Saturday 15 March 2014

Throwing in the Towel: How to Decide if It's Time to File Bankruptcy

Financial issues can consume you if you don't take care of them quickly enough. If you are thinking about ways to get rid of your debt quickly, filing for bankruptcy may be your best option. How do you know that it is time to throw in the towel?

Have You Tried Consolidating Your Debt?

Debt consolidation can help you lower your interest rate and reduce the amount that you have to pay each month. In some cases, you creditors will reduce your principal balance by a significant amount. You can consolidate your debt in a number of ways such as a home equity loan, a balance transfer or through a debt settlement. 

Could You Sell Your Assets Instead?

If you have enough equity in your car or home, you may be able to sell it instead of having the debt discharged through bankruptcy. This is beneficial to you because you could see your credit score drop by 100 points or more just by filing. When you sell your assets, your creditor will report the debt paid in full and your account closed. This allows you to get out of debt without crippling your ability to get a loan in the future. 

Can You Delay Payments?

When you are behind on your student loans, you may be able to ask your lender for a deferment or forbearance. These options allow you to stop making payments until you find a job or otherwise get back on better financial footing. Some lenders may be willing to do this for you if you are behind on a car or mortgage payment. Delaying your payments until you find the money to make those payments could help you find a solution to your money woes before you have to go for the nuclear option.

Is Full Discharge Possible?

Would you be able to fully discharge your debts? Before you file for bankruptcy, talk to an expert such as this Chapter 7 attorney in Tampa to find out if you could have your debts completely wiped away or if you would merely have them reorganized instead. If you don't qualify for Chapter 7 bankruptcy, you have to make payments to your creditors even if your filing is approved.
Bankruptcy is something that you don't want to do without careful consideration. You need to know what type of bankruptcy you would be eligible for, how it would impact your credit and if it would be easier to consolidate your debt some other way.

Do you have have any questions or suggestions? Write in comment section.

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