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If you are currently dealing with bad credit, you may be wondering if you need to file for bankruptcy. The concept of bad credit vs bankruptcy can be confusing. The good news is that it’s possible to decide what to do to rectify your situation. First, it’s important to understand what bankruptcy can take care of and what it can’t take care of. Bankruptcy and IRS debt are not compatible. You will still have to pay the IRS what you owe them even if you file for bankruptcy. You can learn about bankruptcy and how it works by reading bankruptcy articles or asking some questions of a bankruptcy attorney.

Bankruptcy is a solution to consider taking if you’ve run out of options. If there’s no way you can pay all the debt you owe, and you keep sinking deeper and deeper into debt, then bankruptcy might be the perfect solution for you. An attorney will perform a means test to see how much money you earn. You could qualify to file for bankruptcy if you fall within the income guidelines. You’ll either be eligible for Chapter 7 or Chapter 13. Chapter 13 will require you to develop a repayment plan so that you can pay your creditors some of the money.

Approximately 1,221,091 Americans were overwhelmed by debt, and filed for bankruptcy in 2012. There are certain warning signs that indicate you could also be in danger of needing to file. If you use a credit card to pay for another credit card, if you are only able to afford the minimum payments, if you are not sure of how much you owe, if bill collectors call regularly, and if you are unable to pay your bills while your debt continues to grow, you may need to file.

• • How do you find a bankruptcy lawyer?

Before you go to hire a lawyer, it is a good idea to look for online legal help to get a basic idea of bankruptcy and its process. Hiring a lawyer should be your first priority after the research, so look for reviews and recommendations. If you need help finding the right lawyer, check with a local, legal nonprofit. They may be able to connect with appropriate resources to find a bankruptcy lawyer.

When you decide that it is time to file for bankruptcy, the are certain fears you might have. You might worry that you will never be able to own property again, you and your spouse will both have to file if you are married, and that you will never have good credit again. Come prepared with questions to ask a lawyer, so that you can have those fears taken care of and move forward with the process.

• • What do you do when you find a bankruptcy lawyer?

Your lawyer will work with you to find legal forms applicable to your situation. They will help you accomplish the pre-filing credit counseling, the actual form filing, post-filing credit counseling, and the trustee and creditor meeting. Your lawyer will help to move the process along and advise you through to the end, when a ruling is made on your filing and you are either released of your debts, or given a repayment plan.

Remember that a lawyer is important in the process of filing for bankruptcy, because without representation you could be taken advantage of by those you owe money to. If you need legal help, it is always best to speak to a lawyer so that you do not unintentionally run afoul of the law. Bankruptcy can be a difficult process, but with legal help it will be significantly easier than if you had to do it alone.