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What should you consider before filing for bankruptcy?

Filing for bankruptcy in Washington, D.C. is a serious step, with potentially lasting consequences. In order to ensure that it is the right debt relief option for you, it is important that you look at your situation from every angle. Thus, there is a number of things should consider before pursuing bankruptcy relief.

Generally, different types of debts are handled differently during bankruptcy proceedings. For example, some debts may have to be repaid, while others may be discharged. Before making the decision to file for bankruptcy, you should consider what types of debt you have. If the majority of your debts are unsecured, then filing for bankruptcy may relieve you of your personal liability, which may ease some of your financial stresses. However, if much of your debt is secured, then you may still be on the line for the amount that you owe or lose the property that was put up as collateral.

Bankruptcy is not necessarily your only, or most effective, method for regaining control of your finances. Therefore, you should look into the other debt relief options available to you. The Federal Trade Commission suggests that you contact your creditors before filing for bankruptcy. You may be able to work out an alternative payment arrangement with them that is better suited for your situation and budget. You may also consider working with a credit counseling service.

While Chapter 7 and Chapter 13 bankruptcy alike may offer the relief that you need, it is important to keep in mind that there are consequences to filing for bankruptcy. When you file for Chapter 7 bankruptcy, some of your property and assets may be subject to liquidation. By filing for Chapter 13 bankruptcy, you are committing to a three or five-year repayment plan. Thus, before you decide to pursue a bankruptcy case, it is important to consider the potential consequences.

This post has provided an overview of the factors you may consider before filing for bankruptcy. You should keep in mind, however, that each situation and case is unique. Therefore, this post should be taken only as general information and not as legal advice.

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