The creditors are calling, the past due notices clutter your mailbox and the financial stress has put undue pressure on your family relationships. Is it time to file bankruptcy?
Before you start the proceedings, first examine the answers to a few simple questions:
- Does the bulk of your financial burden consist of student loans?
- Are you anticipating additional debt in the near future; medical bills, legal expenses, income taxes?
- Has your income recently changed significantly?
- Have you tried consolidating your debt on your own?
- Have you been in contact with your creditors to work on payment plans?
Although making the decision to file for bankruptcy is not the end of the world, you do want to make sure that you make the decision with the right information. In the past, those who filed for bankruptcy were labeled with a stigma that just isn’t true today.
According to Melanie Lindner in the Forbes article, Should You Declare Bankruptcy? bankruptcy is a way to start over:
“The fact that you filed stays on your credit report for 10 years, but you can get credit again well within that time period. Your ability to do that depends on your pre-filing payment history, current income, debt-to-income ratio and how well you’ve paid your debts after the discharge.”
You are in control of much of the process; how much you can afford to pay, which creditors are part of the process, the distribution of your property and more. Bankruptcy allows you to decide when, if, and how much you will pay to their creditors. Indeed, there have been cases in our practice where our bankruptcy clients have paid back to their creditors the full amount of their claims after they have filed for bankruptcy.
You aren’t alone.
First, know that you are not the first to face this decision. Second, trust that there are those experienced in the process who can help weigh your options and determine your best course of action.
But First, Put it On Paper
Before you do anything, take time to write everything down on paper. Sometimes the ability to see it in black and white will help provide clarity.
- Gather all of your outstanding bills.
- Write down the monthly minimum and the total amount due.
- Make note of the interest rate you are currently paying.
- List the name and contact information of the creditor so that you won’t have to go searching later should you decide to contact them.
- Identify any debts are that one time charges versus those that are on-going expenses.
- Make sure you include in the list, bills that are a regular part of your life; utilities, rent, orthodontist fees, Netflix, cell phone, etc. The only way to examine a true picture of your finances is to include every dollar that leaves your wallet each month.
Once you have identified all of your expenses, list your income including additional amounts you might make dog sitting or from child support, craft sales or another way you have of making money each month. Remember to include online payments from eBay or Etsy sales or your Amazon affiliate programs. Every penny is worth recording.
Kiplinger, a Washington, D.C.-based publisher of business forecasts and personal finance advice, offers an online home budget form that can help if you prefer using your computer to keep track of the information. Their home budget format captures the basics of income and expenses and allows you to look at a month, quarter or a year at a time.
When you are ready for assistance with determining if it is time to file bankruptcy, give us a call 618-549-9800 or send us an email, [email protected] We are experienced, compassionate attorneys who are here to help you through the process.
Southern Illinois Bankruptcy Attorney law firm Bankruptcy Advocates is located in Carbondale and serves a wide geographic community. The first consultation is always free. Give us a call at 618-549-9800 or email us at [email protected] to speak about your case or legal matter. Convenient appointment times are available.