Most Americans today are sharing in the downturn of the economy. Some bury their head in the sand and don't acknowledge the problems they are facing. One day you just don't wake up without any money and say, I'm broke, what do I do now? People need to have some kind of accountability for their problems when it comes to finances. Living on your credit cards, tapping them out and not being able to pay them doesn't happen overnight. Playing the blame game doesn't fix the problem. When people start to see the signs of out of control financial problems with no possible solution, it's time to call a bankruptcy attorney.
If you wait until you're trying to figure out that there is a problem it's too late. If you're living paycheck to paycheck and your bank account is overdrawn or close to zero you probably should consider personal bankruptcy before it gets worse. Some people refuse to acknowledge there is a problem until a week before their house is being sold in foreclosure. Sometimes, all a person needs to do is look around and see what can be done to help the problem. If there is no way that that could ever be repaid it's time to see a bankruptcy attorney for consultation about personal bankruptcy. If the debt is payable, you should look into cutting the budget so you can afford to continue living. Obviously, if your home is in foreclosure and you haven't met your credit card payments in months, you need to be proactive and see if you qualify for bankruptcy to stop all this craziness.
Don't waste any time when it comes to your family's financial security. Figure out where you stand by writing everything down. Write down all your creditors and add up the debts that you owed to them. Next, figure out your entire household income and subtract your living expenses. Always make sure that you separate your debts from your living expenses. Living expenses are the necessities like food, electricity, rent or a mortgage and whatever you need for healthcare. Now, see if you can even afford to pay the debts. If you get this far and you're already upside down, you are back to the bankruptcy attorney consultation again.
Once you know your bottom line, figure out if there is anything of value that you could sell that would help your situation. If you own your home and have equity in it, you might consider selling it. Although, you need a place to live, and another thing to consider is if you sell it would you be able to rent something for less than what you're spending on the mortgage payment. Always take a look at the overall picture and don't focus on one item. Depending on your financial situation, filing bankruptcy might be the way to stop the creditors and give you the breathing room you need to figure this out. Depending on what you come up with there are two basic chapters of personal bankruptcy. If the debtor has a large amount of unsecured debt and not a lot of property to protect, they would want to file Chapter 7 bankruptcy. On the other hand, if the debtor has a house with a lot of equity and other property they want to protect, a Chapter 13 bankruptcy would be in order. A Chapter 13 will basically allow the debtor to reorganize their finances with a negotiated 3 to 5 year repayment plan. Having debt problems is no fun, facing them head-on will alleviate the pain much quicker. It's like when your mom would pull a Band-Aid off you, ripping it off quickly makes it only hurt for a few minutes. Always consult a personal bankruptcy attorney to see if Chapter 7 or Chapter 13 bankruptcy is in your best interest.
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