When you look at the total value of your assets and subtract the number of your liabilities; if the number is negative, you are in what is commonly known as “upside-down.” Your debt is more than your net worth. If you sold everything you own, you would still not have enough money to pay for everything you owe.
Just because you are upside down in your debt is not in itself a reason to file bankruptcy. If you can meet your obligations with money left over, you should be able to work yourself out of debt in time.
If, however, you are losing ground each month and getting further behind, you may want to consider bankruptcy. If you can keep up with your mortgage payment even though you owe more than it’s worth, you will probably be alright even without filing bankruptcy. Sometimes one big financial hit is enough to put you even more behind, leaving you unable to catch up without borrowing more money and putting yourself in even greater debt.
When you have an automobile loan, you are probably paying more than what your car is worth due to the rapid depreciation. Along with credit card debt, medical debt, and personal loans, you may be struggling every month to keep up. You could find yourself still in debt even after you sold all of your assets and would have to start all over building up your belongings. A better option would be to file bankruptcy and have your unsecured debt wiped away and give you a chance to catch up on your secured debt like a mortgage or vehicle payments.
If you are considering bankruptcy contact a Dallas bankruptcy attorney to find out how you can get a fresh start.