If you’ve exhausted every alternative to filing for bankruptcy, and believe that’s it’s your only logical choice in making a fresh start in your life, then you must do what you need to do. Be sure to do your due diligence in learning everything you can about the entire process, now that you believe there’s no other recourse is available to you. Make sure you take into account that a bankruptcy filing will indeed negatively impact your credit score and rating with the three major credit bureaus.
Hopefully you’ve spoken to a bankruptcy attorney (many of them offer a free one-on-one counseling session to first-time clients) or some other financial advisor, and after informing that individual of your plight, (s)he agrees with your decision to file and feels it’s the best course of action for you.
At what point does a person realize declaring bankruptcy is their only way out of their financial nightmare? While everyone’s situation is different, there are a few signs that point to the “writing on the wall” such as, constantly borrowing money from one credit card in an attempt to pay off another credit card and/or taking cash out advances of more than $500 just to pay living expenses such as groceries and utility bills. These are ominous signs that a person is headed for trouble.
Another sign of impending doom is when you cease answering your phone calls, because most of them are from creditors harassing you about your credit card debt. Are they threatening to sue you? Unfortunately there are no laws that regulate the collection agency industry, and some of them can be quite nasty in their attempts to force you to pay what you owe. Have they begun to take any kind of legal action against you?
Before you can adequately deal with these harassing creditors, you have to know how to fight them. Happily there are numerous resources available to you both online and off, that you can utilize in beating them at their own game. Knowing this information will certainly help you sleep better at night. The next time you receive a call from a creditor harassing you about your credit card debt, simply tell this individual you see no feasible way to repay your debt, and you’ve initiated the bankruptcy process.
The word “bankruptcy” is like poison to a creditor because once you receive your discharge, you can simply make copies of it and dispatch it to all the creditors you owe. The bankruptcy court should perform this function for you as well, as part of your payment in filing. At that point, your creditors should avoid you like the plague. This is of course, contingent upon the type of debts you owed. I refer you to another article I wrote entitled, “Are You Making The Right Decision In Filing For Bankruptcy?”
In that article, I list nine types of debts that you’ll still owe even after you’ve filed for bankruptcy. These specific debts will remain intact, after your filing, as if you never declared bankruptcy in the first place. On the other hand, I also list in that article 6 types of debts a bankruptcy filing will completely eliminate. You might want to read that article at your earliest convenience to see if the type of debt you owe is (or isn’t) one that can be discharged. If you owe debts that can’t be discharged by filing for bankruptcy, your creditors can still come after you just as they did before you filed.
If you’re not sure whether you should file a Chapter 7 or Chapter 13 bankruptcy, it’s a clear sign that you haven’t properly research what type of filing would best for your particular set of circumstances. There are numerous resources available to you on the internet, or at your local library, as well as financial advisors and attorneys you can speak with, that can inform you about which option would be most appropriate for you. Don’t concern yourself with a Chapter 11 bankruptcy because that only applies to businesses and/or corporations.
The most common type of bankruptcy people file is a Chapter 7 or Chapter 13. A Chapter 7 filing will eliminate most of your debts, and gives you an immediate fresh start, depending upon the type of debts they were. A Chapter 13 filing allows you to continue making payments to your creditors for another 3 to 5 years.