If you are struggling with debt, you may be thinking about bankruptcy. But you may worry what people will think if they know you filed for bankruptcy, or you may worry about what bankruptcy will do to your credit. So, you may be looking at alternatives to bankruptcy and trying to figure out how you can pay your debt off on your own.
To start, you need to get honest with yourself about your debts and your ability to pay, and then you need to create an actionable plan for paying down that debt. While you are assessing your options, you should also meet with a bankruptcy attorney in Gilbert to make sure you know the facts about bankruptcy and have a proper understanding of how it can help you. You need all the tools at your disposal for managing your debt.
Here’s how you can meet your debt head on if you want to try to steer clear of a bankruptcy in Gilbert:
Assess Your Debt
By the time that bankruptcy enters your mind, you probably have a significant amount of debt, and you probably have fallen behind on payments. You may not know all the accounts you have, since many may have fallen into delinquency. Or you may not realize how much you owe, since you may have stopped looking at the penalties that have racked up.
You can’t keep burying your head in the sand when it comes to your debt. You need to assess your debt by creating a comprehensive list of what you owe. List accounts, balances, interest rates, and expiration dates, if any, such as for promotional periods. You will need all this information to develop a plan to move forward.
Review Your Budget
Now that you know what you owe, figure out what you can pay. Make a comprehensive budget that includes all the necessities, such as your rent or mortgage payment, car payment, grocery bill, and child care. Then make a list of the things you pay that you may be able to cut, such as online streaming subscriptions or gym memberships.
You need to know everything that you spend money on each month, and you need to know which of those expenses are necessary and which are dispensable. Keep in mind that if you have to cut a service, it may be only temporary. You can always restart the service once your debt is more under control.
Look for Ways to Increase Payments
The next step is to figure out how you can increase payments so that you can reduce your debt. Can you increase your income by working extra hours or by taking on a second job? Again, this doesn’t have to be forever. You can do this for a few months to help you get a greater handle on your finances. Can you lower the amount you pay on other things? For example, you might find ways to save on groceries, or you might refinance your car loan to get a lower monthly payment.
Look for every way that you can get more out of your budget so that you can pay more toward your debts. Every day you maintain a balance on the account, you are accruing interest and your debt is getting bigger. The more you pay, the faster that debt will go away.
Decide On a Repayment Method
Do you want to pay off the accounts that have the lowest balance first? Or do you want to focus on those that have the lowest interest rates? You may have accounts that are ready to go into collections or even repossession, and you may need to focus on those first.
You need a repayment plan so that you know how to focus your financial resources each month. With a plan, you can also better track your successes and feel a sense of accomplishment so that you can stay on track to meet your goals.
Going through these steps will give you a realistic understanding of your debts and your ability to pay so that you can either develop an actionable plan to get out of it or you can come to the realization that bankruptcy is the best choice to deal with your debt. In many cases, bankruptcy will give you the fastest route to becoming debt free. If you file for Chapter 7 bankruptcy, your unsecured debt could be completely discharged in as little as a few months. If you file for Chapter 13 bankruptcy in Gilbert, you could get on an affordable repayment plan that would be finished in just three to five years.
Call Gilbert Bankruptcy Lawyers today to learn more about how bankruptcy can give you the debt relief you need. You don’t need to toil away for years struggling to pay debts that you can’t afford. You can get relief now and begin the work of rebuilding your finances. Call us in Gilbert today to schedule a consultation with a bankruptcy attorney.