The bankruptcy process is a tool for financial relief, and one that has given many people the opportunity to start fresh. While the process is intended for good, it may not always be the best choice for everyone. Before filing for bankruptcy it is important to consider a few aspects of your financial affairs.
Are you financially insolvent? If you are unable to meet your debt obligations to one or more creditors, you may consider yourself financially insolvent. In other words, if you cannot afford to make a payment on any one of your debt accounts, you may fit this description. However, this is generally a financial state that has, or is expected to, last for several months. Missing a payment one or two times does not necessarily fit this condition.
Do you have any assets at risk of repossession or foreclosure? If you have a secured debt asset, such as a car or home, that is at risk of being seized by creditors, bankruptcy may be an option for you to consider. However, these assets may be protected by directly negotiating with your creditor without the need for bankruptcy. Unless you have already received a foreclosure notice, you may still have time to discuss your options with your lender.
Have you considered all of your options? It is important that you have reviewed all of your debt relief options before filing for bankruptcy. This is best done by considering your budget and contacting creditors to negotiate directly. If you are unable to work out a debt relief plan that suits your budget, have assets at risk or expect your financial hardship to prevent you from meeting your debt obligations, talk with a Dallas bankruptcy lawyer about your financial situation. Always obtain professional consultation before filing for bankruptcy.