Filing for bankruptcy is not a decision that should be taken lightly. Even when it feels like times are tough, you may still be deciding if bankruptcy is right for you. Bankruptcy should be used as a last resort, which is why you should evaluate your financial situation carefully before officially filing
Negotiate Your Debts
If you have debts that will be wiped away by filing for bankruptcy, some of your creditors will be left with nothing. You should always try to negotiate with creditors to see if you can make changes to the debts that you owe, because there options for not negotiating could leave them with nothing.
For example, a hospital bill is an unsecured debt, and the hospital would not receive any payment if you filed for bankruptcy. You may be able to negotiate a lower amount that you owe them, or establish a payment plan that can be slowly paid off over time.
Work With A Counseling Agency
It can be tough to wrap your mind around the amount of debt that you owe, especially if you feel like you are in over your head with bills. Thankfully, there are credit counseling agencies out there designed to help people out in that kind of situation. As long as you are honest about the debts that you have, they can help you create a plan for repaying your debts.
Credit counseling agencies can even negotiate with creditors on your behalf, using their experience to help lower your debts. A credit counseling agency can even help come up with a debt management plan, where you would pay a single entity that disperses the payment amongst your creditors.
Stop Paying Your Bills
It may seem strange, but you could be in a situation where it is advantageous to just stop paying your bills. If all your debts are unsecured, or you don't have any assets that can be used to secure your debts, you are considered judgment proof. Even if you are sued an ordered to pay your debts, there is no way for your creditors to collect.
Not paying a debt (with the exception of taxes or child support) is an offense that cannot be punished with jail time. You cannot have clothing, furnishings, food, social security income, unemployment income, or any benefits from public assistance taken away from you.
If you're unable to negotiate with your creditors or have enough assets where you are not judgment proof, it may be time to file for bankruptcy. Work with a bankruptcy attorney in your area, such as Curtis H. Hatfield Attorney At Law, to determine which method of bankruptcy is right for you depending on your financial situation.