Filing a bankruptcy, of any type, sometimes leads the debtor to emotional issues of guilt, low self-esteem and even shame. Filing a bankruptcy can also affect your ability to rent an apartment or in a growing number of states, obtain affordable insurance. In some fields of employment, filing a bankruptcy could affect your ability to get a job or a promotion.
There are many alternatives to bankruptcy proceedings. These alternatives, if available to you, may prevent creditors from taking more of your of property and or help you repair your credit, solving your financial situation and avoiding, in part or in whole, the negative effects bankruptcy can create. Please take the time to review these alternatives, as one of them may be appropriate for your financial situation.
With this in mind, timing is critical to determine if it is appropriate for you to file for bankruptcy protection or whether you would be better off seeking relief through one of the other methods discussed in this article.
Complete a Personal Financial Statement and Understand the Situation.
1. Prioritize your assets. Make a list and decide which assets you want to keep and which ones you need to get rid of! Stick to the list!
2. Which liabilities are reported to credit bureaus? Pay those if you plan to refinance your home soon to get some equity to pay off the higher credit card bills!
HOW DO YOU KNOW IF IT'S TIME TO CONSIDER BANKRUPTCY OR AN ALTERNATIVE?
So, now that you know some general information, how do you know if you should actually file for bankruptcy or participate in an alternative to bankruptcy? Most people have one of the following situations that cause them to contemplate this action:
1. Loss of job
2. Divorce
3. Adverse civil judgment
4. Aggressive bill collection
5. Excessive medical bills
7. Excessive home mortgage adjustable rate increases
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