Mired in Debt? Here's What to Do
By: Frances Cerra Whittelsey; Source: AARP Bulletin Date Posted: 2006-11-01 12:46:00-05:00
If late fees and high interest rates are getting you deeper in the hole, sign up for debt management help. Consider asking creditors for a more lenient payment schedule or lower interest rates, or consolidate your debts.
If you conclude that bankruptcy is your best option for a fresh start, here are some tips:
- First, find out if you're eligible under Chapter 7, Chapter 13 — or not at all.
- Hire a bankruptcy lawyer. "Don't listen to anyone who tells you that he handled his own bankruptcy and everything went just fine," says James Caher, co-author of Personal Bankruptcy Laws for Dummies.
- Remember that the new law requires you to get credit counseling before you can petition for bankruptcy.
- If foreclosure on your home is a possibility, contact a bankruptcy attorney immediately.
- Bankruptcy does not necessarily wipe out debts like mortgages, child support and taxes. If you have a pension, 401(k), retirement account or life insurance, check your state laws to see if they are protected.
- Be prepared to provide detailed information on your assets and income. Be truthful, and don't try to hide property. You must list all creditors, liabilities and expenditures, too.
- To pay costs of filing, you can sell assets or ask for a loan from an employer, friend or relative. Be sure to tell them your intentions.
Additional Related Links
Throw Me a Lifeline (May 2005)
50-Plus and Going Broke (January 2005)
Basics for Anyone Considering Bankruptcy (January 2005)
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