How do I know when it is the right time to file for bankruptcy?
Every situation is different, but generally, Bankruptcy is a last resort for people who can no longer pay off debts that have been accruing over the years. Our experienced attorneys will analyze your specific situation and help you decide if the time is right. We will explore all of your options with you, with our main goal being to make sure you do not file bankruptcy at the wrong time. The following are things to consider which may mean that the time to file bankruptcy is right:
Reason One: Making Even Minimum Payments Is Impossible
If making even minimum payments on bills has become impossible, then it is probably time for bankruptcy. This is the right time if budgeting and cutting back on expenses still does not free up enough money to satisfy the demands of creditors. The inability to make minimum payments will mean the amount of debt will continue to increase through late fees and other charges until there is no hope of repayment. Filing for bankruptcy is the best option when this occurs.
Reason Two: Assets Will Be Lost
Another sign that bankruptcy might be the right choice is if assets are certain to be lost at some point in the near future. An asset could be a home or a car. If creditors are threatening repossession or foreclosure despite the best efforts to make payments, then bankruptcy might be able to help. Foreclosures could be delayed until the bankruptcy is complete. Assets like cars might still be lost although there is a chance the debt could be restructured so the vehicle can be kept.
Reason Three: Relying On Credit Cards to Buy Necessities
A sure sign that bankruptcy is probably necessary is if the household has started relying solely on credit cards to buy necessities and pay bills. This is a sign that the amount of household income is not sufficient to sustain everyone in the home. Relying solely on credit cards is the start of a long journey that will end with legal action, loss of assets and potentially homelessness once the credit cards become unusable. Filing for bankruptcy can potentially rescue the family from disaster in this situation.
Reason Four: Income Is Stagnant or Declining
If there is no way to increase the household income or if the income amount is declining despite mounting bills, then bankruptcy might be the only way out. Stagnant or dropping income will start to create a deficit that will widen between what is owed and what is being paid. There is often no way to cope with this situation. Bankruptcy can provide a brief period of calm where everyone in the household can start over and escape from many existing debts.
The list from above does not include every reason why someone might find themselves filing bankruptcy, and each individual situation should be looked at carefully by an experienced attorney before someone should file a Chapter 7 Bankruptcy. Call Badnell & Dick Co., LPA today to discuss your situation and see if now is the right time for you.
Federal law requires the following statement: We are a debt relief agency. We help people file for protection under the bankruptcy code.
