The average American family owes $8,377 according to CNBC. The average credit card debt has risen 6% in the last year, and debt rates are set to rival those of the Great Recession. With the amount of debt present in the average family—it’s no doubt that many people are filing for bankruptcy. You are not alone, and there is no shame in it. Unfortunately, bankruptcy is a scary term and considered taboo to discuss by many. That is why were are here today to offer you some helpful tips to survive this process.
If possible, consult a lawyer before filing.
There are a few different ways to file for bankruptcy, so you want to ensure you choose the method that is best for your situation.However, we realize that may be beyond your means right now.
What type of bankruptcy do I file for?
Two of the most common types of bankruptcy are Chapter 7 and Chapter 13.
One of the most common categories of bankruptcy filed for is Chapter 7 bankruptcy. This type of bankruptcy liquidates your assets in order to pay off as much of your debt as possible. Your bankruptcy will stay on your credit report for ten years. This offers a fresh start. However, if you own property or a company, and you are unwilling to part with it, this may not be your best option.
Chapter 13 bankruptcy may be a better option if you own property. This category of bankruptcy allows the filer to pay off their debts over 3-5 years. Any debts remaining after that “grace period” is over are discharged.
So What’s Next?
- When filing for bankruptcy, be scrupulously detailed with your paperwork. Mistakes or omissions could cost your case to be thrown away.
- Be sure to propose a payment plan you can afford. This is incredibly important in order for your bankruptcy to remain in good standing. If your income changes, contact your lawyer as modifications may be able to be made.
- Once you’ve gone through bankruptcy, it may be difficult to get a loan or credit card for a while—and even if you do, the interest rates may be sky high.
After Bankruptcy (Or During Chapter 13 Bankruptcy)
- Try to live frugally. This can be hard to adjust to, but many people have found greater levels of happiness living within their means, or even adapting to a minimalistic lifestyle. Do you need cable?
- Budget! Especially if you are in the process of making payments on a Chapter 13 bankruptcy, this is important. Can you reduce the amount you spend on any of your necessities (i.e. rent, phone bill, internet)? Track your spending. What areas is money going that it doesn’t need to?
- For the times that you need to spend money—find the inexpensive options! This can mean going to thrift stores, outlet malls, or finding the best deals online. This Ltdcommodities.com coupon is a great option to find affordable home goods and gifts without increasing your debt beyond your means.
Bankruptcy can be scary—but it can also be a fresh start. If possible, remember to consult an attorney. Good luck!]]>