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When to Consider Bankruptcy

Understand your Filing Options and Alternatives

If you are faced with mounting debt and are being harassed by collection agencies, you may be wondering if you should consider bankruptcy as a solution to your financial problems. Before you rush out and file for bankruptcy, you may want to look into bankruptcy alternatives. In addition, you should determine whether the benefits of filing for bankruptcy outweigh the negative effects bankruptcy might have on your credit report. When making such an important decision about your future, it is important to get expert advice. A qualified Colorado bankruptcy attorney can review bankruptcy alternatives and options with you and recommend the most appropriate action based upon your specific circumstances.

Alternatives to Bankruptcy

You may be able to repay your debt without filing for bankruptcy. Here are a couple of bankruptcy alternatives:

Negotiate with your creditors - If you have income or assets you can sell to pay off at least a portion of your debt now, your creditors may agree to give you more time to repay your remaining debts or agree to accept less than full payment of your debts.

Get Credit Counseling - If you have available income, a credit counseling agency may be able to create a repayment plan to help you repay your creditors without filing for bankruptcy. Even if you decide to file for bankruptcy, under new bankruptcy laws, you would be required to go through credit counseling with a government approved agency within six months before filing.

When You Should Consider Bankruptcy

In some situations, individuals may be unable to get out of debt without filing for bankruptcy. Here are some situations in which you should consider bankruptcy for debt relief:

  • You have been unsuccessful in negotiating with your creditors to repay your debts.

  • You have been unable to repay your debts by working with a consumer credit counseling agency.

  • You lost your job or source of income.

  • You have a high level of unsecured debt, such as medical bills or credit card bills.

  • You want to avoid foreclosure on your house.

The Long-term Effects of Bankruptcy

A bankruptcy filing stays on your credit report for up to ten years, but in many cases, bankruptcy may be less harmful to your credit report than on-going accumulation of unpaid debt. Many individuals are able to rebuild their credit soon after their debts are discharged through bankruptcy. Bankruptcy can also protect important assets, including your home or car. Because every situation is unique, a bankruptcy attorney is the best source of information regarding bankruptcy options. An experienced Colorado bankruptcy attorney can evaluate whether bankruptcy is your best choice and if so, which form of bankruptcy you should file.

Bankruptcy Attorneys Who May Be Able to Help

Click here for a listing of Colorado Bankruptcy Law Firms.
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