When Roderick Simmons, a 35 year old nurse found himself facing credit card debt and medical bills that added up to $72,000, he tried credit counseling. but it wasn’t enough. So he made the hard decision to file bankruptcy. And guess what? Within two years, he had rebuilt his credit to the point that he was able to qualify for an unsecured credit card with a decent interest rate. Today, five years later, Simmons says filing for bankruptcy gave him the fresh start he needed. Roderick Simmons’ experiences give him a positive view of bankruptcy unlike that of fellow bankruptcy filer Dave Ramsey.
With the recession straining more and more household budgets, a growing number of Americans are making the same decision. The American Bankruptcy Institute reports that consumer bankruptcy filings increased 41 percent in March compared to the previous year, bringing the total number for the month to 121,413. “More people are coming to bankruptcy because they’ve exhausted all their other options,” says Carey Ebert, a Hurst, Texas-based bankruptcy attorney and president of the National Association of Consumer Bankruptcy Attorneys.
Filing bankruptcy isn’t the best option for everyone, but once your debt becomes unmanageable, then it’s time to consider bankruptcy as an option, despite the fact that the new bankruptcy law of 2005 made filing for bankruptcy more difficult—and more expensive. Here are 7 things to think about:
- Take a close look at your budget. Before filing for bankruptcy, consumers are required to take a credit counseling class that helps them examine their expenses and income. This gives people the chance to consider if there is a way to resolve their debt by making lifestyle changes or getting gifts from relatives.
- Pay the important stuff first. Be sure to make your house and car payments before your credit card payments. Many people make the mistake of paying their credit card bills first because credit card companies are so aggressive with their phone calls.
- Consider non-bankruptcy alternatives.
- Beware of scams. Steer clear of ads in newspapers or on the radio that promise to help you cut your debt in half for free. Con artists are looking for desperate people who can be taken advantage of.
- Consider your credit score. Bankruptcy can be reported on your credit report for up to 10 years under federal law but that doesn’t mean that you shouldn’t file for bankruptcy. Most people who are considering bankruptcy already have dings on their credit report including late payments, charge offs, garnishments, repossessions and foreclosures.
- If bankruptcy is what you need, don’t delay. Once you consider the other options and realize bankruptcy is right for you, then there’s no need to waste time second-guessing yourself.
- Get professional help. While you can file bankruptcy without a lawyer, it wouldn’t be a wise decision unless you are knowledgeable of bankruptcy law, rules and procedure. Bankruptcy is a complex and unforgiving area of law and mistakes can cost you dearly.
If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
Source: USNews.com
