Close-up of a bankruptcy petition

4 Interesting Facts about Bankruptcy You Probably Didn’t Know

While the idea of bankruptcy can be terrifying, it offers a viable solution when you can no longer pay for your debts. It can give you a fresh financial start.

Talk to an experienced bankruptcy lawyer in Salt Lake City if you consider filing for one as an option. You lawyer will most likely offer the following suggestions:

Try solving your financial woes first without resorting to bankruptcy

Check if your creditor offers low-interest or hardship repayment programs that can help you repay your debts. You can also talk to a credit counselor if you are having difficulty dealing with specific creditors. The counselor can help negotiate for viable repayment arrangements.

Avoid confusing the two common bankruptcy types

Your best option will primarily depend on your income. Based on the new regulations, you must qualify for a Chapter 7 (partial or full liquidation of debt) bankruptcy. If not, you need to file under Chapter 13 (reorganization plan). Chapter 13 will allow you to keep valuable assets, such as your car or home.

Fix the problem before filing

Before filing for bankruptcy, be sure to solve the problem that got you into debt in the first place. If the cause was unemployment, for example, getting a stable job is a good start. This is because getting a clean slate will be useless since your bills will start to pile up within a few months if you don’t have a steady source of income. Worse, you no longer have the option to file for bankruptcy.

Build an emergency fund

After you have been through bankruptcy, it won’t be easy for you to get a loan or apply for credit cards. As such, you have fewer options to cover for emergency expenses. Your priority is to find ways to build your emergency fund that will cover those unexpected expenses.

Consider these suggestions if you are thinking about filing for bankruptcy. Your bankruptcy lawyer can help you in more ways than you can imagine, so find the best one in your location.

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