Do I have Enough Debt to File Bankruptcy?

Your non-bankruptcy options

I always advise people to avoid filing for bankruptcy, if you can. Anything that gives you immediate or a better long-term outcome is more preferable than bankruptcy. For instance, let’s look at what happens if you own a home. Usually, filing for bankruptcy improves your credit score within 2 years, if you still have an income. You can finance a home purchase.

Now, let’s look at what happens if you choose a debt management option. If you can pay off all debt within a time period of fewer than two years, then bankruptcy probably isn’t a good choice for you. But if you think that you’ll never be able to pay off debts for 18 months or more, then choose bankruptcy. A bankruptcy lawyer can discuss your options and help pin down your financial needs.

Are your creditors working with you?

If you can get your creditors to agree to a new payment schedule that helps to pay off debt quickly, then things may go well for you. Unfortunately, not all creditors are helpful, and this could lead to property loss, wage garnishment and higher stress levels. If this sounds like your current situation, then bankruptcy is probably the answer for you.

When you file for bankruptcy, your creditors have to abide by all court rules, and this includes changing their collection tactics and accepting payment based upon those rules. The court can even cap your interest rates when you file for Chapter 13 bankruptcy. If you are intent on repaying your debts but have a few uncooperative creditors, a knowledgeable and experienced bankruptcy lawyer can help find the best solution.

Types of debt you have; can I get rid of my debts in bankruptcy?

Filing for bankruptcy may not be an option if you don’t have the right type of debt. Basically, you can not get rid of debts such as student loans, tax debt or domestic support obligations. However, there may be exceptions to the rule. An experienced bankruptcy attorney can discuss this in detail with you. But all in all, most debts are eliminated during bankruptcy.

Your employment and income situation

The more income, the more options you have during bankruptcy. But this doesn’t mean things are always easy. Unfortunately, when it’s bad, it gets worst. You may be subjected to poor timing. For instance, maybe you’re going through a divorce, lost your job or have a large number of medical bills. This doesn’t mean you’re a bad money manager.

Things happen, and you didn’t have enough money to pay your debt at the time. But now you have your income again. Use bankruptcy as a way to pay down debt and get back on track. Don’t use your money to pay for something that was out of your control. Why try to dig out of a hole that only gets deeper. Talk to an experienced lawyer instead.

Are you facing foreclosure or repossession?

f you want to keep your possessions, talk to an experienced and knowledgeable attorney. Start the filing process right now and stop your home from going into foreclosure. Do this even if you don’t have other debts. Filing a Chapter 13 bankruptcy allows you to pay all past due mortgage payments. If you don’t file for bankruptcy, the only way to stop foreclosure is to get all caught up on payments before the auction date of your home. Many times, this is just too much to accomplish.

Do you own “non-exempt” property?

The bankruptcy court will get rid your responsibility to pay off debts. However, you must tell the court the asset value of everything your state deems non-essential per that state’s exemption statute. This is a statute that says certain types of property are bare necessities. All individuals are entitled to them. This means creditors cannot take these types of properties away from you.

Use bankruptcy is a way to protect yourself and your property. But on the other hand, if you have a lot of non-exempt property, then bankruptcy may not be a good option for you. If you’re trying to protect yourself and you can’t keep the asset that you’re trying to protect, why file for bankruptcy? At a minimum, talk to a professional bankruptcy lawyer about your specific situation. Determine if your assets are protected or not. Know this information before liquidating or selling your assets.

Free Consultation with the Bankruptcy Lawyer

I am knowledgeable about bankruptcy law. I’ve practiced it for many years now. If you are unsure about your debt and whether or not you should file for bankruptcy, it sounds like you need professional legal help. Schedule a free consultation with a highly trained bankruptcy lawyer. What can you lose? You’ll probably gain some valuable insight about your personal situation.

Please call me today at (801) 432-8682 to discuss your specific situation and how Bankruptcy may be right for you.