The economy today is in a poor state for several years now. The cycle of a tough economy leads to people losing jobs and falling into uncontrollable debt. Debts can result in filing for bankruptcy, an outcome nobody ever wants.
You shouldn’t dip into your retirement savings unless the situation calls for it. Although you may need to tap into your savings, ensure that you leave enough in your account for emergencies.
Always be honest with the information you give about your bankruptcy petition.
Don’t pay for the consultation and ask him or her anything you want to know. Most attorneys offer free initial consultations, so consult with a few before settling on one. Only make a decision after you feel like your concerns and questions were answered. You do not have to make your decision right after this consultation. You have lots of time for consulting with different lawyers.
Before you decide to declare bankruptcy, be sure you’ve weighed other options. If your debts are really not overwhelming, you can join a counseling program or straighten your finances out by yourself. You might also be able to negotiate lower payments yourself, but be sure to get any debt agreements in writing.
Be certain that you know how Chapter 7 and Chapter 13 differ. Chapter 7 bankruptcy completely wipes out your debts for good. You will no longer be liable for any money that you have with your creditors. Chapter 13 bankruptcy though will make you work out a five year repayment plan to eliminate all your debts.
Understand the differences between Chapter 7 and a Chapter 13 bankruptcy. Take the time to find out about each one online, and then figure out which one will be best for your particular situation. If you have trouble understanding the wealth of information, take the time to go over the specifics with your lawyer before making a decision on which type you will want to file.