Filing bankruptcy is a tough decision to make and you must take this decision very prudently. Your decision must be based on reasoning and certain facts. It should not be based on frustration. Never hurry to decide to go on the path of bankruptcy. You must look into all the aspects. In a worse financial trouble, when the monster of debts has opened its jaw to eat out your finances and peace from life, it is very hard for an individual to keep their calm and think prudently. However, it is very important for you to understand the decision to go on the path of bankruptcy will adversely affect your financial life for at least a decade ahead. Following are some of the steps that are recommended for you to go through before filing bankruptcy process. You may find an alternative solution hidden in these steps.
Assessing Your Income And Expenses
You can start with assessing your income and expenses on your own. Moreover, after all, now the new bankruptcy laws have made it mandatory for you to pass the Means test before filing bankruptcy. The Means test, as introduced by the new laws, is nothing but the evaluation of the income and expenses of the debtor. The objective is to figure out the real financial situation of the debtor. As per this method, you should pen down all the regular and irregular sources of income and the essential expenses that you need to pay every month on paper. Some people try to evaluate these things in their mind or verbally, which is not recommended. Writing the things down on paper will be less stressful and will give you accurate figures. Now deduct the amount of the essential expenses from the total income and see, if this available income is enough to pay off the monthly installments of the debts that you owe to the various creditors.
Talk To The Creditors
From the evaluation of the income and expenses, you may find that the income remaining with you is very little in comparison to the huge debts that you owe. If this is the case, the next step before filing bankruptcy must be the negotiation with the creditors. In most cases, it is very difficult for an individual to negotiate with the creditors on their own. Therefore, the prudent way to go for the negotiation is to go along with a bankruptcy attorney. The attorney is an expert negotiator and your chances of getting a fair deal is maximized by this.
There are several other steps as well. For example, you may choose to go through the debt consolidation or credit counseling services.