Bankruptcy is always a scary prospect for people to face. Sometimes, though, it really is for the best; it’s a necessary step to take in order to move forward. That being said, you should still consider the alternatives to filing bankruptcy before taking said steps. It has permanent ramifications you’ll need to live with, after all.
The first thing to consider when thinking about declaring bankruptcy is what the worst-case scenario would be if you just didn’t do it. If you have little to no income, you might be what is known as judgment proof. This is also referred to as collection proof as it means creditors would have nothing to gain by suing you. You have nothing for them to be awarded, so it’s really not worth their time.
Along the same lines, sometimes creditors just opt to write off debt rather than waste resources going after it. That debt then stays on your record for seven years, but it’s then erased and that’s all you suffered.
Of course, you’re not judgment proof for life. If your financial status changes, these creditors may all of a sudden worth their time again if they hadn’t written off the debt.
Another option is to negotiate with your creditors. Often, you’ll find that they just want their money (or as much of it as possible), so they’re willing to work on something with you. A debt management agency is also helpful in this situation too, as they’re often better at negotiating and add an air of validity to your intent.
Sometimes, though, after considering or even trying these alternatives, you’ll find that bankruptcy really is the best or only option you have. If that’s the case, speak to an attorney. You don’t need one to file, but they can help you with the process to ensure it goes as smoothly as possible.