Bankruptcy Advice: Should I File Bankruptcy For My Unsecured Debts?

No one wakes up in the morning and states, today is the perfect day finally ask for bankruptcy advice from a lawyer. However, recognizing when it’s time to ask for professional help is sometimes difficult, as those who file for bankruptcy are so used to worrying only about cash. This makes bankruptcy advice for your financial future extremely important.

When you file for bankruptcy protection, you are declaring that you can no longer afford your monthly debt payments. To do this, you will be entering into a contract with a bankruptcy lawyer that details exactly how your unsecured debts will be reduced or eliminated entirely. While the specific details may vary, the basic principle behind bankruptcy advice is that you have too much debt – you are swimming in debt. The last thing you want to do is drown under debt.

You should understand what type of bankruptcy advice you should get before you file bankruptcy. Some options include debt settlement (which involves repayment of outstanding debt at a lower rate), liquidation (which throws your remaining debts under one lender), or modification (which allows you to change your repayment plan in order to avoid bankruptcy). Although each of these may seem drastic, they can go a long way towards freeing up financial resources that otherwise would have been spent on debts you may not have been able to pay. In addition, there are other steps you can take to improve your financial outlook prior to filing bankruptcy. While filing bankruptcy will get rid of the debts you currently have, there are steps you can take to get your credit back on track and improve your credit rating in the long run.

Medical Bills – Many people are surprised to learn that one of the most common reasons for filing bankruptcy protection is because medical bills have skyrocketed. If you’ve been laid off or had your hours cut, it’s easy to see how this happens. With job loss and increased medical costs, your monthly budget may have suffered as well. In addition, many of your creditors will no longer be willing to work with you because you’re unable to pay off your existing debts. Before you file for bankruptcy, you need to decide if this is the right option for you.

Debts from Credit Cards – Most people file bankruptcy protection based on their unsecured debts. These debts generally consist of credit card bills that are owed to several different companies. When you have multiple credit cards and a large balance owing on each one, this becomes a significant barrier for debt relief. In addition, many credit card companies will only accept your application if you can prove that you’ll be able to make all of your monthly payments on time. In short, bankruptcy is a tool that helps people who have many debts against their name consolidate those debts. Although this is often helpful, it’s not really the best way to handle large amounts of credit card debt unless you have no choice.

Other Debts You Have – Many people don’t realize that not every bill they owe us a debt. If you don’t have any other outstanding bills, you should definitely consult with a bankruptcy attorney before you file bankruptcy. These could include things like child support obligations. Child support payments are considered unsecured debts and won’t be discharged if you file bankruptcy. As such, you might lose these services if you file for bankruptcy protection. Keep in mind that child support is usually considered a benefit you’re entitled to under state law.

Medical Bills – It’s not uncommon for people to have a wide range of medical bills. Depending on your age and state of living, some medical bills might be considered unsecured debts. Typically, though, bankruptcy isn’t a great choice for people with substantial medical bills. Instead, you should contact a bankruptcy attorney to discuss your options.

Unsecured debts are common when filing for bankruptcy. Therefore, it’s important to consult with an experienced bankruptcy attorney if you think filing for bankruptcy is the best option for you. He or she will be able to inform you about all of your options, and let you know whether or not you should file for bankruptcy protection. Keep in mind that there is a huge difference between unsecured debts and secured debts, especially in regard to child support. Because you’ll still be responsible for these obligations, it’s often a good idea to seek the advice of a lawyer who can explain the ins and outs of filing for bankruptcy.