Being on shaky financial ground can be very scary. Even if you’re having a steady influx of money coming in each month, if you’re saddled with a large amount of debt, you might find yourself struggling to make ends meet. In this type of situation, bankruptcy might sound like the most viable option for you. However, making the decision to file for bankruptcy shouldn’t be taken lightly. So if you’re considering this financial solution, here are three things you should do when you’re on the verge of bankruptcy.
Talk To Your Creditors About Your Bankruptcy Plan
Before you take too many steps down the path of filing for bankruptcy, Latoya Irby, a contributor to The Balance, suggests that you first speak to your creditors about the decision you’re considering. When you file for bankruptcy, your creditors likely won’t end up getting any of the money that you owe them. So if you share that this option is on the table for you, you might come to find that your creditors are more willing to work with you and help you come up with some type of reasonable repayment plan. After all, your creditors would much rather get at least a partial repayment than no repayment at all.
Prepare For The Emotional Toll
If you decide that filing for bankruptcy is the best option for you, it’s important that you’re aware of what this can mean for you. Not only will you be taking a hit to your credit, but you might also have to deal with some emotional damage. According to Joe Apfelbaum, a contributor to Forbes.com, it can be very hard to have a loss like those that often come along with bankruptcy. Especially if you’ve worked hard to gain certain possessions or standings that are tied with your financial situation, you should be aware that these things might no longer be there for you, which could be hard to deal with emotionally.
Know What You Risk Losing and How Not To Lose Them
As was mentioned above, there is a chance that you’ll lose some things from your life after you file for bankruptcy. However, exactly what you’re putting as risk will depend on the bankruptcy laws for the state in which you live. But according to Justin Harelik, a contributor to Bankrate.com, one of the worst things you can do is start moving things out of your name and into other people’s names in the hopes of saving them from your bankruptcy proceedings. To have the best possible result for yourself, try to be as open and transparent as you can during this process.
If you’re on the verge of filing for bankruptcy, consider using the tips mentioned above to help you prepare for all bankruptcy might bring into your life.