Is Bankruptcy Right For You? Here’s How To Know.


Declaring bankruptcy may seem like an easy way to get out of debt, but there are significant implications that you should be considered before filing. Here are some ideas to help you decide if bankruptcy is the right decision for you.

Alternatives Exhausted

Bankruptcy filing should really be a last resort, so before contacting a bankruptcy lawyer in Las Vegas NV, you’ll want to see if any better alternatives can help you relieve your debts. Exhaust everything on this list before resorting to bankruptcy:

* Get an accurate financial picture. Map out exactly how much you earn, what savings you have, and how much you owe. Many community organizations often free services to help you clean up a messy financial situation.

* Cut expenses. Look for every possible way to reduce your expenses. Can you skip eating out as often or all together? Do you spend money on unnecessary things? Can you use public transportation instead of a car? Can you find a roommate or move in with family to reduce housing expenses?

* Increase income. Can you take on a second job or find ways to supplement your income? Do you own things of value that you can sell and put that money toward debt?

* Talk with creditors. Most financial institutions would rather help you refinance your loan than to discharge it through a bankruptcy filing. See if you can consolidate high-interest debt from credit cards into a lower interest loan that you can afford. Consider refinancing a mortgage to reduce your monthly payments.

* Consider borrowing from yourself. If you happen to have a retirement fund, consider taking out a loan to pay down your debt and then pay yourself back. In that way, the interest the loan accrues simply goes back into your retirement fund as you return the money. Be disciplined about using this solution.

Balance of Assets and Unsecured Debt

The bottom line is that if the value of your unsecured debts, including things like credit cards and personal loans, significantly outweigh the value of your assets, you are technically eligible to declare bankruptcy. If you have tried every alternative and cannot find a way to get out of debt, declaring bankruptcy may be a way to erase the slate and get a fresh start.

Housing Considerations

Before declaring bankruptcy, you’ll want to consider what that means for your housing situation. In some cases, you may be allowed to keep your home. In other cases, you might need to sell the house to pay creditors. Some rental agreements may not allow you to continue renting if you are bankrupt, and it may be challenging to find a new lodging solution if you file for bankruptcy.

Credit Implications

If you declare bankruptcy, it will remain on your credit record for 10 years, which will make it difficult to borrow money to fund a business or buy a house. Be sure you’re willing to make the lifestyle changes necessary to live without credit while changing your behavior to improve your credit rating over time. There’s no point in making such sacrifices to start over if you’re headed down the same spending path as before.

If you see bankruptcy as the best option for you, contact a bankruptcy lawyer Las Vegas NV for professional counsel to move forward.

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