3 Steps to Take Before You File for Bankruptcy

Are you thinking about filing for bankruptcy? Before you walk away from your current financial situation, there are a few things you need to know about the pros and cons surrounding bankruptcy.

Have you been thinking about filing for bankruptcy? If you've been feeling financially strapped, stressed, or anxious, you might be wondering if bankruptcy is the right option for you. When dealing with debt collectors becomes overwhelming and you can't seem to find a way out of your debt, bankruptcy may seem like a viable option. Each year, hundreds of thousands of people file for bankruptcy. While filing for bankruptcy may feel like a drastic and difficult option, it's important to remember that for many families, it is the best option; however, there are some drawbacks to filing for bankruptcy. The most significant one being the impact to your credit score. If you're already struggling to make minimum payments on your debts, however, your credit score might be the least of your concerns. In fact, many experts argue that a person's credit score could benefit from a bankruptcy filing in the long run.

Before you finalize your plans to file for bankruptcy, there are a few steps you can take.

1. Assess your current financial situation.

Make sure you consider your current financial situation. It's important to look at how much money you're bringing in compared to what your outstanding debts are. For some individuals, budgeting changes can make an incredible difference in how your personal finances look. For others, budgeting alone isn't enough. Compile a list of everything that you owe so you can determine exactly how deep in debt you are.

2. Talk with the financial department.

Did you know that many companies will work with you to create payment plans? Others will wipe away a portion of your debt in order to enable you to keep making payments. It's important to reach out to lenders you're working with to find out if they have any debt reduction options available for you. For example, some hospitals and medical centers will reduce your fees owed if you can demonstrate a financial hardship. Others are willing to work with you to create a payment plan.

3. Meet with an attorney.

It's always important to consult with an attorney about your financial status before you decide to declare bankruptcy. An attorney can evaluate your financial situation and help you decide whether bankruptcy is the right choice for you. Even if you do opt to file for bankruptcy, you'll still have some decisions to make. There are different types of bankruptcy options available, so talk with an attorney about which choice will work best for your lifestyle.

No matter what you're facing, it's important to take things one day at a time. Remember that you are not destined to be stuck in a lifetime of debt. In fact, there are many options you can take to help you move forward and break free. When you're ready to get started, talk with an experienced Miami bankruptcy attorney.