Filing for bankruptcy can be a difficult decision, especially if you aren’t sure whether the time to file is now, or later. Surveys suggest that loss of job and medical bill debts are two of the leading reasons why people file for bankruptcy. When both are a factor, it can make financial matters even worse. For many, bankruptcy is going to put them on a path to more secure financial footing in the near future. Other potential reasons for needing to file for bankruptcy include:
- Getting a divorce
- The home you own is in danger of foreclosure
- You can only pay for things using your credit cards
- Creditors have taken legal action against you for debt payment
- You are using credit cards to pay off other credit cards
- You have thought about withdrawing money from your 401k account
There may be other solutions for debt relief that you had not thought of before. Many people turn to nonprofit credit agencies who offer counseling and classes. For some, a debt consolidation loan or debt settlement may be a realistic solution. Making the choice to file for bankruptcy should not be taken lightly, and getting advice from a lawyer knowledgeable in bankruptcy law can make all the difference.
Another step would be to start getting honest about spending, and living within a budget. You may supplement your income with a second job or sell assets to pay bills. Understanding bankruptcy law and whether you qualify is going to be important in this journey as well. After filing for bankruptcy, not every debt you have may be eliminated. Furthermore, there are other areas that filing for bankruptcy may affect:
- Your credit score
- Your private and personal life
- Co-signers on property
- The necessity to sell off certain assets
- The necessity of fulfilling a payment plan
As our chapter 13 bankruptcy lawyer would agree with, if you are in financial trouble, consulting with a legal professional can help you understand your options moving forward.
