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How do you know when to file for bankruptcy?

On Behalf of | Sep 27, 2020 | Chapter 7 Bankruptcy

Bankruptcy is an often-misunderstood process that sometimes leads to the perception that it won’t help consumers to file. It’s imperative that anyone who’s struggling to pay their bills explores the possibility of filing for bankruptcy because it might provide them with the fresh financial start they need.

There are several signs that point to the need to file for bankruptcy. You might experience some of these and not others, so think carefully about how your situation might be affected by filing bankruptcy.

  • You can’t pay your bills on time. You may find that you’re having to cover only the necessary expenses, but things like credit card payments are falling by the wayside. This might lead you to try to work out alternative payment plans with your creditors, but that’s not always feasible.
  • You’re facing wage garnishment. This can be either because of a current court or a pending lawsuit. In either case, don’t waste any time. Instead, discuss the case with your attorney so you can find out if bankruptcy will provide you with some relief from the garnishments.
  • You’ve gone through credit counseling. You must complete credit counseling in order to file for bankruptcy. Sometimes, credit counselors can work out a deal on your behalf, but this isn’t always possible. Since it’s required that you go through it anyway before you file, you might as well give it a chance.

Filing for bankruptcy isn’t a failure. It’s a responsible way to handle debts that have gotten out of control. In many cases, the final straw is unexpected medical costs or a reduction or loss of income, so don’t think that you’ll be looked down on if you file.