_
Going for Broke
_On occasion, people who are toying with the idea of bankruptcy simply decide it’s their only option, before seriously considering the implications behind it. Before you allow a permanent and major flaw that will prevent you from accessing credit for years to come, seriously consider whether or not this is the right step for you.
Know the Implications
Filing bankruptcy is a serious decision that can seriously affect your credit. If you file Chapter 13 bankruptcy, you are looking at a record that lasts for thirteen years. Filing Chapter 7 is less arduous, with the bankruptcy flaw only glaring from seven to ten years.
Also, don’t forget bankruptcy is public knowledge. If you file, it will be possible for anyone to obtain that information if they’re looking.
Ask for Help
If you have a financial lifeline available, now is the time to grab it. This includes asking for help from your family, your friends or even your employer, in the form of a salary advance.
Note: If you get help from your family and friends, treat this interaction solely as business. Write up a formal loan agreement and have a notary witness and sign it. Be prepared for your family and friends to cash in on your claim if you default and be gracious in accepting any help they are willing to offer.
Speak with a Financial Advisor
Get recommendations before meeting with just anyone. Try to avoid companies with flashy commercials and promises to clean up your debt forever (flashing lights, cheesy smile). These companies, although well versed in managing debt, are out to make a major buck off of your problem.
Take Action
Bankruptcy should only be considered as a last resort, so it’s important to determine if you’ve really done all you can to save yourself from bankruptcy.
Have you…
Know the Implications
Filing bankruptcy is a serious decision that can seriously affect your credit. If you file Chapter 13 bankruptcy, you are looking at a record that lasts for thirteen years. Filing Chapter 7 is less arduous, with the bankruptcy flaw only glaring from seven to ten years.
Also, don’t forget bankruptcy is public knowledge. If you file, it will be possible for anyone to obtain that information if they’re looking.
Ask for Help
If you have a financial lifeline available, now is the time to grab it. This includes asking for help from your family, your friends or even your employer, in the form of a salary advance.
Note: If you get help from your family and friends, treat this interaction solely as business. Write up a formal loan agreement and have a notary witness and sign it. Be prepared for your family and friends to cash in on your claim if you default and be gracious in accepting any help they are willing to offer.
Speak with a Financial Advisor
Get recommendations before meeting with just anyone. Try to avoid companies with flashy commercials and promises to clean up your debt forever (flashing lights, cheesy smile). These companies, although well versed in managing debt, are out to make a major buck off of your problem.
Take Action
Bankruptcy should only be considered as a last resort, so it’s important to determine if you’ve really done all you can to save yourself from bankruptcy.
Have you…
- Asked your credit card company how they can help? Many credit cards offer distressed programs, for people who find themselves unable to cover their minimum payment but are still willing to pay off their debt.
- Tried to lower your overhead? Renting out a room in your house, moving in with your parents or finding a less costly option to rent are all ways to save money you could put towards your debt.
- Looked for more money? Consider taking on a part-time job in addition to your current responsibilities. It won’t be easy but it’s a better alternative than staying in the hole.
- Sold off some of your assets? If you own your car, sell it off. Taking the bus or riding a bicycle is an everyday occurrence for some people, so roughing it for awhile is better than having a bankruptcy on your record. Still owe on your vehicle? Find someone to take the car and cover your loans.
- When debt is involved, the worst thing to do is to do nothing. Doing nothing will only cause your situation to snowball and get worse. Congratulate yourself for taking those first steps to do something – now go out there and do it!