Does bankruptcy make sense for your financial situation? Deciding if you should file for bankruptcy is never easy. The process takes time, costs money, and you are already struggling financially. When you file for bankruptcy, you lose control of how your assets and finances are handled.
While there are reasons keeping you from filing for bankruptcy, there are instances where bankruptcy makes more sense than “roughing” it out. If you are on the fence about filing for bankruptcy, here are some situations where it makes more sense to file.
You or a Loved One Has a Health Crisis
You have been diligent about paying your bills. However, you or a loved one is now sick and you can no longer keep up with your expenses. The health bills continue to climb, and with your reduced income, you cannot catch up. Severe medical issues take a toll like being unemployed.
Bankruptcy can help you with overwhelming medical debts. Before filing for bankruptcy, speak with an attorney. An attorney may recommend waiting until your medical treatments are done so that all debts are included – and so you do not fall back into debt after discharging a handful of medical debts.
Your Debts Exceed Your Income
Another time where bankruptcy makes sense is when your debts and expenses exceed assets or income. You cannot pay off your debts because no matter how much money you generate, it will never be enough to satisfy your debts.
You Want to Preserve Your Retirement Account
You have built up a retirement account, such as an IRA. You want to preserve those assets and make sure they are not liquidated while filing for bankruptcy. Luckily, federal law shields your retirement accounts from bankruptcy. So, even if you were to file for Chapter 7, you do not need to worry about your retirement accounts.
Your Creditors Will Not Back Down
You have attempted to negotiate with your creditors. You have asked for lower payments, special repayment programs, or lower interest rates. Despite your best efforts, they will not stop collections and will not work with you. In this case, you have no choice but to file for bankruptcy.
You Have Had a Major Life Change
Whether it is a divorce or death in the family, these life changes often put consumers into financial disarray. Divorces are especially difficult because they leave spouses with less income and more debts than their single income can handle.
In most cases, couples will consult with a bankruptcy attorney before filing for divorce to see if it makes sense to file in their case.
Speak with a Bankruptcy Attorney Today
Talking to a lawyer can help you decide if bankruptcy is an option for you. Our team will review your financial situation and help you not only decide if bankruptcy is right, but which form of bankruptcy to file. We can help you through each stage of the bankruptcy process. Contact us today to schedule a consultation.