Certainly this article is about bankruptcy but I want to tell you up front that you may come across the word 'budgie'. Don't worry, the article is not about birds; I do like budgies though. I use the word 'budgie' or 'budgies' sometimes in place of budgets because a budget is known to get budged and also as it makes me laugh!
Well than, simply put bankruptcy is a procedure which allows a debtor to get a court ordered exemption from his debts. In some cases this is a viable option. Although just because someone is in debt doesn't mean it's time to file for bankruptcy as there are consequences.
Should I file bankruptcy?
Tough question really. You'll need to discuss this one with a bankruptcy attorney or a credit counselor as they can determine the benefits and costs for your situation. The kind and amount of debt you have can make a big difference and really you make the final decision in the matter anyway. Know the consequences fully before you make your final decision. Many bankruptcy filings could have been prevented with a strict budgie.
Other than the big 'B' what's available?
There are numerous choices available rather than filing bankruptcy. What is suitable to you depends largely upon your financial situation. Again, go for financial counseling prior to filing a bankruptcy case to make sure you know the full ramification of what your about to do.
Here are some possible options available:
Management Of Your Finances
You can hire a financial manager for handling your debts, and to pay you an "allowance" in the mean time till you get things turned around. This option is known to be helpful if your problems are related to bad spending habits. North Americans are taught that it's okay to buy items we want with other peoples money so this fuels the urge to spend more than we make. If you don't want something so rigid, simply having a financial counselor help you create a budget can go along way. Don't forget though a budget will only work for disciplined folks that don't have problems buying bright shiny objects.
"Working Out" Your Debts
Choose a financial counselor very carefully, as there are lots of self-professed counselors available in the market who will charge huge fees and services. Try to find a non-profit financial counselor. Sophisticated creditors already know that its hard to collect debts, whether you declare bankruptcy or not. Collection agencies usually take large commission for collection debts, litigation can be expensive and timely, and forcing debtors to file a bankruptcy case is not always a guarantee of recovery anyway.
Refinancing
Do you own a house that you've been paying off for a while? If you have some equity in it there's a good chance you can refinance it and get a really low interest rate and pay off your debts faster. Single low payment companies should be avoided as they often have high interest rates. Again I say the budgie may be best. Loan packages are probly the safest through your bank or credit union.
Avoiding Credit Repair Scams
You may have seen ads offering to repair bad credit or promising to remove bankruptcy from your credit history. Many of these offers are fraudulent and proceed with caution. Your credit rating can be boosted but I'll save that for another time.
Oh, on another note, stay away from "bright shiny objects" (got that term from my neighbor). Simply put, don't put yourself in situations of drooling over items that are not in your budget. If it's something always on TV, turn it off man! The budgie is very important and could get you out of this mess without giving into what seems the only route, that being bankruptcy. Depending on your situation of course. If your several million in the hole and your only experience is working fast food joints (has made millionaires out of many btw) well, your either going to need lot's of prayer (call me if you go this route) or file for bankruptcy. I hope this has been of some help or at least a tad humorous to brighten your day.
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