When some people hear the term “bankruptcy,” they shirk away. On the other hand, some people prematurely announce they are going to declare bankruptcy, file the paperwork and discover that they really did not need to in the first place. Understanding the seriousness of your financial circumstances will help you to determine if you are the right candidate.
Willingness to Accept the Consequences
Filing for bankruptcy means that you are going to face certain consequences. Speaking with one of our lawyers, and thoroughly reading through paperwork will help you to understand what the specific consequences for your scenario are. For example, you may lack the ability to take out any credit cards for an extended period of time. Therefore, you must recognize what the consequences are and express willingness to accept them.
Willingness to Part with Personal Property
Depending upon the type of bankruptcy you are filing for, you may have to surrender some of your personal property in order to deal with the debt. For example, you may need to move out of the house that you own and into an apartment, or you might have to surrender your vehicle. As a result, you must be prepared to find alternative ways to get to work or another place to live. This situation does not occur every time a person files for bankruptcy. Instead, you should research the details of the specific type of bankruptcy for which you are filing.
Specific Type of Bankruptcy
If you do decide to file for bankruptcy, you will likely file for Chapter 7 or Chapter 13. Generally, Chapter 7 bankruptcy is for people who have little to no income and who need to have all of their debts obliterated. Chapter 13 bankruptcy is for people who do have an income and who will need to pay their bankruptcy bank over time. To decide if you should file, you should know about the specific requirements for each time. For example, it is possible that you will make too much money to qualify for Chapter 7 and, therefore, be eligible only for Chapter 13 bankruptcy.
Legal Troubles with Your Bills
Missing a payment on a bill every so often is not an immediate reason to file for bankruptcy. However, over time, you may find yourself consistently unable to pay your bills. Debt collectors are calling your home, and you are receiving letters in the mail about the issue. After some time legal action may be taken against you. Consulting with one of our bankruptcy attorneys can help you in this process and assist you in realizing the time has come to file for bankruptcy.
Home and Money Taken Away
When you are in serious financial trouble, the entities to which you owe money may begin to garnish your wages. Instead of relying on you to make payments on a regular basis, the entity will take your income. As a result, you can begin to suffer financially in other ways because you will then unlikely be able to pay the rest of your bills. Also, you could be in a place where your home is close to foreclosure because you have not paid your mortgage in quite some time. These are two major reasons to consider filing for bankruptcy.
You also may have been unable to pay the taxes on your property, or you might have experienced trouble with paying income taxes that you owe. Remember, these issues are related to the government, and you may find yourself in a position where you are being threatened with jail time. You can be taken to jail if you do not pay your taxes. On a lesser level, your wages might be garnished for this issue as well. Instead of facing these serious penalties, you can look into bankruptcy.
Understanding Lack of Funds and Bankruptcy
Some people think that they should declare bankruptcy because they do not have any money saved. As tough as it is to face, many people do live paycheck-to-paycheck. However, they are still paying their bills. People should understand when the situation turns into one where bankruptcy can be a solution. If people are unable to pay their bills and have no money saved, then they could be in that place. Also, individuals who are unemployed and do not see a paycheck coming any time in the future are also often candidates for bankruptcy.
Understanding all of the details of bankruptcy without the guidance of a trusted professional is challenging and overwhelming, especially during a period of time that is likely already stressful. Speaking with one of our experts helps you to determine if bankruptcy is the right answer for you and for which type you may qualify. You will have guidance as you walk through this process.