If you are facing financial difficulties, consider the following to determine whether bankruptcy is the best choice for you:
Are you being sued by a creditor? Filing for bankruptcy automatically stops a lawsuit and prevents the creditor from placing a lien on your home or garnishing your wages and bank accounts.
Are your wages being garnished? A bankruptcy will immediately stop all wage and bank account garnishments.
Is your mortgage company foreclosing or is your car being repossessed? When you file for bankruptcy, all foreclosure and repossession actions have to stop. These creditors can seek relief from automatic stay through the court to continue with the foreclosure and repossession, but filing for bankruptcy will gain you some time. A Chapter 13 bankruptcy may prevent the foreclosure action or repossession from proceeding and allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a payment plan.
Do you think that you can ever pay off all your debt? If you can only make the minimum payments on your credit card debt, it’s likely that the interest rates and penalties will eventually balloon the credit card debt to the point that you are only making payments on the interest and not reducing the principal debt. If you cannot afford payments that will allow you to pay off all your medical bills, credit card debts and car loans within the next 5 to 7 years, you should consider whether bankruptcy will be the better choice. Some people can avoid bankruptcy by selling their house and cars and reducing their monthly expenditures, but others simply do not have sufficient income to cover their daily living expenses in addition to making extra payments on outstanding debt. However, keep in mind that certain debts, such as student loans, child support obligations, and certain tax obligations are not dischargeable through bankruptcy.
If you have additional questions about filing for bankruptcy or would like to speak to someone about your particular situation, please contact our office and ask to speak to one of our bankruptcy attorneys.
Disclosure: The services or benefits mentioned in this article are with respect to bankruptcy relief under Title 11 of the United States Code. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.