Explore Alternatives to Chapter 7 or Chapter 13 Bankruptcy Before You File
If you have debt problems, bankruptcy might be a good option. It is often the first word people think of when they can no longer pay all of their bills. But before you file for Chapter 7 or Chapter 13 bankruptcy, explore alternatives to bankruptcy. In some situations, a non-bankruptcy plan may be your best remedy.
Know When to Ask for Help
The first step is to recognize when you need help. When you find that over one quarter of your monthly income is going towards minimum payments, you should ask for help. It’s easy to do. Even if minimum payments eat up 10% of your monthly income, it can make life very hard. Whenever you see a chunk of your monthly budget going towards payments on credit cards, it is worth looking at the alternatives.
Set Priorities
The most important expenses to pay are the everyday living needs: food, shelter, and clothing. If you don’t pay your light bill, your electricity can be cut off. The next most important are secured debts, where there is collateral. If you don’t make the car payments, they can take your car. The bottom layer of expenses are the unsecured debts, such as credit cards or loans. If there is not enough to go around, these just do not get paid.
Take Steps
Just stop paying. It’s very hard to just stop paying on debts but it might be necessary. It’s called a strategic default. You are defaulting on unsecured debts so you can afford your basic living expenses. An experienced bankruptcy attorney such as myself can help you evaluate your situation and guide you through the steps while helping to deal with the fallout from creditors.
Decide on Your Plan
You have options. Chapter 7 or chapter 13 bankruptcy might be right for you, but sometimes they can create problems. Often, a non-bankruptcy plan offers the best result.
Call or contact me to discuss ALL of your options.
