If you have suffered an overwhelming financial hardship, you may be starting to weigh whether filing for bankruptcy is a viable alternative to the mounting piles of bills or the harassing creditor phone calls. Bankruptcy is a good choice for many who need a fresh start or want to consolidate their bills and be allowed to pay them back over the period of a few years. Here are a few questions to ask yourself as you begin your research into types of bankruptcies and steps involved in the process.
- Have you explored all your options? In other words, in your investigation of filing for bankruptcy, have you examined credit counseling if credit card bills are the problem? Or have you looked into refinancing your mortgage, reworked your budget, or explored a debt management plan? Find out all you can before filling out Chapter 7 or 13 bankruptcy forms. Our office can help you decide if one of these options is better for you than the other by looking at your bills, spending habits, and income.
- Are you prepared to change your habits? Filing for bankruptcy means examining your spending habits and where you need to cut back. Having bills consolidated or discharged in a bankruptcy hearing is great, but if the spending is not curbed or the income is not increased, this problem may occur again.
- Will you be eligible for bankruptcy? In order to have a court accept your filing for Chapter 7, you must pass a means test. The means test is a way for the courts to determine whether you are unable to repay your debts. The calculation is based upon your monthly qualifying income, your regular expenses, and deductions.
- Are you prepared to have bankruptcy follow you for a while? When debtors file for bankruptcy they are sometimes unaware that it will stay on their credit report for years to come, in some cases up to ten years. This means that if you plan to buy a home or car in the near future, you may end up paying a much higher interest rate or possibly not qualify at all.
- Which bankruptcy may be right for me? Chapter 7 and 13 bankruptcy are fundamentally different in that one discharges your debt and one allows you to reduce your debt and repay it. Do your homework and find out if you qualify for one over the other. If you have questions about which might be right for your specific circumstances contact the Law Office of Barry R. Levine today by phone at 978-922-8440, or visit our website at http://levinelawoffice.com.