Bankruptcy is a hard choice to make for anyone. If you're one of the people who are wondering how to go bankrupt you probably already realize this. If you have decided that it's finally time to go bankrupt and are tired of the huge pile credit card bills, you're not alone. You might think that bankruptcy is your only available option at this point but that is not true and you should definitely check out all the other options first before you decide anything at all.

The first thing you have to understand is what exactly declaring bankruptcy means. There are two main types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 is for those of low income who cannot afford their monthly bills anymore. It allows them to get rid of most of their debt but at the expense of most unneeded amenities. You will no longer be able to have things like that brand-new PC or fancy TV. Chapter 13 means that you make a deal with your creditors to repay back what you owe over a three to five year period. Generally you don't have to pay back everything entirely; you may only have to repay 70% or so. But you are required to pay all that off before you get any more loans or other forms of credit

Finding A Bankruptcy Lawyer

You should almost certainly find a lawyer that deals in bankruptcy law if you decide to file for bankruptcy. You will have to file a claim at your local bankruptcy court and state your case before a judge. It is a complicated process and that is why you need a lawyer. Make sure that your lawyer has all your tax information as well as anything else relating to your debt and financial state. You will need a list of all your creditors, even those who you only owe a small debt to. It will not look good you leave anyone out. Make sure that deal with an experienced lawyer that will help you walk through all the steps. Once your lawyer has submitted a petition for bankruptcy, creditors are no longer allowed to contact you.

After you go through all that, you will have to go to a meeting with your creditors to explain your situation. They will examine you and your case and see if you qualify for bankruptcy. If you do a trustee will check and see if you need to liquefy any of your assets to pay off your debts. Then a repayment plan will be formulated to pay off your debts.

How To Not Go Bankrupt

Of course you can avoid all this if you just go with a different plan of reducing your debt. There are many different ways they go about eliminating your debt without the need of bankruptcy. The first that comes to mind is to try and actually pay off your debts. Many times if you contact your creditors directly they will work with you to give you lower monthly payments and perhaps reduce or eliminate your interest. They do this because they would much rather get most or some of the money that you owe them rather than lose it all in a bankruptcy proceeding.

Even if it means in a second job to pay off the debts it is worth it. Your credit score is so bad after bankruptcy you will likely not be able to get a loan for many years. Also if you decide to go through with bankruptcy you may be disqualified for jobs and/or sensitive positions.

You can also consider hiring a debt consolidation company instead of going bankrupt. They work with your creditors and pay them off in exchange for a loan and a fee that you must pay back to them. These range from $1,000 to over $3,000. There are also some free debt consolidation companies but the interest rates will be higher. But still even with the fees debt consolidation is almost always a better choice than bankruptcy.

So if you considered all these options and still feel that going bankrupt is your best choice, just make sure that you follow the advice above.  You can file for bankruptcy by yourself but is not recommended.  You should really find a good lawyer - it will be worth it in the long run.