Many people have faced chapter 13 or chapter 7 bankruptcy. They could also have home equity loan bankruptcy and it is important for them to get assistance from financial consultants and especially, lenders. We should know that even the smallest things in our lives could trigger many unfavourable things, including bankruptcy. This could affect our freedom and our overall lives.
However, if bankruptcy is already inevitable, it is necessary to make proper measures and empower our recovery efforts. There are many documents that we need to handle and it is important to avoid these mistakes:
1. We don’t look before leaping:
We may make mistakes by not considering all consequences, arguments, rationale and alternatives. Between those solutions, there could a single silver-bullet method that can wipe away our difficulties and financial woes. We could also see multiple mistakes and grievous errors that should be avoided. Misinterpretations and oversights could still happen, so we should be aware of them.
The dynamic unfolding of those complex processes may come at high price and risk. Bankruptcy is the last resort, not the band-aid solution. We should be able to allocate our funds appropriately and avoid mismanaging them.
2. We tend to manipulate and bend the law:
If we try to manipulate or bend the law; we will live to regret it. People in bankruptcy are already in difficult situation and it is a bad idea to make their situation worse by lying or cheating. Escalating and spiralling debts are bad enough, we shouldn’t add that with extra penalties and even criminal charges.
This will cause us to lose creditworthiness and credibility. Our chance of recovery can be much more difficult to achieve. Only law-abiding people with solid financial recovery plans can put themselves back on track. So don’t create or buy fake credit reports.
3. We accumulate additional debts:
We shouldn’t underestimate the potential destructive force of debt. If uncontrolled, debt can put us into much more difficult situations. We also shouldn’t underestimate our ability to gain money without debt. Many people borrow money too prematurely, when they could actually get fund from other sources. If additional debt is unavoidable, we should make sure that we choose lenders who are willing to give us lower interest rates.
In addition, borrowing against our retirement savings is a very bad idea. This could sacrifice our future and make our situations more difficult.
4. We are too trustful with DIY approaches:
It is acceptable to take initiatives and become more self-dependent. However, there may not be alternatives to several things when we file for bankruptcy. The paperwork may seem deceivingly simplistic, but it could cause problems if we underestimate it. We often need help from professionals and experts who know how to deal with the situations.
Those protocols, documents, legal filings and proceedings can really be difficult to handle without professional assistances. We can hire experts who work on our behalf, they may even broker deals and negotiate for us.