How to Decide if It’s Time for You to File for Bankruptcy
Bankruptcy
Bankruptcy is a huge step. It could have huge and profound effects on your life for at least ten years.
It should always be used as a last resort. However, despite how serious it is, certain situations warrant the use of bankruptcy.
Below are a few factors to consider when considering filing for bankruptcy.
Do You Have Too Much Income?
In certain cases, you may be denied a Chapter 7 liquidation of your debts.
Instead, you may be forced into a Chapter 13 reorganization of your debts. To obtain a Chapter 7 bankruptcy, you must pass the income means test.
If you make too much money in the context of where you live, you may be rejected outright.
Do You Have Assets You Want to Protect?
You should remember that not all assets will be exempt from the liquidation you will undergo.
While you may be able to keep your primary residence and a single vehicle, other property you own may be confiscated by the court and sold off to pay creditors.
Research the law in your state to discover what property of yours could be at risk.
Have You Contacted a Lawyer?
Bankruptcy can be a painstaking legal process to move through. Significant mistakes can certainly result in your attempt to obtain bankruptcy being denied by the court. This is why you need specialists on your side.
Attorneys, such as those at Knollmeyer Law Office, PA, know the process and can help you obtain either a Chapter 7 or Chapter 13 bankruptcy.
Have You Tried Negotiating With Your Creditors?
Bankruptcy should be a last resort. You may have alternatives you should explore.
For one, you may have the ability to negotiate with your creditors to have your debt reorganized into a form you are more easily able to pay off.
Creditors want to be paid back. They should have an incentive to negotiate with you.
Remember that Chapter 13 is a court-mandated debt reorganization anyways. If you can obtain one without paying legal fees, you should consider that a win.
Overall, it should not be your first choice. If you have ways to deal with your debt, you should explore those routes first. A bankruptcy will have a huge impact on your ability to borrow money in the future. Even potential employers may not hire you over it. However, for certain people, bankruptcy is the best choice for moving on with their lives.
Category: Bankruptcy
