What to do when you are swimming in debts?

Your debts are excessive and far exceed your income. You are either behind on your mortgage payments or can barely pay it and struggling with it all the time. You have not made a credit card payments in last so many months, or car payments, and the collectors are calling you nonstop in all parts of day and of course in the evening. They are also writing aggressive collection letters. Should you file for bankruptcy? What should you do? You are not alone: many Americans find themselves in a similar situation. The callers keep calling but the debts keep growing.

Bankruptcy is one of the alternatives available for relieving financial distress, but it is one of a very serious legal step with long standing consequences. Before you take the steps of filing for bankruptcy and how it works, explore other options with a credit counselor, and decide which course of action is best for you. Of course in such situation would call these collectors and try to work out some solutions. These collectors are out there to make money out of your miseries and of course collection is a big business. Question is that you cannot afford to pay and this nonpayment had brought you to this situation in the first place.

As usual, bankruptcy is not for everyone, and one should consider seriously the pros and cons before filing for bankruptcy. On this blog, we have innumerable articles posted which would differentiate the difference between both chapter 7 and chapter 13, and you can educate yourself and in discussion with your attorney. If you ultimately decide to seek relief in bankruptcy, you should hire a lawyer who is familiar with the federal bankruptcy laws. Given the new laws, and the concurrent changes, you will need an attorney who has stayed abreast with current and complicated changes and the complex paperwork. Please keep in mind that, since the new laws and amendments are more complicated and imposes new duties on lawyers, it is imperative that you should seek the help of a very knowledgeable attorney who is accessible to your needs and listen and considers your overall situation.

Are you a judgment proof person?
If you are, you do not need to file bankruptcy to protect your property and wages. Judgment proof simply means that you have so little money, income, and property that you would be unable to pay a court judgment entered against you. In addition, under state and federal exemptions laws, creditors are not allowed to seize certain income from judgment proof debtors, such as Social Security income, wages below certain levels, and certain personal property. If there is no point in creditor are going after you in court, there may be less reason for you to declare bankruptcy. If you believe that you may be judgment proof, discuss your situation with a credit counselor or of course a very knowledgeable attorney.

Bankruptcy is a serious matter and should be utilized as a last resort for serious debt problems. The bankruptcy will be a matter of public record meaning that a record of the filing will be available for everyone to find if they want to know about it, including neighbors, mortgage companies, landlords, and future employers. If you file a chapter 13 case, your credit cards should be torn up and will no longer be available to you. In chapter 7, you may be allowed to keep a credit card that has a zero balance, or one that you agree to reaffirm (continue to pay after the filing. You also need to pay your monthly bills as they occur. An employer is not allowed to discriminate against you for filing bankruptcy, but keep in mind that bankruptcy may nonetheless impact your employer in situations where financial stability is an issues for example, if you seek to attain new position or license. The record of bankruptcy stays for up to 8 years. Eight years is a long time in our current economic systems. Also, you need to know the various forms of bankruptcy. You should not wait until the last-minute to seek help.


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