Tired Of The Debt Hamster Wheel? Bankruptcy Might Be The Answer

Posted on: 24 January 2019

If your financial life has been spinning out of control for a long while, and you have decided it is time to get off of the hamster wheel of out-of-control debt once and for all, then bankruptcy may be the answer. While a bankruptcy lawyer will need to review your case to determine if you qualify for Chapter 7 or Chapter 11 and how you should proceed, there are many things you need to do as well, including each of the following:

Don't Make Any Major Purchases or Acquire New Debt

The bankruptcy court will look over all of your debt in detail for the year prior to your filing date. During this year, it is reasonable if you charge day-to-day items, such as groceries and gas, but it is not reasonable if you go out and buy all new furniture for your home or a multi-thousand dollar gaming computer. 

If you make large purchases, the court looks at this as fraud. They assume you had to know you were in financial trouble and by running up a bunch of new debt you assumed you would be able to keep the items you purchased without having to pay for them. 

However, there is one caveat to the above advice. If you know you will need a different vehicle, then you may want to purchase one before you file and reaffirm the debt in court to keep paying for it. This allows you to get a lower interest rate on the loan and show you plan to keep up your end of the bargain when it comes to the loan.

Take the Required Online Credit Counseling Course

When you file for bankruptcy, you are required to complete a credit-counseling course. You will need to pay a small fee for this course, and its completion is mandatory. Thankfully, the course only takes an hour or two and once finished you can print off the certificate your bankruptcy law firm will need to file with the courts.

Refer All Collection Calls to Your Lawyer

Lastly, one of the best aspects of filing for personal bankruptcy protection is you no longer have to talk to a single creditor. Every time you get a collection call, you should answer it and refer them to your attorney. Give them your bankruptcy lawyer's name and phone number and tell them not to contact you again because you are represented by legal counsel. Just as a police officer is no longer allowed to talk to you once you demand a lawyer, creditors are no longer permitted to contact you once you have informed them you have legal representation.