What Are Some Signs That You May Need to Declare Bankruptcy?


Anyone who is trying to decide whether or not to declare bankruptcy may feel that they have run out of options. Declaring bankruptcy is a major decision that people are called upon to make at some time in their lives, and it can be difficult to do this without help. Sound legal advice from a bankruptcy law firm can help you take a clear-eyed look at your financial situation, and decide on the best course to follow.

Declaring bankruptcy: the warning signs
It’s a well known fact that millions of Americans live from paycheck to paycheck, with little to no money saved for an emergency. An accident or illness can precipitate a financial crisis. In 2013 alone, 2 million people were forced to declare bankruptcy because of unpaid medical bills. Home loans and student loans are other sources of debt that can get out of control.
Sudden job loss due to layoffs or ill health and divorce can also be major factors in changing your financial condition. Deciding to declare bankruptcy can be a wrenching decision, and one that should not be made alone. A bankruptcy lawyer can help you look over your finances and decide what is the best course of action for you. When you look at your financial situation, there are some warning signs that will tell you if you can find debt relief or if you should file for bankruptcy.

  • You’re only making minimum payments on your credit cards
  • Bill collectors keep calling you
  • You’re using credit cards to pay for necessities
  • You’re considering debt consolidation
  • you’re unsure of the total among of debt you carry

If even one of two of these apply to you, you may be in a situation where your income is not sufficient to pay your monthly bills and debts.

Taking stock: count your assets
You may have other assets beyond your income, and this is the time to take stock of them. Assets can include property, stocks and bonds, retirement funds, and even vehicles. When you add up the financial value of your assets, it should be more than the amount of debt. If it adds up to less, it may be time to think about declaring bankruptcy.
In this case, your first step should be find a bankruptcy law firm that you can trust, to guide you through the process. It can be stressful and complicated, and an experienced bankruptcy lawyer can lay out your options along with some sound advice.

What are your options?
A bankruptcy law firm can advise you about the different kinds of bankruptcy and what they entail. A Chapter 7 bankruptcy uses your assets to pay off as much of your debt as possible. It’s quick and straightforward, but it leaves you with no assets. A Chapter 7 bankruptcy stays on your financial record for ten years, making it harder to reestablish your credit and buy a house or a car.
Chapter 13 bankruptcy allows you to keep your assets and pay off your debts over time, usually a period of three to five years. It’s known as a reorganization bankruptcy, and is usually a good choice for people who have a regular income. A low cost bankruptcy attorney can help you decide which option is right for you and do all the necessary paperwork.

While the word has an ominous ring, filing for bankruptcy can be a chance for a fresh start. A reliable bankruptcy law firm can help you to negotiate the process and find a firmer financial footing going forward.

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