Declaring bankruptcy is not a decision to make lightly. It may offer you some financial relief and may even be necessary when you’re in severe debt, but it can drastically affect your credit score for up to ten years. In addition to hiring a bankruptcy attorney Howard County MD, you should be prepared to take the following steps before you file.
Look for Alternatives
Many people rush to bankruptcy as a solution before they are sure that they need to do so. There may be other alternatives that allow you to get out from under crippling debt while still protecting your credit score. Perhaps a friend or family member can loan you money to pay off your debts. If a loan is not an option, reach out to your creditors as soon as you realize you are not going to be able to make your payments. Ideally, you should do this before your accounts become delinquent, but even if you have missed a few payments, they may still be willing to work with you to get you back on track. If you dread doing this yourself, you can enlist credit counseling services to help you. They work with your creditors on your behalf to reduce your payments and maybe even the total amount you owe.
Halt Usage and Payments on Credit Accounts
If there are no other alternatives, bankruptcy can help you get a handle on your debt. Once you decide to file, however, you need to stop using your credit accounts. Racking up more debt after you have already filed may be considered fraud. Bankruptcy means your creditors can no longer collect from you, but they won’t go so far as to cancel payments you’ve already agreed to make. It’s important, therefore, to cancel any automatic payments you have set up.
Square Up Essentials
Filing for bankruptcy doesn’t always mean that your housing and electricity are secure. If you have any extra cash at all, put it toward unpaid rent or utilities. Even if your rental debt is erased, that doesn’t necessarily stop your landlord from evicting you for lack of payment. Catching up with your utilities before filing can keep you from having to pay a large deposit when you do get back on track.
When you are in severe financial trouble with no conceivable way to get out of it, filing for bankruptcy can restore some stability to your life and help you get out of debt. These tips and your attorney’s advice may be able to provide you with strategies for making the process go as smoothly as possible.