A question asked by many in this bullying economy. Although bankruptcy is a valuable tool that can help many people resolve their debt troubles, it isn’t for everyone. Being able to recognize where you stand financially and obtain a realistic view of your financial future is the first step to financial freedom.
Knowing When It Is Right
If you are considering bankruptcy, don’t worry. You are not alone and you certainly can feel proud that you are taking steps to resolve your financial issues. Before you fill out any paperwork, discuss your situation with a bankruptcy attorney. They can help you find the answer to the following:
1. Have I missed payments? or Am I unable to make my upcoming payments?— Although this is an early indication that something is wrong financially, it should be taken as a very serious matter. Missing even a single payment can quickly result in credit collections and damage to your credit report. Further, it is a sign that your finances are not in order. However, simply overspending may not be cause for alarm. You need to take a realistic look at your income and expenses to determine whether or not you can actually afford to repay your debts.
2. Are creditors calling or sending collection letters?–This is typically they step in which people begin to become alarmed. No one likes dealing with creditors and they are persistent. Having an account turned over to creditors is serious business and your situation in likely to get worse if you don’t take action. Contact your creditor directly to determine your options for stopping the credit calls and getting back on track.
3. Have I tried other debt relief options?–Bankruptcy should not be the first course of action when searching for debt relief. Although it is highly beneficial, many people find that they can negotiate their debts directly with their lender for a suitable payment plan. It is better to at least try and secure a payment plan outside of bankruptcy, as long as (a) you can afford to maintain the payments and (b) you are not at risk of losing any assets.
4. Am I at risk of losing my home or car?–Perhaps one of the biggest benefits to bankruptcy, protecting your assets is a main motivator for many. Bankruptcy can help protect your home or car while you work to repay your debts through Chapter 13.