Has Overspending Landed You In Serious Debt? 4 Steps To Help You File For Bankruptcy

If some significant overspending got you into deep financial trouble and there's no way to negotiate your way out, it's time to consider the bankruptcy option. Once you've run out of other options, bankruptcy can give you the fresh start you desperately need, especially if you're ever going to rebuild your credit again. However, filing for bankruptcy does take some careful planning. Here are four steps that will help you navigate the process.

Gather All Your Bills Into One Place

If you're going to be filing for bankruptcy, you'll want to make sure that you list all your debt on the paperwork. Failing to identify all your debt could result in your continued obligation to those creditors even after your bankruptcy is discharged. To make sure all your debts are properly processed, begin gathering all your bills into one place. That way, when it's time to file the paperwork, you'll have everything you'll need to include all your debt.

Enroll in a Budgeting Class

If your financial situation is the result of overspending, it's time to enroll in a budgeting class. Once your bankruptcy is discharged and all your debts have been forgiven, you'll want to make sure that you know how to budget your money properly. A budgeting class will give you the tools you need to do just that. Not only that, but budgeting classes and credit counseling are often required before you can file for bankruptcy. Enrolling in a budgeting class now will help you expedite the process once you get started.

Hire a Bankruptcy Attorney

After you've gathered all your bills into one place and you've enrolled in a budgeting class, you'll need to hire a bankruptcy attorney. Trying to file for bankruptcy without the aid of an attorney is the biggest mistake you can make during this process. Federal bankruptcy laws are complex and confusing, especially for the ordinary person. Don't risk problems with your bankruptcy case. Hire an attorney before you begin the process.

Avoid Falling Into the Debt Trap Again

Once your bankruptcy is discharged and your debts have been cleared, you'll begin to receive credit offers in the mail, especially from credit card companies. They know you won't be able to file for bankruptcy again for a few years, so they'll want to extend credit to you. Opening one new credit card account is a good way to start rebuilding your credit rating. However, opening too many credit card accounts is a good way to fall back into the debt trap again. To avoid that, stick to opening just one new credit card account so that you can rebuild your credit while still controlling your debt.

To learn more about bankruptcy, contact a law firm like O'Connor Mikita & Davidson LLC.