If you are struggling to pay your debts and barely making ends meet in North Carolina, you may be feeling stressed out about your financial situation. You may also be considering if you should file for bankruptcy to put an end to the harassing creditor phone calls and endless bills you are receiving. Even though bankruptcy may seem like a cure-all for your financial troubles, it can have some serious ramifications for your situation.
Here are some key considerations you should keep in mind.
Bankruptcy takes time
You may think that bankruptcy is a fast process that can get rid of your debts and give you the financial relief that you seek. But it is not. It is a process that takes time depending on the type of bankruptcy you file. For example, if you file for Chapter 13, you can expect for the bankruptcy process to last as long as five years, states The Balance.
Consider other alternatives first
You should work with your creditors to resolve your debts on your own first. Many creditors offer lower payments, grace periods, restructuring and consolidation programs that can make your bills more manageable and help to preserve your credit worthiness. Do not expect for your creditors to know from your late and missed payments that you are struggling to pay them. You should contact them to inform them about your situation. It may seem embarrassing for you to discuss your finances with others. However, it is the only way for you to learn about other options you may have to resolve your financial crisis.
Understand the basics
There are two types of bankruptcy you can file. Chapter 13 gives you the opportunity to lower your payments and protect your assets so you can retain possession of them. Chapter 7 bankruptcy discharges most debts except for tax liens, child support, alimony and financial obligations to government organizations.
Bankruptcy can give you a fresh start. But it cannot teach you better financial habits to keep you from ending up in this situation again. Take some time to educate yourself to improve your money management skills to lower the chances of you needing financial protection and relief from your creditors in the future.
