Filing for bankruptcy is never an easy decision to come to.  Most of us see it as a last resort to all of our financial troubles and the coward’s way out.  This is absolutely untrue.  Bankruptcy is nothing to be ashamed of and it happens more often than you know.  Approximately 1 out of every 212 people in the United States files for non-business related bankruptcy (Chapter 7 or Chapter 13) every year.  The important thing is to understand the facts about bankruptcy.  Getting information from a licensed attorney is your best option, as they are up to date on the court’s fees and policies.  Below are a few tips to help you decide if bankruptcy is right for you!

You can choose the best way for your debt to be handled.

If you file for Chapter 13, you play an integral role in determining how you will pay off your debt. You will help design a payment plan that works for you, and thus you have a lot of choice about the way your bankruptcy plays out. Even with Chapter 7, you and your attorney can negotiate with creditors to find a way to fit your needs. Chapter 7 and Chapter 13 bankruptcies can be complicated, however, so it is highly recommended that you consult a bankruptcy attorney before filing either type.

Many debt settlement firms can actually do more harm than good.

Most are unregulated, for-profit, and require regular payments before even helping the debtor. Because they are getting fees every month, they have little incentive to settle with creditors quickly. I recommend being very wary of debt settlement firms.

Timing is very important, and when you owe more than you own, it’s time to talk to a lawyer.

It does not mean that bankruptcy is the next step. As counter-intuitive as it may seem, it is sometimes best to wait until you think the worst is over. Otherwise you may file prematurely and acquire more debt that will not be included in the bankruptcy discharge. For example, if you are facing hospitalization you may want to wait to file until that’s behind you. However, there are other situations where it is better to file sooner rather than later. Legal advice can help you find the correct timing.

It does not have to be the end of the world.

An important part of coping is for debtors to acknowledge the normal feelings of depression, fear, and anger that come with filing for bankruptcy, and to make sure to reach out to support networks. The stigma that comes with bankruptcy has been lessened as it becomes more widespread and accepted. Often times filers come out stronger than they expected.

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