Alexandria Legal Blog

No one wants to file for bankruptcy, but there may come a time in your life when you have no choice but to consider it. As complex as the process may be, once it's in the past, you'll look back and realize you made the best possible decision.

There are a variety of circumstances that can point you toward bankruptcy in Alexandria, including the following:

• Wage garnishment: With this, a creditor obtains a court order to garnish your wages. This money goes directly to your creditor, so your paycheck will be smaller.
• You can't keep up with your bills: This could happen for many reasons, such as an ever-increasing debt load, job loss, pay cut or a serious illness. If you're unable to pay all your bills, you have a few options. While cutting back on expenses is something to consider, you may find that bankruptcy is the only way to dig yourself out of serious debt.
• You've received a foreclosure notice: If you fall behind on mortgage payments, your lender will eventually send you a foreclosure notice by mail. This isn't something you should put aside. It requires your immediate attention, as ignoring it could result in losing your home in the near future. With bankruptcy, the automatic stay halts the foreclosure process, thus giving you enough time to figure things out.
• You continually hear from debt collectors: As soon as you fall behind on payments, you can expect to hear from debt collectors. They'll send letters, make phone calls and may even decide to file a lawsuit against you. Upon filing a bankruptcy petition, an automatic stay will protect you against creditors.

If you've come to the conclusion that filing for bankruptcy is the best way to escape financial trouble, there's no better time than now to take action. Proper preparation will put you on the right path to success while helping you avoid common mistakes that can cost you time and money.

Here are four things you can do to prepare for bankruptcy:

• Review your finances: From your credit report to a list of assets and debts, you must have a clear idea of your financial situation.
• Compare Chapter 7 and Chapter 13 bankruptcy: There are eligibility requirements for both, as well as a variety of pros and cons. Knowing which one is best for you is essential.
• Stop spending: For example, don't run up a large credit card bill with the idea that you can discharge the debt in bankruptcy. If you're considering bankruptcy, it's time to stop spending.
• Understand the process: You want to know what you're getting into, as this will help you decide if it's the right decision. For instance, Chapter 7 bankruptcy typically comes to completion within four to six months. However, with Chapter 13, you'll repay some of your debts through a repayment plan that lasts three to five years.

Many debtors take advantage of their federally protected rights to file for bankruptcy protection when they are faced with mounting debts they are unable to pay. But that doesn't mean that all debtors in every circumstance will be able to file.

There are also some strict rules that all bankruptcy filers must follow. Let's review some of the restrictions and misconceptions surrounding bankruptcy filings.

As your credit card debt mounts, you may feel like there's no way out. While this is a difficult spot to find yourself in, there are many ways to escape credit card debt to improve your financial situation.

A personal loan is one of the better ways to pay off credit card debt. Here's why:

• You can group all your debt into one loan, saving you money on interest and making it easier to manage your finances
• It's an unsecured loan, meaning you don't have to put up any collateral, such as your home
• You can use it for other purposes, such as paying medical bills or taking on a home repair project
• Using a personal loan typically costs less than a credit card, due to the fact that the interest rate is usually lower