Signs That Bankruptcy Might Be Worth Consideration

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You’ve seen the late night commercials with the lawyer that declares he can solve all of your debt issues for a few hundred dollars. Many people believe that bankruptcy ruins your life for the next 7+ years and should never be considered. But bankruptcy can be a reasonable solution for some. It does create challenges, but those considering bankruptcy already have challenges.

Bankruptcy is worth consideration under these conditions. Check off the situations that apply to you:

  • Your financial situation will only get worse for the foreseeable future. Your debt is increasing every month and you have no way of increasing your income.
  • You’re insolvent. Your assets and income are no match for your debts.
  • You’re forced to use credit to buy food. If you can’t meet your basic needs without resorting to credit, your financial situation is likely to only get worse.
  • You’ve sought professional help without any viable solutions. Credit counseling can help to determine if you’re a good candidate for bankruptcy. It can be challenging to find a trustworthy credit counselor, so do you your homework.
  • You’ve spoken to your creditors. If you mention bankruptcy, they’re often willing to reduce your debt significantly. Getting something is better than getting nothing. Give them a call and see what happens.
  • You’ve investigated what debts will and will not be discharged. Student loans, past due child support, alimony, and recent tax bills will stick with you. Be sure you know how much bankruptcy will actually help your situation.
  • You’ve researched if you can keep your property and home. It’s possible your home may be sold to pay your creditors. Most valuable personal property is also vulnerable to seizure and sale. Asset seizure depends both on which type of bankruptcy you file and the state you live in.
  • You’re aware of what will happen to your bank accounts and retirement accounts. The circumstances vary by state. Perform your due diligence.

Bankruptcy is intended to give those with desperate financial situations the opportunity to start fresh. Be certain to investigate the ramifications of filing for bankruptcy. It’s not to be taken lightly because the negative effects can last for years. However, depending on your situation, it also could be the most viable solution to your needs.

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