If you aren’t 100 percent sure you want to declare bankruptcy, I want you to make a phone call. And it’s not to me.

Call the hardship departments of your credit card companies, your auto lender, and your mortgage lender. Let them know you are considering declaring bankruptcy, and ask them if they can work with you to lower your payments.

The thing is this: Credit card companies and banks do not want you to declare bankruptcy. If you do, they won’t get a penny. And since they’d rather get something than nothing, it’s worth a shot to call them up and ask them what—if anything—they can do to help you lower your payments.

When you call, have a specific dollar-amount in mind that you know you can afford to pay each month, and don’t settle for paying a single penny more. Say something like, “If I can pay $100 a month for the next twelve months, and then go back to making my original payments, I can stay out of bankruptcy court.”

I know it’s weird that a bankruptcy firm is giving you advice on how to stay out of bankruptcy, but I’m different than all the other bankruptcy attorneys in San Antonio.  I truly believe in helping clients and non-clients recover from their financial mistakes so that they can enjoy a bigger future. And the truth is: bankruptcy isn’t for everyone.

Although bankruptcy helps people wipe the slate cleaner and start anew, it is a big decision that shouldn’t be made before you gather as much information as possible.  And sometimes, the solution is as simple as calling your creditors.

Keep in mind, though, that if you do not have a clear plan for digging yourself out of your financial hole, you should consider exploring bankruptcy. And here’s why: If you are struggling with your finances, and you do not see a light at the end of the tunnel, you will probably continue to struggling for a few more years. As you fight to stay afloat, you will likely miss some payments here and there, causing your credit score to drop even more. In two years, it will be the same (or worse) than it is now.

But if you declare bankruptcy now, think where you will be in four months: debt free! Plus, you will be on the path to rebuilding your credit score, and if you follow the simple steps, it could be over 720 in 12-24 months.

You may recall from a prior blog post, that one of the extra benefits that we offer our clients is advice on how to rebuild credit worthiness after bankruptcy.  The first thing I recommend after clients get debt free is to go slow and take a class or two.  The first class, and most important class to take, is Dave Ramsey’s Financial Peace University.  The class is free and it is held at various churches all across the country.  You just have to buy the books.  Remember, cash is king when times are tough, and cash is king in the world of credit.  So, if you ever want to buy a house, you will need to make sure you have cash-savings for a down payment and cash-flow (monthly income) for the monthly payment.  Using Davey Ramsey’s tools are the best and quickest ways for you to create for yourself more cash-flow and cash-savings.

If a client needs to increase their credit score to buy a house, then I recommend that they take the class offered by 720CreditScore.com.  After you complete your bankruptcy case, and preferably after you take Financial Peace University, enroll into their $1,000 credit rebuilding program called 7 Steps to a 720 Credit Score.

Our goal is simple: to show you how to get debt free, then start “getting ahead.”  This is why our clients hire us, and it’s why you will hire us. Call our office at (210) 930-7000 now to schedule your free consultation and learn about your bigger future.