How do I Know it is Time to File for Bankruptcy?

Filing for bankruptcy is an option people have when they are dealing with a lot of debt and are unable to pay the debt back. Some people worry about filing for bankruptcy because they have heard of how it will stay on their credit report for several years. While it is true that bankruptcy leaves a mark on your credit report for at least seven years, that does not mean that it is a bad thing for you. If you have a lot of debt and have tried unsuccessfully to get out from under it, your next best option may be to start the filing process with an experienced bankruptcy attorney by your side to provide guidance. Only you can decide when it is the right time to make this important decision in your life, but there are a few good reasons to go ahead with the filing process.

You Have Thousands of Dollars in Debt

If you owe thousands of dollars to different creditors, trying to catch up is tough. It is even harder if your income is still the same as it was when you initially applied for the credit cards and loans from the different lenders. The problem with having this much debt is that it usually only gets worse. These companies begin charging late fees each time you miss a payment and those late fees will quickly start adding up. By the time the credit card company charges your account off and sends it to a third-party debt collector, the amount you owe is going to be much higher than the amount you initially spent.

When you cannot afford to pay the money back on the amount you already owe, you are going to have a hard time trying to come up with additional funds to afford the cost of the interest fees and late fees that have been tacked on to these amounts over time. If you feel like you are in a vicious circle and you cannot seem to pay off enough of your debt in a timely manner, bankruptcy is likely your best option. You would have a way to finally get out of that financial rut.

You No Longer Have Money in Your Savings Account

In the past, you have likely added money to a savings account because you wanted to have some extra money available for rainy days. If you have pulled everything from your savings account to pay off some of your debt and you still owe a lot of money with no more savings available, you should consider filing for bankruptcy. You cannot pull money out of anywhere when you have a depleted savings account. You probably think you will never have an opportunity to get caught up and begin saving again because of all the money you owe to the creditors.

Debt Collectors are Constantly Contacting You

Are debt collectors constantly trying to get in touch with you? When they want to find out if you are going to pay what you owe to them, they will call at all hours of the day and night, including early in the morning and at night when you might be trying to eat dinner with your family or even get some sleep. Constant calls can cause a lot of frustration. Some people who are dealing with debt describe the chronic calls as maddening because it is like the phone is always ringing and there is always someone on the other line asking about money and reminding you of your debt.

Aside from contacting you to try to get in touch with you about the debt you owe, debt collectors often call places of employment and relatives of those who owe money. You are not going to want your employers or relatives to find out about your personal finances and the struggle you are having with debt. Not only is it embarrassing, but it can cause you to experience judgment from others, even if they do not understand your situation. When you are getting these calls daily, you can attempt to block the numbers from reaching out to you, but the debt collectors will simply call from a new, different number. It starts to feel a lot like harassment. If you cannot stand the thought of dealing with these calls for much longer, filing for bankruptcy would put a stop to the harassment you are currently receiving. Once you start the filing process, the creditors would no longer be able to contact you. Your lawyer would work on handling negotiations with them instead.

You are Struggling to Stay Afloat

Has it been nearly impossible for you to stay afloat due to your finances? Even if you are currently employed and earning a decent living, you might not have enough to afford mortgage payments or rent, groceries, bills, and credit card/loan payments. There have likely been times where you were paying off some of your debt instead of buying food to eat. You should never have to suffer in that kind of way. You need to have shelter, food, running water, and electricity. The debt you owe should not come before any of these things.

Once you have paid your rent or mortgage, purchased food, and paid off other bills for the house, you might not be left with much money. If you cannot afford to pay even the minimum monthly payment to each of your creditors, you are never going to be able to get ahead because those creditors will keep charging you more money for being late. If you are struggling financially and would still like to get out of debt, filing for bankruptcy is the right thing to do.

Choosing the Way to File

If you are going to file for bankruptcy because it is the best way for you to get control over your finances again, you should hire a bankruptcy attorney and then go over the different ways to file to figure out which one is best for you. The two primary methods of filing are known as Chapter 13 and Chapter 7. With Chapter 13, your debt is negotiated and then you can get on a repayment plan that is affordable and completely doable for you based on your income. With Chapter 7, you can have your debt completely erased, but you would need to sell off your possessions to pay your creditors. You would not need to sell the home you live in or the vehicle you drive, but you would likely need to sell additional homes and cars if you own them. Those  who would like to file Chapter 13 will need to provide proof of steady employment.

You will know when it is time to file for bankruptcy when your debt continues to pile up and you cannot afford to make payments anymore. If you feel like you are drowning in all the debt you owe and you are constantly receiving calls from debt collectors as they attempt to get money from you, there is a good chance that you are feeling overwhelmed, stressed, and frustrated. While it may feel like you will never get out of this situation, there is hope because filing for bankruptcy is always a suitable option.

If you are ready to get out of your difficult financial situation, file for bankruptcy with an experienced and reliable bankruptcy lawyer. You can get in touch with Bouloukos Oglesby & Mitchell at 205-352-4205.