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.
When you take these steps, you'll feel better about your situation and what you'll face during the bankruptcy process.
It's never easy to decide in favor of bankruptcy, but once you realize the benefits, you may come to find that it's the best way to finally regain control of your finances.
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