For many Americans, paying their bills becomes impossible at some point. They rely on their credit cards to get them through, and before they know it, their debt swallows them, and they’re forced to face the possibility of declaring bankruptcy. Nearly half of all Americans are in unmanageable debt, which makes it easy to understand how so many people wind up bankrupt.
Whether it’s a result of being served a judgment you can’t pay, expensive medical bills, or job loss, being forced to file for bankruptcy is often people’s only option.
However, before you file, it’s essential to know these things about bankruptcy.
Look Into a Debt Consolidation Plan
Before going down the road of bankruptcy, it’s prudent to explore whether a debt consolidation plan may work for you. It’s ideal to go over all of your options before you do something drastic, like file for bankruptcy. A debt consolidation plan can help unmanageable debt seem more manageable, and ultimately, save you from having to file for bankruptcy.
It may seem like your debt is impossible to conquer, but you’d be surprised how much you can change your situation by making sacrifices and finding creative ways to come up with the money. It’s worth considering first!
Know That Your Student Loans Won’t Disappear
Many people are under the impression that filing for bankruptcy will wipe away all of their money woes and bring them relief. However, something many people who have never filed for bankruptcy may not know is that it won’t get rid of your student loans.
Sadly for people with tens to hundreds of thousands in student loans, they are not able to be forgiven from bankruptcy status. Therefore, it’s prudent to know this before filing.
Some people who jump the gun realize too late that filing for bankruptcy didn’t do what they hoped it would.
You Shouldn’t Hide any Assets
Many people who are planning on filing for bankruptcy have it in their minds that the small number of assets they have they’ll still be able to hang on to. They often plan on hiding their assets before they file by transferring the money out of their accounts. However, you could get charged with criminal penalties.
The same goes for cashing out on your savings. It may seem like the smart thing to do; however, if you’re caught cashing out these funds, ask yourself if it’s worth being a convicted felon!
Talk To An Expert
Beyond following this advice, the importance of talking to an expert can not be stressed enough. An expert will be able to look at your unique circumstances and help you determine the best possible route based on your particular situation.