Credit cards can certainly be a savior during times of difficulty but when you misuse them, they can also become nasty little debt generators. Credit card debt can become a nightmare and this will snatch away your peace of mind and make you spend sleepless nights. When someone incurs credit card debt and he feels that it is impossible for him to repay the entire amount, he thinks of filing bankruptcy. Bankruptcy can sometimes give you a fresh financial start but when you see the negative impacts of bankruptcy, you will see that they’re too far-reaching. Have a look at the ways in which you can file bankruptcy and get out of the debt mess.
- Stop charging further on your credit cards: The first step that you have to take is to stop charging any further amount on your credit cards when you’re already filing bankruptcy. The credit cards don’t show charges within 3-6 months preceding bankruptcy filing.
- Get in touch with a local bankruptcy attorney: As bankruptcy is a legal process that can become complicated due to ignorance, you might take resort to a local bankruptcy attorney. Although most bankruptcy attorneys will offer free consultation, you can even consult more than one attorney if you’re not satisfied with the advice.
- Prepare a list of income and expenses: The next step would be to prepare a list of all expenses which should include doctor visits, food costs, clothing costs, gas bills, co-pays and everything else. Both current and outstanding bills should be taken into account.
- Meet your attorney: The next step would be to meet your bankruptcy lawyer on the scheduled time and let him evaluate your income against your debt. They will also discuss the pros and cons of bankruptcy, whether Chapter 7 or Chapter 13 bankruptcy.
- Refer your creditors: You should refer your creditors to the bankruptcy attorney as the rest of the task will be done by the attorney on your behalf. The creditors won’t be allowed to contact you due to the ‘automatic stay’ and therefore you should let them speak to them.
- Go for counseling: Before you file for bankruptcy, you have to also go for pre-bankruptcy counseling. The counselor will assess and tell you whether or not this is the best option for you or whether you have any kind of bankruptcy alternatives.
Therefore, when you’re about to file bankruptcy, make sure you follow the above mentioned points. Don’t make a mistake during the entire process as this will boomerang you in the long run.