Declaring bankruptcy may be one of the most challenging decisions you have to make, mainly because it has long-lasting effects on your credit. There are many options to look at before deciding to file bankruptcy, such as debt consolidation, and sometimes debtors are willing to negotiate a settlement if you talk to them. If you cannot do those two things, it is time to speak to a qualified professional about filing for personal bankruptcy.
How do I know if I should file for personal bankruptcy?
It is time to consider filing for personal bankruptcy once you are no longer able to pay bills and you are having difficulty meeting your basic living needs.
People often ask how they will know when it is time to consider filing for personal bankruptcy. Whether married or not, you should take time to go over your financials to find out how much you owe. Once you find out a dollar amount, a bankruptcy professional can talk to you about your options.
There are five main reasons why people may choose to file for personal bankruptcy.
1. Medical expenses are one of the main reasons people look into filing for personal bankruptcy. People who do not have any insurance or are underinsured can quickly run into money issues.
2. Overuse of credit cards, student loans, car or home purchases, and poor financial management are other reasons people choose to file for personal bankruptcy. It is easy to overspend and not even realize.
If you went to college, student loans could easily be overwhelming. Credit card offers start coming in, and it is easy to say yes to them. Low-interest rates look good when you are looking to purchase a car or home. Often people will get tempted by offers of low to no down payment when driving by car lots. If you find yourself in this situation, it may be time to look into filing for bankruptcy.
3. Job loss is a common reason people file for personal bankruptcy. If you no longer have a steady income, it is impossible to keep up with monthly payments, and it can cause debt to accumulate. Often people will use their credit cards to keep up with debt, and this compounds the debt.
4. Separation or divorce is another reason people file for personal bankruptcy. Going through a separation or divorce is an area where debt can add up quickly. Paying for attorneys and loss of half of your income can be devastating to finances. In addition, splitting assets, or if you have to pay alimony or child support, may become difficult.
5. Unexpected emergencies can put a strain on finances. Often unexpected emergencies can happen; maybe your car broke down, your home suffered damage that your insurance did not cover, or there was an unexpected accident.
Types of Bankruptcy
Typically, there are two different types of personal bankruptcy that people chose to file. One type is Chapter 7 bankruptcy and the other type in chapter 13. There are similarities and differences between each of these, and a professional who specializes in these two types can better help you decide the best one for you.
Chapter 7 bankruptcy is when you liquidate your assets to pay off as much debt as you can. Both individuals and businesses can file for chapter 7 bankruptcy. Receiving a discharge when filing for chapter 7 personal bankruptcy takes between three to five months.
Chapter 13 bankruptcy is when your debts are not immediately erased, but instead, you make an agreement to continue paying on the debt for another three to five years, and any unpaid debts after this time are discharged. There are a few main reasons to choose chapter 13 bankruptcy when filing for personal bankruptcy.
One of the most common ones is having a mortgage on your home and not wanting to lose it. Only individuals and sole proprietors can file for chapter 13 bankruptcy. Discharge of chapter 13 bankruptcy does not happen until the repayment plan is complete.
There are many benefits in filing for personal bankruptcy and can help you take control of your finances as well as secure your future. Although there are some adverse effects on your credit, it is possible to get your life back and secure your future with careful planning, diligence and sound advice from an experienced bankruptcy attorney.
The road to financial recovery
Filing personal bankruptcy will help to relieve a lot of stress from your life, making it easier to start over. It is essential to find out exactly how chapter 7 and chapter 13 bankruptcy works. To do this, you need to talk to a professional who is better able to guide you.
Hines Law has been providing bankruptcy solutions to the residents of Massachusetts for over 20 years. Our Bankruptcy Firm is full-service and has the compassion, knowledge, and expertise to help you gain control of your finances with peace of mind. Call for a Free Case Evaluation today.
The post How do I Know If I Should File for Personal Bankruptcy? appeared first on Bankruptcy Lawyers Serving Framingham, MA and Beyond.
No comments:
Post a Comment