How to Know When it’s Time to File for Bankruptcy
A lot of people try to avoid filing for bankruptcy by any means necessary. They think that others will think poorly of them for filing for bankruptcy, and they think that they’ll destroy their credit, as well. But while they put off filing for bankruptcy, their debts continue to mount, along with accrued interest and penalties, and their financial problems get worse – and their options diminish.
The decision to file for bankruptcy is a personal one, and there is no singular answer to help you know that you should file or to know when to file. Here are a few things you should think about – and discuss with a bankruptcy attorney serving Gilbert:
How Much Do You Owe?
How much you owe will have a big impact on your decision to file for bankruptcy. Obviously, $100,000 in debt will seem a lot more desperate than $10,000 in debt. However, even $10,000 in debt can be completely overwhelming for some people.
You need to take an honest accounting of all the debt you owe, and you need to note the interest rate for each (which will determine how quickly your debt grows). Once you have a good understanding of what you’re up against, you can determine if you have the ability to pay or if you need to consider bankruptcy.
What Options Do You Have to Pay?
You need to look beyond your income to determine if you can pay off your debt on your own. Start by determining if you can increase your income. Can you ask your boss for a raise? Can you get a second job? Can you rent out a room in your home? Can you start a side business, like freelancing?
If you can’t increase your income, you’ll need to think of ways to reduce your expenses. Can you downsize your home? Can you cut out expenses, such as turning off services, canceling your gym membership, or cutting back on mindless spending?
Your last option is to consider selling things. Do you have an extra vehicle you could sell? Is it a good time to sell your house? Do you have belongings that you could do without?
You need to find as much money in your budget as you can. The more you can come up with to pay your debts, the faster you’ll be able to pay them off or get them to a more manageable level.
What are the Stakes?
If you have fallen behind on your payments or racked up a lot of debt, you are certainly facing consequences. At a minimum, you’ll be looking at paying a lot in fines and interest. Those late fees add up fast, making your debt problem much worse. If you have multiple delinquent accounts, those fines and interest will have even more devastating effect.
However, if your debt problems are worse, you may be facing bigger stakes: Your car might be ready to be repossessed or the bank may have begun foreclosure proceedings against your home. If you are facing severe repercussions, bankruptcy may be the only choice you have left – assuming you act fast enough.
Meet with a bankruptcy attorney in Gilbert to learn about your options for debt relief. The attorney will walk through these and other considerations with you to help you determine if bankruptcy is the right choice for you. In most cases, you will experience far more benefits with bankruptcy – and more quickly – than if you tried to pay off the debts on your own or to negotiate with your creditors. Bankruptcy allows you to discharge your debt or to put it on an affordable payment plan, making instantaneous and positive changes in your life.
Gilbert Bankruptcy Lawyer is ready to help you learn how bankruptcy can help you put an end to your debt problems and create a stronger financial future. Our bankruptcy law office helps individuals and businesses seeking bankruptcy protection, including both Chapter 7 bankruptcy and Chapter 13 bankruptcy. We’ll help you understand the best strategy for getting the maximum debt relief through bankruptcy protection. Contact us in Gilbert today to speak with a bankruptcy attorney about your options for debt relief.