As millions of American’s are feeling the sting from the recession, they are using Chapter 7 and Chapter 13 bankruptcy to dig themselves out. Since so many people are faced with unemployment and underwater mortgages, they are being forced to reassess their personal situation and make important decisions that will impact their financial future.
Virtually any bankruptcy attorney will tell you that if your debt has reached an unmanageable stage, then you should consider bankruptcy as one of your options. Of course, making the decision to file for bankruptcy should never be taken lightly – one has to do so while taking into consideration all of their alternatives.
Have you already tried to negotiate with your creditors? Suppose you have exhausted your resources. If you have tried to negotiate with your creditors and they have not budged or if you are unsatisfied with the terms of your agreement, bankruptcy might be a better option.
Do your liabilities exceed your income? If your monthly payments cost $6,000 a month, but you are only bringing in $4,000 – you have a problem. At this rate, there’s no way that you would be able to compensate for the deficit unless you either filed for bankruptcy or miraculously found a much higher paying job in this economy.
What types of debts do you have? If a majority of your debts are unsecured such as medical bills, credit cards and old taxes – then bankruptcy might be an optimal solution.
Do you have a steady source of regular income but can’t afford to keep up with your monthly expenses? Or, do you want to keep your home from going into foreclosure? If this is the case, filing for Chapter 13 bankruptcy would allow you to pay all or a portion of your debts over a three to five year period. This is a debt reorganization bankruptcy that allows you to pay monthly payments at a rate you can comfortably afford.
Have you already exhausted all of your options? Have you already maxed out your credit cards? Have you borrowed money from friends or relatives? Have you already taken out a second mortgage on your house? Unfortunately, borrowing money is more of a band-aid than a permanent solution to a problem. Borrowing money from one source to pay off another source only serves to increase your total debt load, as opposed to reducing it. Borrowing can be a downward spiral for many individuals and a significant warning sign that trouble is brewing.
After assessing your situation, if you truly feel that bankruptcy is your only option – don’t wait. The longer you wait the worse things will get. A qualified bankruptcy attorney will be able to sit down with you and go over the details of your situation. They will be able to give you a good idea of what you should do next. In fact, they can probably paint a clear picture for you in just one consultation. You have nothing to lose from their advice, so contact a lawyer today!
