Filing for bankruptcy should be considered a last resort after all other attempts to pay down debt have failed. A bankruptcy doesn’t wipe your slate clean of all debts, but it will affect your credit and stay on your credit report for several years. Before filing, speak with an Alloy Wealth Management fiduciary financial advisor who can offer sound advice and help you create a spending plan to tackle debt. A spending plan isn’t a budget, it’s a strategy designed to eliminate the monthly expenses you can live without, and free up money to pay more towards high-interest credit cards and other debt. 

While debating filing for bankruptcy, it’s important to continue to pay your bills. Bankruptcies go to court and a judge will evaluate payment history, any correspondence with creditors, and other proof that you did everything you could to get control of your financial situation before filing. When in court, the judge will decide whether you have the right to have certain debts discharged or if creditors can object. 

Individuals and businesses represented by bankruptcy attorneys tend to fair better in court than those who represent themselves, according to statistics. Bankruptcy is a complex subject. An experienced attorney can recommend your best course of action, whether to continue paying down debt and working with creditors to reduce debt or advise on the type of bankruptcy best suited for your situation. He or she will explain how assets may be used to repay a portion of the debt, what debt may be eliminated, and what debt will likely remain your responsibility.