No matter how deep your hole of debt, you want to keep bankruptcy as a last resort.
If there’s a way out of debt that doesn’t involve a trip to a bankruptcy lawyer, that’s what you want to do.
After all, bankruptcy costs money
and takes time. You have to give up all sorts of financial information
, and it doesn’t cover all types of debt.
Most important, bankruptcy is a tool you can’t use all the time. Better to save your best option for last.
Most of my job as a bankruptcy lawyer is to help my clients understand that I’m the last stop on the train, not the first. Consultations usually involve laying out all the options and then looking at which one is the best.
If filing for bankruptcy is the right way to go, I can usually help. But here are some of the other choices you should look at first.
Debt consolidation involves taking out a new loan to pay off the other ones. If you qualify for new financing at a better rate than the existing debts, it may make sense.
Unfortunately, most of the people who meet with me are already past due on their debts and so don’t qualify for a new loan. Still, it’s worth it for you to try as a way to get out of debt.