Sometimes it is a difficult choice to file bankruptcy. While a declaration of bankruptcy gives applicants a second chance to better manage their finances, this decision must be made carefully.
Getting professional advice from legal experts is a good way to find out whether there is a need to file a bankruptcy or not.
Before filing bankruptcy, consider the following:
Asses your finicial situation:
The first step of assessing one’s financial situation is to gather all the bills to calculate the total expenditure. It is possible to neglect some extra bills if there is no regular practice of financial expenditure.
Putting all account information in one place is good for people to find out how much money people owe. When it comes to the worst scenario and a declaration of bankruptcy is necessary, Benenati Law Firm can be the solution to help file Chapter 13 Bankruptcy in accordance to the laws.
Requesting credit reports
Before making the decision to file bankruptcy, it is essential to be informed thoroughly about the credit reports. The American federal law entitles people to receive a free credit report every year.
There is an official website authorized by the federal government to check all credit bureaus. If an attorney is not a favorable option, credit counseling is also helpful to interpret the credit report.
Visualizing the debts
Being in debt is no big deal in a world where many people believe that taking out a loan is the solution to their problems, yet everyone needs to make sure they know about the details of the debts they have.
By making a chart to visualize the debts, one can understand how long it would take to clear the debts. Adding the creditors’ names in the chart allows bankruptcy applicants to know who the debt is owed to.
Make a budget plan for income and expenses
Creating a plan for one’s budget is essential. Although this can be a tedious task, keeping track of your finances regularly is highly recommended in order to be able to better manage income and expenditures. To calculate a person’s income, all expenses including transport, food and living costs must be taken into account.
When bankruptcy is filed, the applicant’s assets must be converted into cash as part of the consideration.
Looking for reputable counseling
The procedures matter as much as the results. A law consultancy firm with a good reputation is crucial for the American bankruptcy courts to approve the application and to ensure the legitimacy of the declaration of bankruptcy.
Although there are many American citizens who want to declare bankruptcy and begin a new financial cycle it is recommended to only use this option as a last resort to solve financial issues.