What To Do Before Considering Bankruptcy

There is a staggering amount of Americans who are choosing to file for bankruptcy. Many of these people have exhausted all their financial options before filing, while others may have been able to do more. Here are some things to consider before filing for bankruptcy.

1. Start prioritizing your bills. What are the most important things to pay and what are the least important things? Food, shelter, transportation and basic utilities are needs while paying off credit cards isn’t. Start prioritizing your bills so you can keep on top of the things that are most important.


 2. Look closely at your budget. Where is your money going? Are there any items that you can cut? Do you have any lifestyle changes that you can make? Do you really need that expensive smart phone data plan on your phone, or the cable subscription to watch your basketball games?

3. Have you looked in to any alternative options, such as debt settlement programs? There aren’t many good options for people who don’t have an income, but a lowered payment plan or loan modification might be a good alternative than simply not being able to pay the minimum payment at all.

4. Paying off extreme debt won’t happen overnight. There’s a reason they say that debt is bondage. It won’t be able to be shed easily. Avoid any scam deals that promise quick debt-free options. These are scams and more often-than-not end up making your debt worse than it already is.

5. Brainstorm with others what you can do about your current financial problems. Talk to professional counselors, friends, associates, and anyone you feel comfortable speaking to. There might be alternative options that you have never considered before simply because you did not know about it.

6. Cut expenses again and live more modestly. Usually the first time we go through the budget we limit things such as cable TV subscriptions, but if all else fails you can cut and make even more changes in your budget. This is a drastic change, such as selling off your house or your car, getting rid of all your family’s extra cell phone lines, etc. Think of anything that is not a NEED and get rid of it. Your family needs 4 walls and a roof, but doesn’t necessarily need 5 bedrooms. Cutting expenses can free up more money for you to put towards more bills and debt.

7. Trust your instincts. If your instincts tell you that you can fight and get out of extreme debt, don’t give up. Fight to pay it off with all you have. If you know there are no other options, however, follow your gut and file for bankruptcy. A bankruptcy attorney is there to help you get a fresh start.