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Paying Back All Debt vs. Filing Bankruptcy: How do I Choose?

Paying Back All Debt vs. Filing Bankruptcy: How do I Choose?

For many individuals, debt is unavoidable as everyday life sometimes gets in the way. Whether it’s student loans, medical bills, credit cards, taxes or any other type of debt, when it becomes unmanageable you could find yourself surrounded by unnerving collection calls — or even worse — garnishment, repossession or foreclosure. There are two choices in which you can rectify your debt situation — attempt to pay off your debt entirely or file bankruptcy. Which one works the best depends on your financial situation. Here are some tips that can help you decide.

When Is Bankruptcy The Best Option?

Bankruptcy is the best option when you have no other reasonable recourse in which to pay off your debts. This means that you've not only made attempts to pay your debts as they stand but that you've also tried to refinance at a reasonable interest rate, negotiate with your creditors to find payment plans that will allow you to make affordable payments.

In some cases, you may simply owe too much or have creditors that are unwilling to work with you. Unfortunately, this can put you in a situation in which you won’t be able to maintain a reasonable standard of living while paying off your debts. When making the final decision to file for bankruptcy, don’t attempt to do it on your own. The courts will expect you to know how bankruptcy laws work and without experience, it could cost you the debt relief you deserve. Having an experienced bankruptcy attorney on your side can make all the difference.

What Happens When You Can't Pay Your Debts?

If you can't pay off your debts, you'll go through a fairly laborious process. You'll start by getting harassed by creditors. After about thirty days, you'll start to see damage to your credit score. Eventually, your creditors will take you to court. At this point, the court will give you the opportunity to pay off your debts or to enter into an often-punishing payment plan. If you are unable to pay at this point, you could be facing garnishment, repossession, foreclosure or even have liens placed against your property depending upon the type of debt you are in. If you are threatened with being taken to court to satisfy your debts, contact a bankruptcy attorney immediately as they can help stop garnishments and collection activities.

How a Bankruptcy Attorney Can Help

If you've reached the point at which you cannot pay your debts, a bankruptcy attorney will be your best ally. He or she will be able to explain the process of bankruptcy to you and answer any questions about how bankruptcy will impact your future. The attorney will also advise you as to whether filing bankruptcy is the best way to deal with your current issues or if there are any other steps you can take before you file. With the help of a bankruptcy lawyer, you can start the process of getting your finances back on track. You may be thinking, I cannot afford a lawyer. In most states, there are options to file for bankruptcy relief with little or no money upfront.

If you are looking for a fresh financial start and to put yourself in the position of getting your credit back on track, you must decide whether you can realistically pay off your debts. The right answer depends on your individual situation, so don't be afraid to ask for advice. When you're ready to make a decision, make sure that you contact Moore & Associates, LLC today to learn more about bankruptcy and our no cash upfront options so you can get the debt relief you need.
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