Advice When Considering Filing For Consumer Bankruptcy

If you've found yourself in a difficult financial situation and cannot repay your debts, filing bankruptcy may be an option. The federal government has changed a few rules in order to allow people to file, so before you hire a bankruptcy attorney and begin submitting all of the paperwork, there are a few things you need to know. This information can help you file or even may help prevent you from having to file bankruptcy altogether.

Credit Counseling

Before you start the filing process, you must enroll in some form of credit counseling by an approved government organization within 180 days of your filing. The purpose of pre-bankruptcy counseling is to help you get a clearer picture of your current financial situation, as well as take a closer look at some potential ways to avoid bankruptcy. The counseling session lasts anywhere from one hour to an hour and a half, and is typically free of charge for most people who cannot afford it. After counseling is complete, you will receive a certificate showing you've finished all the needed requirements. If there is not a local counselor in your area, some pre-approved organizations offer the same services via telephone.

Hire an Attorney

After your counseling, if you've decided that you still plan to file for bankruptcy, it is advised that you hire an experienced attorney. While this is not required, it is strongly recommended since they have the experience needed to help you navigate through the court systems as well as the paperwork involved. Since most people who are planning to file bankruptcy cannot afford to pay for a lawyer, there are many free legal services available. You should check with the American Bar Association for a listing of lawyers who offer free bankruptcy services. 


If you are concerned about the effects that filing for bankruptcy will have on your credit and your future ability to gain more credit, there are some alternatives you can attempt rather than going bankrupt. One of those options is debt consolidation, where you hire a company to assist you in putting all of your debt together and then making one monthly payment until it is paid off. This service will most likely close your open accounts, but it can also lower your current interest rates so you can pay everything off faster.

Another option is debt settlement, where you contact your creditors and offer to pay them one lump sum at one time for less than you owe. Many creditors are willing to settle their delinquent accounts for less than what is owed just to clear the account and avoid paying collection costs. 

To learn more about bankruptcy attorney's, contact a law firm like Wiesner & Frackowiak, LC