If you’ve filed bankruptcy before, chances are that you found yourself drowning under piles of debt, were unable to pay bills and possibly even faced the real possibility of losing your car, home and other assets. Because of these circumstances, bankruptcy provided a way for you to find relief and some financial freedom, but what happens if you find yourself right back where you started? Though it’s not very often, there are some individuals and even businesses that will find themselves back in the position of considering filing bankruptcy to discharge their debts. This can be for a number of reasons, but some of the most common reasons for people to consider filing a second bankruptcy are:
- Medical emergencies
- Poor investments
- Mismanagement of finances
None of us are immune to the above factors negatively impacting our finances, which means that we should have a course of action; a plan that will help to avoid the need to file a second bankruptcy. Discussing your options with bankruptcy attorneys in Fort Myers is always a wise decision and should be done before you think filing a second bankruptcy is necessary.
This article discusses tips to avoid a second bankruptcy, as well as considerations to understand if you do find yourself needing to file bankruptcy again.
Tips to Avoid a Second Bankruptcy
The ways in which to avoid a second bankruptcy are similar to that of avoiding bankruptcy altogether. Some of the key elements include everything from selling assets, and budgeting to negotiating with creditors via your Fort Myers bankruptcy attorneys. The following tips are a general idea of how you can take back control of your finances in order to avoid a second bankruptcy:
- Sell some of your property. If you are facing financial crisis, it may be time to take an honest look at your assets and see what you could sell in order to make some extra money to pay off any outstanding debts and/or bills. You can sell household items, appliances, electronics, jewelry on eBay, Facebook, Craigslist or even have a garage sale! This tip is most beneficial when you start to see the bills piling up. However, if you wait too long it may be too late to play “catch up”.
- Budget, budget, budget. Usually what happens when people need to file bankruptcy is that they are spending more money then they are earning. If it’s early enough in the game, you may be able to even out your debt by simply budgeting correctly. You can do this by cutting out unnecessary expenses, such as limiting the amount of times you eat out, meal planning, cancelling subscriptions to unnecessary goods or services, setting aside a set amount of money for each area of life, etc. In addition to reducing weekly and monthly expenses, you can save money on bills like electricity by making small changes in your habits, like unplugging appliances and making sure to turn the lights off when you’re not in a room. Though these savings can seem trivial, they can add up in the long term.
- Borrow from friends and/or family. If filing bankruptcy is turning out to be the only solution for you, some bankruptcy attorneys in Fort Myers suggest asking a family member or trusted friend for a loan to help pay off some or all of their debt. According to US News, you should make sure that the person you’re asking money from is 100% on board to help you. Will their financial help really solve your problems or only serve as a “band-aid” to your impending bankruptcy? And most importantly, have you considered how you’ll pay both your family and creditors back in time? Relationships can be ruined by money, so make sure it’s worth both of your time before asking for help.
- Consumer credit counseling. Credit counseling is required before you file bankruptcy, so if you’re having problems working with or dealing with creditors you may want to enlist the assistance of a consumer credit counselor. The job of the counselor is similar to that of a Fort Myers bankruptcy attorney, as they help to put together a debt management plan that can allow you pay back your debt within three to five years. If you need help finding a credit counselor near you contact your bankruptcy attorney in Fort Myers, they can help you find experienced credit counselors that are well-versed in getting people out of debt before it’s too late.
- Settle debts with collectors. While debt settlement shouldn’t be your first option, if a second bankruptcy is looming in the foreground, debt settlement is an alternative to bankruptcy. If you’re able, don’t use a debt settlement company and don’t settle current debts first, just continue to make payments on them as normal. Focus your attention on any outstanding debts or debts that have already been sent to collections.
- Discuss your options with an attorney. A consultation with a bankruptcy attorney in Fort Myers will better help them to understand the strengths and weaknesses of your finances, thus providing you with a more specific plan to avoid a second bankruptcy.
Considerations for Filing Bankruptcy a Second Time
If you’ve exhausted all possible avenues to avoid filing a second bankruptcy, but nothing works, you may need to file bankruptcy a second time. Since this is the second time you are looking to discharge outstanding debt, there are some things to consider before filing, mainly the time between bankruptcy filings. A Fort Myers bankruptcy will be able to tell you whether or not filing bankruptcy a second time is a viable option for you. Additionally, here is a simple breakdown of the timeline according to debt.com of how long an individual or business must wait before they can receive a second discharge:
- Chapter 7, then Chapter 7 = 8 years from the first filing date
- Chapter 7, then Chapter 13 = 4 years from the first filing date
- Chapter 13, then Chapter 13 = 2 years from the first filing date
- Chapter 13, then Chapter 7 = 6 years from the first filing date*
*There’s an important exception to this rule that you should note. If you’ve paid off all of your unsecured debt holders back in-full or at least paid 70 percent of the claims made on a plan entered into in good faith, then you can file for Chapter 7 sooner.
Contact a bankruptcy attorney in Fort Myers today at the law office of Miller, Hollander and Jeda, to receive a free, no obligation consultation that can help you get back on the road to financial wellness.