There is a difference between being broke and being truly broke. Broke means you spent too much this week and will have more money when your next paycheck comes in. Actually broke is when it doesn't matter how much your next check is, you're still behind and aren't able to get your head above water. If you lean more towards the truly broke, bankruptcy may be something you're considering. Before you file though, there are some things you should do. Read on for what to do before you file for bankruptcy.
Seek Out Credit Counseling
A credit counselor may be beneficial to you. You may have enough money to pay your bills; you just aren't budgeting your money properly. If this is the case, a credit counselor can help. Call around to find a credit counselor near you. It can still be good information even if you end up needing to file for bankruptcy.
Use A Credit Consolidation Company
A credit counselor may help you learn how to budget your money properly, but a credit consolidation company will help you actually pay your debts off. This type of company will take payments from you and then divvy them up to your creditors. They can negotiate lower payments to your creditors and negotiate lump-sum offers as well, or lower interest rates. You will be sending out one payment rather than several. This is a good option if you have a lot of credit card debt.
Figure Out Your Debt-To-Income Ratio
A lot of people live paycheck to paycheck, but if you can't afford your debts because you don't have enough income, paycheck to paycheck doesn't even matter. Make a list of your debts and then your income to see where that leaves you each month. If you're too far upside down, bankruptcy may be your best bet.
Try To Borrow Money
Borrowing money may not be something you want to do, but if it will prevent you from having to file for bankruptcy, then set aside your pride and borrow money to get you by. If borrowing is only going to get you by for another month or maybe two, don't bother borrowing the money. If you're going to end up in the same position you were in two months later, use what money you have to file bankruptcy instead.
Bankruptcy should be a last resort option, so do what you can before you actually file. If you're still in debt with no foreseeable end to your debt, make an appointment with a bankruptcy attorney so you can feel like you can breathe again. For more information, contact a law office like Martinez Law Firm.Share