Debt can begin to overwhelm your life to the point that you can't pay everything you need to on time. Once you are late with bills and collectors start to call, the stress of your declining credit score and constant harassment only makes the problem worse. Bankruptcy can help you gain control over your finances so that you can move forward financially and get back on top of your finances. Even if you have debt you can't write off, the unsecured debt you can discharge will help reduce the amount you have to pay monthly on your overall debt.
Filing for bankruptcy is not something you should just rush right into, as it is a big event to go through, but it can be a great solution for many people. If this is something you are thinking about doing, there are three things you will need to do before you file your paperwork for bankruptcy.
1. Look into alternative options for debt-relief
When you are considering bankruptcy, it is likely because you have major amounts of debt and you do not know how to get out of the debt you have.
If you and your spouse decide to get a divorce, it's important to know that both your assets and your debt are considered marital property. If you live in an equitable distribution state, you'll get your share of both depending on what is deemed fair, while a community property state will divide everything in half. When there is significant marital debt and you know you aren't going to be able to pay it back, some careful planning may help you if you decide to declare bankruptcy.
For some people, the worst part of bankruptcy is actually making the decision to file for it. But once that is done, you can heave a big sigh of relief—until you find out that you must also attend something called a "creditor's meeting." Being a bit disgruntled at this news is understandable; after all, who wants to meet with the people that you are including in your bankruptcy petition? Won't that be embarrassing?
Once you have chosen Chapter 13, you will need to commit to make your regular payments to ensure that creditors get at least some of what you owe them. Fortunately, there are some techniques you can use to make paying off Chapter 13 much easier.
To make sure that you do not default on your Chapter 13 bankruptcy, one option is to select payroll control. This is where the monthly payment for Chapter 13 is deducted straight from your paycheck.