How Do I Know if Bankruptcy Is Right for Me?
Bankruptcy might be the best way to escape unmanageable debt and start fresh.
If you are struggling with unmanageable debt, chances are good that you've at least considered filing for bankruptcy. Whether bankruptcy is the best option for your unique financial situation depends on many factors, including:
Have You Considered Non-Bankruptcy Options?
Though bankruptcy is very effective at discharging unsecured debt and allowing you freedom from creditor harassment and collection efforts, it isn't a "quick fix," and it shouldn't be your first choice. Before taking the drastic step of filing for bankruptcy under Chapter 7 or Chapter 13, you should try other debt relief methods first. These may include:
- Working with creditors to temporarily lower payments
- Asking for a delay in collection efforts until you can pay the bill
- Negotiating a lower pay-off amount if you can pay a lump sum
If you have the option of using up your savings to pay down debt, borrowing against a retirement plan or IRA, or even taking out a low-interest loan from a friend or relative, you might consider these as well before bankruptcy.One important note: if you think you'll be able to pay the debt eventually but can't pay it in the timeframe requested by a debt collector and need the harassment to stop, don't automatically assume that you need to file bankruptcy to halt collection efforts. While it's true that bankruptcy's "automatic stay" does indeed force debt collectors and creditors to stop contacting you, there are easier ways to make harassing phone calls, letters and legal actions stop, including sending a letter to the creditors requesting that they not contact you again or even hiring an attorney to pursue a claim under the Fair Debt Collection Practices Act.
When Bankruptcy is Best
If you've decided that bankruptcy is indeed the best option for your unique financial situation, move forward with the help of a skilled bankruptcy attorney. Having an attorney at your side will better prepare you for the process and ensure that things are done correctly. For more information about various bankruptcy options and how to get started, contact the Austin office of Hickson Law, PC. Call them today at 512-346-8597 or send an email.