No one ever plans to fall into debt, but it happens more often than people realize. In many cases, you make financial decisions that you hope will help you pay off your existing debt, but only causes you to fall deeper in debt. For instance, you might think taking out a loan to pay off your credit card debt is a good idea. Even if you qualify for the loan, you’ll end up with loan payments and a credit card that you can now use freely. Before long, you’ll have that loan payment and more credit card debt.
The problem is that you may never chip away at what you owe, because your payments will primarily go toward the interest on your debt. If you’re not paying more than your creditors require, that interest can grow on its own. So, how do you get ahead of the situation? Many people can’t help themselves without the help of a bankruptcy lawyer Rockville MD. While bankruptcy may not be the ideal solution, it can provide the assistance you need.
There are several types of bankruptcy, so you will have to discuss which option is best for your situation. Once you determine whether you’ll be filing Chapter 7, 11, or 13 bankruptcy, your lawyer will counsel you on your obligations. While bankruptcy allows you to discharge some or all of your debt, it doesn’t come without restrictions. You’ll have to participate in credit counseling programs and you may be required to adhere to a repayment schedule for some of your debt.
Once your bankruptcy has been discharged, it will be up to you to begin rebuilding your credit. Although your bankruptcy will stay on your credit report for seven to 10 years, how you practice your financial responsibility can help you rebuild your score a little faster. Repaying your debts on time and being more selective about the types of credit you use can help you build a good credit profile. Before long, you may qualify for a home loan or an auto loan. While that may take some time, filing bankruptcy and taking control of your financial situation is the first and most important step.