No one thinks they are ever going to have to file for bankruptcy. No one ever wants to have to file. The unfortunate fact is that many people do find themselves in a position to need to file for bankruptcy. On average, more than 1.5 million people file for bankruptcy every year, according to United States bankruptcy court statistics. Approximately 62% of all personal bankruptcies in the U.S. are caused by medical debt, according to Harvard University. In terms of bankruptcy, the states who see the most of it are California, Florida, Illinois, Georgia and Ohio. In 2014, 97% of all bankruptcy filings were personal. If you find yourself considering this as an option, you should talk to a bankruptcy lawyer.
- Take a cold, hard look at your finances. Look at what you have in the bank and what all of your expenses are. You need an honest look at how much you have to spend, how much you have coming in and how much you owe. For many people, this is a painful experience. No one really enjoys looking at their debt but if you are going to be serious about improving your credit score and situation, you have to take a look at your finances and be honest about it.
- Get your credit score. There are a number of reputable sites where you can pull your full credit report. This will give you a really thorough assessment of your debts. Just because you have not heard from certain creditors does not mean those debts are not still on your record. You might also find things on your report that are false and you can fight with the help of a lawyer. You just need to know where you stand with your credit. You can also get a full list of your creditors for your bankruptcy filing. If you leave any creditors off of your filing, it will cost you problems later. In fact, omitting creditors on your bankruptcy filing can have everything thrown out completely, leaving you in a worse position than when you started.
- Talk to some bankruptcy lawyers. You need a good bankruptcy lawyer if you want to succeed with this process. You need a lawyer who is experienced in this kind of case. A bankruptcy case is different from other things you might need from a law firm so you should talk to a few lawyers to see who you want to hire. You should be comfortable with the lawyer that you pick.
- Hire a lawyer. You have talked to some lawyers but are not convinced that you need one. Put those thoughts aside. You need a lawyer. With a lawyer, the success rate for chapter 7 bankruptcies is 95%. This is an incredibly complicated process. Even experts have a hard time keeping up with the rules and regulations. The chances you will succeed on your own are very small. This is too important to risk failure. Hire a lawyer.
- Contact your creditors. You should inform your creditors and collectors. Current bankruptcy law mandates that once a person has filed for bankruptcy, any debt collection phone calls have to stop. In fact, once the bankruptcy process has begun, all communications between them and you has to stop. They cannot write you, Tweet you, call you. You will have to let them know who your legal representation is and where you will be filing. This should, at the very least, put your mind at ease when you are no longer getting painful phone calls.
- Start your credit counseling as soon as you can. You are going to have to go to credit counseling at some point so you might as well get it done sooner than later. It also will look good to the court that you have been proactive with this. They will see that you are trying to make sure you can get out of this situation and not end up back there. You do not want to wait until the last minute because that can cause delays in your case.
Filing for bankruptcy is never a fun thing to do but it is often necessary and can be a good thing.