Determining If You Should File For Bankruptcy

Managing your personal finances is critical when it comes to ensuring you have good credit. If you find yourself struggling to shoulder the weight of your debts, you may be considering bankruptcy as a tool to help you escape your mounting debt.

Preparing for the bankruptcy process can seem daunting, but there are some simple things you can do to ensure you are ready to file. Here are three tips you can use to help determine if you should file for bankruptcy in the future.

1. Take the time to assess your financial situation.

Before you file for bankruptcy, take the time to carefully look over your financial situation. Create a budget that eliminates all superfluous spending, then see if you have enough money coming in to begin paying back your debt.

If you are unable to tackle your debt effectively, then filing for bankruptcy could help you eliminate the debts that are negatively affecting your financial future so that you can begin rebuilding your credit over time.

2. Take a look at your credit reports.

Many consumers are unaware of the items that are being reported to the credit bureaus on their behalf. As you are trying to determine if you should file for bankruptcy, it can be beneficial to pull a copy of your credit reports.

Being able to see if open collections, judgments, or liens are having a negative effect on your credit will help you better determine if filing for bankruptcy will help you gain more control over your financial future.

3. Consult with a bankruptcy attorney.

As you prepare to file for bankruptcy, it can be helpful to consult with an experienced bankruptcy attorney. Many consumers are surprised to find that not all debts can be discharged in a bankruptcy. An attorney will be able to look over your finances with you to determine the type of debt having the most negative effect on your financial health.

If your debts are student loans, past-due taxes, or child support payments, then a bankruptcy might not be helpful. An experienced attorney will be able to help you discover options available to help you gain more control over your debt, and the attorney will be able to handle the preparation of your filing paperwork if you determine bankruptcy is your best option.

Determining if you should file for bankruptcy is a decision that shouldn't be taken lightly. Assess your financial situation, check your credit reports, and consult with an attorney, such as Lazaro Carvajal, to determine if filing for bankruptcy would be beneficial for you in the future.