Is Bankruptcy The Answer To Your Debt And Personal Finance

As unpleasant as most people find the idea, there are situations involving debt and personal finance that simply cannot be remedied through cost cutting and extra jobs. Perhaps your or your spouse has experienced a lengthy period of unemployment, or there have been huge medical bills to deal with. The mortgage company is threatening to foreclose on your home, the bank wants to repossess your car, and the phone rings non-stop from people calling to collect past due payments on your credit cards. No matter how hard you have tried, you have made little progress in solving your personal finance problems. In such scenarios, bankruptcy may be your best choice.

Before you decide, however, you might want to consult with a credit counseling service. These agencies can work with your creditors and usually get them to reduce or waive interest, cycle accounts to get them current, and get your payments reduced. Staff at these agencies is well versed in all areas of personal finance, and they can often find a solution to your debt problems that does not involve bankruptcy.

A credit counseling service will want you to make a serious commitment to getting your personal finances back on track and reducing your debt. You cannot just engage their services and then continue to make new charges. But they are often an excellent choice if your finances are out of control and you are drowning in debt.

Different agencies have different methods, but most have certain similarities. They will negotiate with all of your creditors and arrive at a total payment you will need to make to the agency each month. They will then disburse the funds according to the arrangements they made with your creditors. Some agencies charge a fee for handling your personal finances, but some local organizations provide similar services for free. Many agencies, especially the ones sponsored by non-profit organizations, will require you to attend a class or do coursework on personal finance and credit to help you prevent the problem from recurring.

If these agencies cannot help you with your personal finances, it may be time to consult with a bankruptcy attorney. He or she should offer a free initial consultation. You will need to bring complete records of who and how much you owe and how far behind you are. Do not try to conceal any debts or hide any income. Providing false information in a bankruptcy, such as concealing assets, is a criminal offense. The attorney will review your personal finance information and advise you on how to best proceed.

Normally, you will be able to keep your home and cars, provided you continue to make the payments on them, as well as your personal property. Certain dollar limitations do exist, but your attorney can advise you on them. They are quite liberal, and few consumers will approach these limits.