Financial difficulties can hit people the hardest. With bankruptcy being a viable way to get out of debt, many people turn to it when they feel it's impossible to dig themselves out of the financial hole they've gotten themselves into. Before you take the steps for filing for bankruptcy, use these tips to see if you can solve the problem on your own.
Deal With Your Debts
You may be frightened and embarrassed by your phone ringing, because it is most likely a creditor that wants the money that you owe them. While you're not required to take a phone call from a creditor, you can tell them about your financial situation and see what comes from it.
Make a list that has all the creditors you owe money to, and rank them by importance. One creditor you'll want to put at the top of the list will be the IRS, and then utilities, your mortgage, auto financing, medical bills, and credit cards. Contact each of them, either by phone or by writing, and see if they offer any sort of payment plan. For mortgages, you may even be able to request a forbearance plan to suspend payments until you get your finances in order.
You will find that when potentially faced with a bankruptcy filing, creditors are more willing to accept any form of payment than to not receive anything at all.
Get Your Finances In Order
Take a close look at any recurring monthly services you subscribe to, and get rid of them if they are not necessary. This includes your cable or satellite television service, Internet, and cell phones. If you need to keep services, reduce the bill to the bare minimum so that you can get by. Prioritize the income you have each month to pay for the things that are important. Prioritize food and then utilities like gas, electric, and water.
Know The Laws Concerning Utilities
Your gas or electric company will not shut off the utility during the winter if you use their service to heat your home. Contact the utility company and fill out the proper form to indicate that you are facing financial hardships. The same rules apply if you have a child in your home under 1 year old.
Know The Consequences
Not being able to pay a bill will not cause you to go to jail, with the one exception of tax bills owed to the IRS. Even so, the IRS can work with you to develop a payment plan and avoid bankruptcy.
Don't be afraid of contacting a creditor directly with the intentions of paying them back. If you are unable to do much about your financial situation, bankruptcy can always be used as a last resort. Work with a local bankruptcy attorney, such as John D Rouse, who can guide you through the process.
