Making the choice to declare bankruptcy is a large decision. In many cases, bankruptcy is the best option, while in others, it isn’t. Here are five questions you should ask yourself before you make the final decision to file for bankruptcy.
1. How much do you really owe? Some people struggling with debt think the problem is worse than it actually is. Take a minute to add up all of your debts and figure how much you actually owe.
2. Are your financial problems temporary? If you are expecting a large financial gift from a family member or waiting on a job promotion that could increase your salary, you may want to wait to file for bankruptcy to see if you can remedy the situation on your own first.
3. Are you prepared to rebuild your credit? Declaring bankruptcy can negatively impact your credit rating. This can make it difficult to obtain a mortgage or an auto loan. Before you file, you should be aware that it may take several years to rebuild your credit.
4. Will your creditors negotiate with you? Most creditors are aware that if you declare bankruptcy, they will receive nothing from you. Talk with your lenders and find out if they would be willing to accept a settlement for less than you owe.
5. Do you have any other options? Bankruptcy, while it is a viable option for many, does not have to be your last resort. At Morgan & Partners Inc., we can help you explore what your other options are, like consolidating your debt, to help you get out of debt and solidify a strong financial future.