Filing bankruptcy is considered by many as a great way to get debt relief. However, it is important for you to understand that filing bankruptcy is not an option but the last thing that you are forced to do. Nobody likes to file for bankruptcy just because they wanted to. When an individual or business lose control over their finances don’t have the available means and assets to pay off the debt, do they start thinking about filing bankruptcy. This is done so that the debts of the creditors could be paid off and they could get the much desired debt relief and the eventual peace of mind. This article must not be treated as a legal advice, but the following information will help you understand your financial situation better, so that you could decide whether filing bankruptcy in the current situation is the right thing for you.
Assess Your Per-Month Expenses
Before you proceed for filing bankruptcy, the first and most important thing that you need to do is to assess all your per-month expenses. You need to do this in a proper manner covering all the small and big expenses; therefore, it is better if you start by making an extensive list for the same. Your mortgage or other rental payments must get the priority in this regard, following the car payment and other such expenses. Here, you should note that you do not have to include the amount of loans and credit card dues. You just have to add all those expenses that you cannot live without.
Assess The Available Means And Assets
Now, the next big thing after filing bankruptcy that you have to do is to assess the available means and assets that you have. You need to assess, if there will be some money left after making payments for all the necessary monthly expenses. Your objective is to calculate if the remaining money is sufficient to pay off the regular installments of the various loans and credit card. If there is a deficit, you should calculate the amount of the deficit.
Talking With The Creditors
If you find that you will have enough money left with you to pay off all the loan installments, your problem is solved then and there. All you have to do is, be organized and manage your finances wisely. However, if the money left is not sufficient to pay off the loans, you should first try to talk with your creditors and ask them to extend the loan tenure or reduce the amount of interest. In usual circumstances, if your case is genuine, the creditors do not mind extending the loan tenure and decreasing the amount of monthly installments.
Filing bankruptcy is a situation you should think of, when you do not have funds to support even your day-to-day expenses.