If you’re young and independent, and you don’t have many assets such as a house or investments, bankruptcy can be a smart option for a fresh start if you have thousands of dollars in debt. The laws on bankruptcy are created to give people a second chance, so there should be no shame if you have to declare. Some people face either 10 to 15 years of repaying the debt or a clean slate in which to build savings and balance a budget.
Consult an Expert
Because bankruptcy is a legal proceeding, you will need a lawyer. If you’re struggling to make ends meet, you may need bankruptcy attorney Howard County MD. When you consult a legal expert, you will get a clear answer on if this option is possible. If your debt is largely due to high credit card balances and you rent an apartment, a Chapter 7 bankruptcy may be the way to go.
Once you meet with an attorney, you’ll have to provide a detailed list of all your credit card debt; immediately, you should stop receiving calls from creditors and collection agencies looking for payment. You’ll need to provide a list of all your expenses, your assets and your income. Your jewelry and any valuable collections count as assets. You’ll need to provide a snapshot of everything you own and what you make.
Avoid Large Purchases
It may be tempting to buy a nice handbag or furniture before your bankruptcy is finalized, but that is not a wise decision at all. You should also not wear any family heirlooms to court, as even an expensive gift can be considered an asset. Creditors may challenge a bankruptcy and cry fraud if you purchase something that is several hundred dollars within a few months of the court date.
Sometimes declaring bankruptcy is your best option for financial freedom.