Bankruptcy is a legal process, handled by an attorney. If you have questions or concerns, the first step you need to take is to schedule a consultation with a bankruptcy attorney who can sort out the facts and myths of bankruptcy relative to your situation. Certain states also have specific rules for bankruptcy, such as the bankruptcy laws california has, so speak to an attorney in your staet. A person who files for bankruptcy without knowing the full list of pros and cons, could find themselves in an even more serious financial situation than they were in previously. A good bankruptcy attorney will also assist you with loss mitigation to help you keep the assets that you can.

From a financial point of view, you need to sit down and figure out how much money you really owe. Make a list of balances and payment amounts along with all sources of your income and calculate the feasibility of successfully making payments each month, while still being able to live a normal, daily life.

In addition to your financial assessment, you also need to consider your mental and emotional situation. If bill collectors are ringing your phone morning, noon, and night and it is all taking a psychological toll on your physical health or your personal relationships, you may find that bankruptcy is the solution to your overall situation. If you find that you have the tolerance and ability to work through your financial situation on your own, keep your health in mind as you work toward your goals.

Bankruptcy does not come without consequences. First of all, it isn’t free and depending on the type of bankruptcy you file, there may still be monthly payments and fees involved. Until you consult with a professional, you can not make a decision about filing. Make sure you understand what can be affected by a bankruptcy filing, not only in the present, but for your future as well. Bankruptcy has a stigma that may affect your future for a time to come. You may no longer have an easy time getting loans, getting a job, procuring insurance, or getting credit potentially for the next 10 years. Because of the lengthy effect of going bankrupt, you can not make this decision lightly.

In addition to consulting with a bankruptcy lawyer, a qualified credit counselor may also help you make the decision about how to handle your debt, They can review your financial records with you and perhaps suggest alternatives to filing bankruptcy, such as helping you create a budget that would allow you to pay the debts on your own. They may even help you work through negotiations with your creditors to settle your debts outright for less than what is owed. You may also seek help from a debt management company or from family and friends who would be willing to lend you money to get you back on your feet.

Your Finances: When Is Bankruptcy the Answer? was created by and is property of American Consumer News.

Already being in debt and then being taken for a ride by some fly-by-counselor would be utterly devastating to both you and your financial situation. It is essential you do your homework before you commit to any credit counseling company. The first step is to check out the US Department of Justice website. They provide a list of companies who are approved to assist client with their debt. All counselors who are on the approved list must be non-profit organizations and are subjected to criminal background checks. They must also comply with governmental training and experience guidelines in order to be placed on the list. Included in the governmental guidelines is a company’s requirement to be bonded, or carry insurance in the event a company employee causes you to lose money because of their own mistakes or criminal intentions.

When contacting a credit counselor for an initial consultation, keep your ears open for some red-flag warning signals during their pitch. Any company who tries to force you into committing to a payment plan outright should be a warning. Legitimate counselors should want to help you explore all of your options, including the option to reduce your debt on your own by altering your budget. A counselor’s goal should be to initially go over every detail of you finances and then help you decide which method would work best for you. Imagine someone forcing you into declaring bankruptcy, when in reality all you had to do was simply adjust your budget.

Counselors who charge upfront fees that seem ridiculously high should be more-carefully evaluated. Many companies will require a monthly processing fee ($25 is average) and some charge a nominal set-up fee to get you started. A good way to reveal a dubious company is if you state you can not afford the fees and they immediately turn you away. The dishonest companies will also require a large sum payment in order to move forward with the company. On average, any company you deal with who has a fee over $50 on a monthly, administrative basis, should be considered and researched carefully.

For a list of reputable, approved counseling companies, visit the US Department of Justice at http://www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm.

Fed up with scraping the pennies together at the end of the month? It’s time to get impartial debt advice from professionals in debt management to help you get out of debt through an IVA, a consolidation loan or another debt solution tailored to your money needs.

CHECKING OUT COUNSELORS OF CREDIT was created by and is property of American Consumer News.