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Considering Bankruptcy? You’re not alone.

Created: On April 28, 2009 @ 4:01 pm In

According to the [1] American Bankruptcy Institute, bankruptcy filings increased by 41 percent in March from the same period a year ago. There were 121,413 new consumer filings in March which represented a 24 percent increase from February.

If you are struggling with your consumer debt, you certainly are not alone. While many consumers may explore consumer credit counseling, [2] debt consolidation, or debt settlement first - bankruptcy may be an appropriate option for many. If you are considering bankruptcy, it’s important you consider the following:

  1. Prioritize. If you’re exploring bankruptcy, you are probably already having some difficulty meeting all of your monthly obligations. Many consumers will make paying their credit card bill a priority out of fear - they don’t want to deal with overly aggressive collection agents. This can often times come at the expense of making rent/housing payments or car payments. You must properly prioritize your payments to protect you and your family. Ensuring that your housing payment and car payment are paid before other debts is essential.
  2. Other Solutions. Bankruptcy is typically the last option most consumers explore. Prior to getting to that point, it often makes sense to look at debt consolidation, consumer credit counseling, and [3] debt settlement. All of these strategies require that you have regular income that can be utilized to pay off existing debt. If you are current unemployed or unable to pay for basic necessities, these options won’t be viable.
  3. Budgeting. Before you file for bankruptcy, you’ll be required to attend [4] credit counseling. You’ll receive some help in evaluating your current income and expenses. Essentially, you’ll be given the tools you need to determine if there are other resources available to help you avoid bankruptcy. For example, if you controlled your spending, would you be able to repay your debts in a reasonable amount of time? Do you have assets that you could sell to help pay off existing debt? Are there family members that could help you?
  4. Professional Help. If you decide bankruptcy is the best path for you, or would at least like to explore it further, it’s best to get professional help from an Attorney that specializes in consumer bankruptcy law. Many attorneys will offer a free consultation to help you understand your options. Fees vary based on level of experience, complexity of the bankruptcy, and your geography.
  5. Don’t wait. Once you’ve decided to move forward with bankruptcy, do not wait to hire an attorney. You will continue to accrue more debt through interest charges and late fees or penalties. You’ll subject yourself to unnecessary stress, aggressive collection agencies, and potential legal action by your creditors. The sooner you start, the sooner you can get your fresh start and begin to rebuild your financial life.

About Author:

Chris Rocks is the Regional Director of the National Credit Federation (NCF), a consumer advocacy group that assists small business owners and consumers overcome debt and credit challenges.

Article printed from DebtHelp.com Blog: http://www.debthelp.com/blog

URL to article: http://www.debthelp.com/blog/2009/04/28/considering-bankruptcy-youre-not-alone/

URLs in this post:
[1] American Bankruptcy Institute: http://www.abiworld.org/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENT
ID=57080

[2] debt consolidation: http://www.debthelp.com/debt-consolidation/loan.html
[3] debt settlement: http://www.debthelp.com/debt-consolidation/settlement.html
[4] credit counseling: http://www.debthelp.com/debt-consolidation/credit-counseling.html