Although I help consumers file bankruptcy for a living, the first thing I do at our free consultation is search for ways to avoid a bankruptcy filing. Some folks are in a situation where bankruptcy alternatives are their best option. Unfortunately, a bankruptcy filing often becomes inevitable for people who wait too long before getting advice and putting an alternative plan together.
Here are some things to consider doing immediately when you can’t afford your monthly bills anymore.
Ask For a Loan Modification on Your Mortgage
At the first sign of trouble, contact your mortgage servicer to see if you have modification options. The federal government and all of the major banks have programs designed to help homeowners who are struggling. Make sure you understand the terms before agreeing to them.
Try To Sell Some Assets
Craigslist and eBay are great tools you can use to sell electronics, furniture, clothing, and even boats or cars. If you are not using something which is valuable, it makes sense to turn it into cash. It takes a mental adjustment to live without some luxury items. Even so, you can purchase items you sell again after you can afford them. Financial trouble, if addressed, is only temporary.
In these difficult financial times, credit card companies will often discuss lowering your monthly payment, principal balance, or interest rates on certain debts. It is important to understand the terms of their hardship programs. Be certain that your interest rate and payment is going down before agreeing, and get advice if the terms are unclear.
Don’t use debt settlement companies. More time, energy, and money is spent with these companies than is necessary. Focus on any debt which is not current. This may be a good strategy if there is one particular debt causing the financial trouble.
Consult a Bankruptcy Attorney
Bankruptcy attorneys can review your situation, and make suggestions which can lead you down the right path. My initial consultation, in person or over the phone, costs nothing and can really help. Take action immediately! Waiting until you are behind limits your options.