When your debt piles up so high that you can't see any way to get out of it, there are options open to you. One of them is to file for bankruptcy. When you file for bankruptcy, you are making an agreement with your creditors that you will pay back some portion of what you owe them. But what is the process of filing for bankruptcy like?
Pre-Filing Credit Counseling
A few years ago, Congress changed the laws around filing for bankruptcy. One of the things that was put into place was credit counseling. You will need to work with an approved credit counseling organization before you are able to file for bankruptcy. That needs to happen 180 days before you actually file for bankruptcy. There are a lot of things that the credit counseling organization can help you with. The counselor that you are working with will look at your entire financial picture. That means that you are going to have to tell them everything. It doesn't matter if you haven't told anyone else, the counselor won't judge you. They are there to help you. Tell them all your debt, and all your income. That includes child support, SNAP, AFDC, or anything that brings any money into your house. The counselor may also ask you to track your spending so that you know where all your money is going.
As part of your bankruptcy filing, you may be required to go to some money management classes. Those classes can be very helpful to you. At those classes you can get information about creating a realistic budget, setting up savings and retirement accounts, and how to build your credit history back up. Learning these things will help to keep you out of debt in the future. You may be going to those classes for a few weeks, but you will find that they will be helpful to you.
If you feel like you are out of options when it comes to debt, it is better to avoid things that might get you further into debt. Instead what you should do is consult with an attorney who deals with debt and bankruptcy. They can talk to you and tell you what your options are. When it comes time to do the actual filing, they will be able to do that and appear before the judge with you. The lawyer will make sure that you will have all the information you need to make a good decision.
For more information about debt, contact a lawyer like Deborah K Vincent Attorney at Law.