Well, you are a little behind on your bills and it seems like you can catch up. But, then there are a number of bills you are late on, including your mortgage. And, it seems like you have no way to pay off all these loans on your head. You’ve made all possible cutbacks on your lifestyle and are already living off the bare minimum anyway. It may become necessary at this point to evaluate your financial situation and determine if maybe bankruptcy is the only option for you.
When Bankruptcy Is The Only Option:
Here are a few signs that lifestyle changes cannot pay off your debt and you need to find other solutions:
- What you earn may not even be enough to sustain your lifestyle, let alone enough to pay off your outstanding debts.
- You are late on all your bills, and not just one month or two months, but several months behind. And, you’re not just behind on non-essential bills like credit cards but also essentials like electricity.
- Instead of using money from your paycheck to pay for your needs, you are using credit cards to pay off your bills but you already owe the credit card companies money and don’t know how to pay them back.
- You have tapped into every possible loan source, including family, and are unable to make payments towards the repayment of your loan.
Who to Turn To:
It is important when you’re staring bankruptcy in the eye to have the right people on your side. It is necessary to have people on your side who know your situation and have your best in mind. Look for bankruptcy counsellors and financial institutions to help you through this. Here are a few tips to find the right people:
- When bankruptcy is the only option, try turning to financial institutions who already know your financial situation. Your bank may be a good first person to turn to so that you don’t have to explain your financial situation to a whole new person. It may be a good way to save time.
- Always look for referrals when you are looking for bankruptcy counsellors. Ask others or go online to look for referrals to financial institutions or counsellors who are effective at getting individuals and families out of bankruptcy.
- Get counselling. It is a necessary part of the bankruptcy process. It is necessary for you to know how not to get back into debt you can’t get out of.
- Live on a budget. While you may already be doing so, it is necessary for you to know exactly how much you spend and where. Cutting down on unnecessary expenses and increase your income to be able to pay off your debts faster.
What to Ask:
Just as there are a number of things you need to be aware of when choose a bankruptcy partner, it is also important to know what to ask when you are trying to decide on who to go with. Here are some things you should find out about your bankruptcy advisors:
- Ask how they will determine your financial situation. Do they interview you? Do they get your credit scores and paychecks? It is necessary for any credible financial institution to have a complete picture of your financials before they can help you get out of debt.
- Ask them for licenses. All bankruptcy institutions should have licenses to operate and clear path of how they conduct business. Also check with the Better Business Bureau to see if there are any complaints against the business and how they countered any complaints against them. Steer clear of any institutions who have active complaints against them.
- Ask how they fit your financial situation. Any financial institution who is dedicated to helping you will know to fit your lifestyle within the financial plan they set up for getting out of bankruptcy. Even if bankruptcy is the only option, it is still necessary to keep your family fed and your kids in school. Make sure your financial institution takes that into account as well.
- Ask about future financial implications. Depending on the solution you choose to get out of bankruptcy, the impact on your financial future can be different. There will be a number of negative impacts that bankruptcy will have on your credit scores. Know how long the bankruptcy will remain on your credit history and how long it will be before you can start repairing your credit. This is important information you need to get before you get started on getting out of debt.
Getting out of debt is more in your hands than you think. It is necessary for you to turn to bankruptcy only if bankruptcy is the only option. Try to avoid it if you can, but if you can’t make sure that you have only the best people on your side to help you get out of debt.