Credit cards can be a savior in times of financial difficulty, and they can also turn into a nightmare in times of financial difficulty. When credit cards are used to sustain you and then you recover from your situation, you can pay the debt down but what happens when your financial situation does not improve and you are left with looming credit card debt that you cannot pay? Filing bankruptcy requires serious consideration as there are long term complications. A bankruptcy attorney should be consulted to help you determine your best course of action. Chapter 7 bankruptcies wipe out all of your unsecured debt while Chapter 13 will help you establish a repayment plan with low interest rates and reduced payments.
Stop charging anything to your credit cards if you plan on filing bankruptcy. Credit cards should not show charges in the three to six months preceding bankruptcy filing.
Consult a local bankruptcy attorney. Most will offer a free consultation. You can consult with more than one attorney.
Prepare a list of all income and all expenses. Include all living expenses, to include co-pays, doctor visits, pet care, food, clothing and gas. Gather all bills both current and outstanding.
Meet with the attorney at your scheduled time. She will evaluate your income versus your debt and advise you if you qualify for Chapter 7 or 13 bankruptcies. She will discuss the pros and cons of bankruptcy and answer any questions you may have.
Fill out the bankruptcy paperwork if you choose to proceed. Your attorney will take care filling out and filing the legal paperwork. You will need to review the legal paperwork and sign. Pay the attorney the required fees.
Refer all of your creditors to your attorney. Once you have retained your attorney and the bankruptcy proceedings are moving forward, your creditors are not allowed to contact you.
Attend a pre-bankruptcy class if required. The class will educate you in the bankruptcy process.
Show up to all court appearances scheduled by your attorney. The entire bankruptcy process should take between two to three months. Carefully review your bankruptcy discharge paperwork to ensure all accounts have been included and are discharged.
Many attorneys will offer a payment plan but will not file the case with the court until the final payment is received.
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