Declaring personal bankruptcy is not a simple task. It requires a great deal of thought as well as an in-depth understanding of the consequences. The first thing you need to do is discuss this with the experts – talk to a credit counselor or a bankruptcy lawyer. They will be able to tell you the pros and cons of declaring personal bankruptcy after assessing your financial situation.

Not everyone is eligible to bankruptcy under chapter 7. You will be subjected to a means test that will determine whether you will be able to clear a substantial percentage of your debt. If you can, then you will not be able to liquidate your debt. In such cases a repayment plan will be set in place and you will have to adhere to it. This will be under Chapter 13 of Bankruptcy. A lot will also depend on the kind of loan you have to repay.

Before you consider personal bankruptcy, you will need to look through the alternatives. Any one of them may work for you depending on the financial situation that you are in. seeking financial counseling in these matters would be a good idea. One of the options is to hire a finance manager. This will mean that you lose control over your own finances, but it is good way to bring them back on track. If you can discipline yourself, then hiring a financial counselor may work for you as well. Use his help in creating a budget for yourself.

Several creditors do come forward to work with debtors. With some persuasion you will be able to waive off some of the debt or the interest that has accumulated on it in exchange for making steady repayments. Bigger creditors know the problems associated with debt collection and the hassles with employing a debt collection agency. The litigation involved too can be time consuming.

Refinancing is also an option if you own a home. This can help you pay off debts that carry a high interest. You may also be able to offer it as collateral in order to secure funding at lower rates of interest that will you consolidate your debts, bring down the number of payments you make each month and possible get you some tax benefits.

No matter which option you take, make sure that you are dealing with reputed companies and individuals.

Brian Joneta also writes about Bankruptcy and Credit issues including Declaring Personal Bankruptcy and Bankruptcy Lawyer

Also read other articles at

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