Bankruptcy – Deciding if you need to file for bankruptcy?
You’ve found yourself in a position where it’s just not possible to pay all of your bills. Whether you went into debt due to an illness, the loss of job or an unexpected financial hardship of another kind, you’re worried about how you’ll ever be able to pay what you owe. Is bankruptcy the answer? Follow these steps to decide if bankruptcy is the right way forward for you.
Create a budget with your income, your living expenditures, your mortgage payment and your car payment. How much money do you have left each month? Would you be able to pay off all of your other debts at their current interest rates within 3 years if nothing changes? If so, you may be able to avoid bankruptcy.
Examine your budget further. Is there anything that you can eliminate that would give you more money to pay off your debts? Are any of your creditors willing to reduce the amount you owe them? Do you have any assets that you can sell or could you refinance your home to pay off your debts? If so, you may be able to avoid bankruptcy.
Try credit counseling. Before you file for bankruptcy, you must go through credit counseling anyway, and some people find that the credit counselor is able to get them a debt plan that fits into their budgets so that they can avoid bankruptcy. It’s important that you choose a certified credit counseling program and NOT a debt settlement program. Certified credit counseling services are nonprofit organizations, while debt settlement companies charge fees. The latter services typically fail to produce real results for clients. Most people who use them end up in bankruptcy anyway and are unable to recoup the money they paid in fees.
Look for signs that you can benefit from bankruptcy. Generally, the older a person, the more dependents they have and the larger the amount of debts that they owe, the more likely they are to benefit from filing bankruptcy. You’re also more likely to benefit if you have limited assets and little or no retirement savings and if a large amount of your debt is non-dischargeable.
Ultimately, the best way to determine whether or not bankruptcy is right for you is to speak with an experienced bankruptcy attorney about your specific situation. With more than 25 years of experience, Attorney Robert A. Boyd of Willoughby, Ohio, can help you weigh the options and decide if bankruptcy is your best option for debt relief. Contact his office at 440-918-1733 to schedule an appointment for a free consultation.