How to Know When
Bankruptcy Is Right for You
Before you decide to file for personal bankruptcy you should
be aware that it is not necessarily the best choice for everyone. For many
people, bankruptcy should be the last-case scenario only after they have
weighed all of their options and determined that they can’t remedy their
financial woes.
Ultimately, the decision to file for bankruptcy should be
made between you and an experienced bankruptcy attorney. However,
there are other methods of determining whether you can get the help you need
before consulting with a lawyer and we will outline some of them here.
Are You Eligible for
a Debt Management Plan?
Most people who are financially distressed look to
bankruptcy to alleviate them from credit card debt and help them get a new
start. Before signing the bankruptcy paperwork, sometimes a debt management plan
can help you to reduce your monthly payments, lower interest rates, stop late
fees and collection calls and ultimately put you on a path to avoiding
bankruptcy.
If you have not already, see if you are eligible for a debt
management plan before deciding it’s time to throw in your chips.
Determine if
Bankruptcy will Actually Help You
In some cases, bankruptcy will not actually alleviate you of
all your debts. Certain types of unavoidable debts, called priority obligations,
may not be wiped out in bankruptcy.
You have to consider what you are trying to accomplish by
filing for bankruptcy and find out if Chapter 7 or 13 will remedy you of your
concerns. As bankruptcy can be complicated, it’s best to consult with an attorney
to address what you are hoping to achieve by filing and if there are other
options.
Do You Qualify for
Bankruptcy?
Personal bankruptcy, Chapters 7 and 13, have certain
eligibility requirements. For instance, if you are going to file for Chapter 7,
you’ll have to have a low enough income. For Chapter 13, your debts can’t
exceed a certain limit.
Not everyone qualifies for bankruptcy and debtors’ cases can
be dismissed if they don’t comply with the courts requirements. For this reason
individuals are discouraged from filing without the help of a bankruptcy
professional or bankruptcy attorney; there are simply too many laws and
policies that can be missed that may result in the dismissal of your case or
worse, fraud which results in fines or criminal charges.
Is it Time to File
for Bankruptcy?
If you are looking for the answer of whether or not you
should file for bankruptcy, you should start by asking yourself the above
questions. If you find that you can’t afford a debt management plan, are unemployed
and have no way to pay off any kind of debt, your best bet may be to consult
with a bankruptcy attorney.
Ultimately a bankruptcy attorney will be able to help you
explore your options and help you get through what is undoubtedly a stressful
and challenging time in your life.
Author Byline:
Debthelper.com is
an IRS Approved 501c3 Non-Profit Florida Corporation dedicated to our mission
to educate, advise and empower youth to seniors to handle debt, credit and
housing and to provide affordable housing opportunities through the acquisition
and rehabilitation of residential properties.
