If you believe you are in over your head financially, and that bankruptcy is the only option for you, there are a number of issues you should sit down and consider. In addition, there are some actions you should take to protect yourself.
Is bankruptcy right for you? First, consider whether bankruptcy is really the right option for you. Bankruptcy should be considered a last resort. It takes a long time and can be emotionally exhausting. It will damage your credit score and may hurt your employment prospects and other aspects of your life in the future. However, for many people it’s the best option. You should consider all of your options. Is it possible for you to pay off your debts with a second job in a year or two? Have you talked to your creditors about lowering your interest rate or giving you better terms? Can you work on your budget and figure out a way out?
Also, even if you are in over your head with no foreseeable way out, bankruptcy may not be a good option. Student loans, tax debts, alimony, child support, and some other debts are not dischargeable in bankruptcy. If those make up the bulk of your debts, bankruptcy will not help.
Gather your paperwork. If you have determined that bankruptcy is the right option for you, you will need to start gathering documents. Your attorney can tell you which documents are needed, but in general you need records of your debts, including credit card bills, student loan statements, unpaid medical bills, etc. You will also need documentation of your assets and your monthly income.
Do not behave badly. Normally, in a bankruptcy you will lose a number of assets. Do not transfer assets to your friends or family in order to keep them. If discovered, you likely will lose the property and the right to file bankruptcy. Do not start charging up your credit cards – if you do that with the intent of discharging the debt, the debt is not dischargeable. You should also not destroy any business records or financial records. That can cause you to lose the right to file bankruptcy.
Choose which creditors to pay. In the period before a bankruptcy, it’s important to carefully choose which creditors to pay. In most cases, you will continue to pay your rent or mortgage, some utilities, your car payment, and some other debts. However, if you choose to pay a creditor on a debt that will be discharged, you may be wasting your money. Your bankruptcy attorney can advise you on which debts to pay.
If you are considering filing for bankruptcy in Atlanta, call the Atlanta bankruptcy attorneys at Holston & Huntley. Call us today- consultations are free and you are under no obligation to use our services. We serve Metro Atlanta Georgia as well as Birmingham Alabama including surrounding areas.