cards and bills to see where your financial picture actually stands.
Grab your three credit reports from all three credit bureaus. You will want to look and see what is on these reports. Many times we forget about bills or collections against us. This will give you a good chance to see where you stand to others who request your credit report. These three credit reports should also be looked over in case there are any mistakes on them as well.
Make a budget of all your expenses and how much money you actually bring in to your household. The budget will be able to tell you how bad your situation really happens to be. If your expenses far outweigh your monthly income bankruptcy maybe an option that you will want to consider. Before choosing bankruptcy see if you can work out a payment schedule to try and get back on track. If that is not possible maybe filing is your own option left.
You will also need to decide which two options that would work best for you. Chapter 7 and Chapter 13 are the two options that you have at your disposal. Chapter 7 will get rid of most of your debts including credit card, and medical bills, but not child support, taxes, or student loans. Chapter 13 requires that you make payments on your debt in a three to five year plan.
Deciding which option is best for you could depend on your current income and situation. If you have a high income Chapter 13 will probably be your only option. Look into the rules very carefully as each will cost you to lose certain things. By knowing everything you can make a decision about your financial future.
Bankruptcy is a big decision and something that should be taken slowly. Talking with a lawyer to see what options you have. Maybe a repayment plan can be used instead of filing bankruptcy. Do not leave an option unopened. Visit each one and then you can make a decision that is best for you and your family.