For some people, bankruptcy is a positive idea. But filing for bankruptcy isn't something that should be done softly. There are many things to consider when deciding whether bankruptcy is a good idea for you. Other options should be considered before filing.
First, you should try speaking to your creditors to see if you may work something out with them. They may be willing to change the terms on your debt so that you are able to repay it more easily. Explain your position to them. If you have a good reason for having difficulty paying your bills, such as a reduction in salary, be sure to let them know.
If you have tried to work things out with your lenders with no success, credit counseling is the next step. You should start by taking a class that will satisfy the requirement for credit counseling that must be finished before filing for bankruptcy. You should take this class from an approved company in order for it to count. This class will give you a positive idea of what choices you have to help you refrain from bankruptcy.
In some cases, a credit counseling agency will have more success negotiating with your lenders than you did. This is something you should try if most of your debt is credit card debt. This type of debt is the kind credit counseling agencies normally have the most success with.
So when is bankruptcy a good idea? When all else has failed and you still cannot afford to pay the minimum payments on your debts each month. You are falling further and further behind every single month and lenders are calling every day, harassing you. Maybe you have even had one or more creditors take you to court and obtain a garnishment of your wages.
The positive news is that, although bankruptcy is the worst negative you could have on your credit, it won't destroy your life forever. Most individuals who have gone through bankruptcy are able to acquire financing to buy a house within two years. You could normally get OK'd for an unfortunate credit auto loan much more rapidly. Many dealers will finance the loan themselves just to make the sale. You can even get a credit card right after filing for bankruptcy if you are willing to put up a deposit for a secured card. However, if credit cards are what got you into trouble in the first place it might be a good idea to avoid them.
As soon as you file for bankruptcy, the harassing phone calls stop. It is against the law for creditors to continue trying to collect on a debt once they've been notified that you have filed for bankruptcy. You may still get calls for a few days after filling before the lenders get their signs. If so, just tell the caller that you have filed for bankruptcy and they have to stop calling.
