Don't panic: You can prepare for bankruptcy

When financial trouble hits, the way you react will likely impact your ability (or inability) to find a solution and get things back on track. Like many other people throughout the nation, some New Jersey residents may tend to panic, feel overwhelmed or helpless, and suffer much anxiety worrying about losing their homes or having to battle creditors who are harassing them by phone.  

If you have walked in similar shoes, you know that it isn't always easy to keep a positive attitude when you're having trouble paying your bills or simply making ends meet at home. Bankruptcy is often a viable solution in serious financial crisis situations. However, even the word itself makes some people nervous. If you're considering filing for bankruptcy, you'll be glad to know there is much you can do to prepare.  

Take one step at a time 

Rather than try to address the whole problem at once, it's helpful to remember that bankruptcy is a process, and you may fare better in the long run if you try to be as informed and prepared as possible ahead of time to avoid complications. The following list breaks it all down into practical steps you can take:  

  • You'll need to be able to report a lot of information regarding your finances. You can't report things you don't know, so it's a good idea to carefully review your assets, liabilities and expenses, as well as tax and income information, so you know exactly where you stand. 
  • There are various resources available you can use to find out your credit score. Such information can help you understand the impact bankruptcy will have on your credit report but can also help you set goals and lay the groundwork for a stronger financial future. 
  • You can benefit from connecting with someone who is well-versed in bankruptcy law. An experienced attorney can provide strong support and can help you determine which type of bankruptcy best fits your particular needs. 
  • You will have to take a credit counseling course to be eligible for bankruptcy. This can take as long as six months, so the sooner you get started, the better.  

One of the benefits of bankruptcy is that filing places a stay on collections. This means that by informing your creditors that you are claiming bankruptcy, they must cease all attempts to contact you. Once you file for bankruptcy, you cannot file again for a certain number of years. However, with careful planning and strong support, you can obtain debt relief and move toward restored financial stability. 

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