When you are faced with mountains of debt, you may not be sure what step to take first. Many options are before you, each promising a positive outcome. You may wonder if it makes a difference which you choose.
The answer is yes, it does. Some ways of managing debt are more helpful than others and have a better impact on your current and future financial state. These are the do’s and don’ts to follow.
What to do
As you move forward in eliminating your debt, begin with these actions:
- Talk to an attorney about your options. A qualified bankruptcy attorney will help you decide which approach is in your best interest.
- Make a reasonable budget you can maintain to reduce your spending and increase your ability to pay back certain debts, such as loans and rent.
- Stop using your credit cards. Acquiring additional debt before filing for bankruptcy may harm your case by giving the appearance that you have no intention to pay it off before the court discharges it.
If creditor harassment is a problem, direct all communication to your lawyer. Once you file for bankruptcy, all contact with you must stop.
What not to do
It is important to follow these tips to prevent your situation from getting worse.
- Do not transfer or conceal assets in an attempt to protect them. You may be charged with criminal activity, or preferential treatment if you sold your assets to pay back certain creditors. There are legal ways to keep your assets depending on the type of bankruptcy you file.
- Do not fall for debt consolidation scams, which aim to make money for companies at your expense, leaving you worse off than before.
- Do not use a cheap bankruptcy lawyer or debt relief service. You get what you pay for, and errors will cost you more in the long run.
These are only the first steps to take on your journey toward financial freedom to keep you from making mistakes. The rest will depend on the course you choose.
Disclaimer – Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not gauranteed. Dramatization – not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.