When Should You Consider Bankruptcy?

When Should You Consider Bankruptcy?

For the vast majority of people, when you borrow money you have absolutely all intentions of paying it all back. Unfortunately, in life, a lot of things can happen that end up making this process a lot more difficult than intended. Whether you end up losing your job, your hours get drastically cut down, your business, or you get sick and need to stay home for an extended time. Things can happen at a moment’s notice that makes your good intentions a lot more difficult to execute. This includes paying off all of your debts. When you have been dealing with debt, there is no doubt that you have been hunting for solutions. But, there is a good chance you have purposely avoided one of them: Bankruptcy. Unfortunately, there are situations where this may be your best – or only – option. Here are some signs that bankruptcy may be the exact thing that you need to be considering to help you and your debt issue.

The Hole Just Seems To Get Deeper And Deeper

You are paying and paying and paying, but your debt balance just does not seem to ever be going down. You might find that they are even creeping upwards despite all your efforts. This is a sign that your payment strategy is simply not working. One rule of thumb that a lot of debt consultants use is the 36-month rule. If you are in a situation where you will not be able to afford to pay off your debt within the next 36 months, you may need to seriously consider bankruptcy. 

You Need To Dip Into Your Retirement Savings 

If you are finding yourself more and more tempted to dip into your retirement funds early just to keep the creditors off your back, or if you are nearing retirement age and you are withdrawing these funds to pay off debt, you may want to consider talking with a bankruptcy attorney first. The older you get, the more risk there is in raiding your retirement funds to pay off debt. This is a much more costly way of getting out of debt than some of the other options on the table for a lot of people. 

Other People Will Be Suffering From Your Debts 

Lots and lots of bankruptcy research, including work done by now Democratic senator Elizabeth Warren, shows that dependents such as children are a huge signal for financial collapse issues, especially among women. So, when we are talking about your debt making other people suffer, we are talking about children, spouses, and even elderly parents. If you are trying to meet the financial needs of these dependents while also trying to pay down your own debts, it can be incredibly difficult to get out from under it. If there are people who are dependent on you, then it could be the right call to look into bankruptcy solutions. This is especially the case the higher the number of people who depend on you are. 

You Are Upside Down On Your Home 

While we are seeing a lot of news floating around about a massive housing recovery happening around the nation, however, this celebration might be a little too soon, because there are still roughly 7 million Americans that are still underwater on their home’s mortgages. If you find yourself as part of this huge portion of Americans who are upside down on their mortgage, you should be looking into bankruptcy, as it is one of the best ways to get relief from this type of debt issue.

Filing Can Help You In a Number Of Ways: 

  • You can use this to catch up on your past mortgage payments so that you are able to stay in your home.
  • You can eliminate the potential need for a second mortgage or a home equity loan.
  • Erase some of the debt that could become due if you are foreclosed on. 
  • It can help you free up some money that you have been spending to lay down other debts and put it towards your home loan. 

Much needed help and debt relief 

So, if you are finding it very difficult to get ahead on your payments and pay down your debt, it may be the right time to stop ignoring the relief that filing for bankruptcy can give you. While it may not be the right solution for every scenario, it may be one of the last, and best solutions for you and your family. Talking with a professional bankruptcy attorney can be the best way to know if the bankruptcy solution is the best option for you and your specific debt relief needs. 

A common issue

It is important to know what debt is a common issue facing a lot of Americans, and there is no need to let common misconceptions or petty fears stop you from reaching out and getting the help that you need for a better life. 

Contact us today to get your bankruptcy process started and to answer any questions you may have.