How Do I Know It Is Time To File For Bankruptcy? 

Filing for bankruptcy is always a last resort and is not something one would consider  when other repayment options are available.  However, when financial troubles seem to have no other solutions or you are overwhelmed with debt, bankruptcy is an opportunity to obtain a fresh start and get reestablished while gaining peace of mind and retaining your dignity. Knowing when bankruptcy is the right option for you is something you should consider with the help of an experienced bankruptcy practitioner.  It is not something you should try to determine on your own.  Find a practitioner who offers free consultations on bankruptcy matters and sit down with a professional and discuss your situation and your options, such as with the experienced bankruptcy professionals at Zellar & Zellar Attorneys at Law., Inc..  Zellar & Zellar offers free consultations on bankruptcy matter and all matters.  There are many important considerations for you and your attorney to review.   Here are some signs that it may be time to consider filing for relief under the bankruptcy code.

Paying Off All Debts Is Impossible or Improbable

One indicator that is may be time to consider bankruptcy relief if an analysis of your debts and the type of debt you have.  It may be  time to consider bankruptcy if paying off all debts has become impossible with the disposable income available at the end of the month. Once payment of the minimum payments becomes impossible, late fees, default rates of interest and penalty charges cause the debt to grow much faster than it is possible to pay it off.  The overwhelming debt is often caused by illness causing disruption or reduction or complete loss of income. If paying off the debt will take decades or longer, then bankruptcy is likely the only and best possible answer for a fresh start and relief from the debt.  Bankruptcy can restructure or discharge the debts making it possible to start over.

Creditors Are Threatening Legal Action or Filing Suit to Collect

If creditors are threatening legal action or have already filed a suit against you to collect a debt, then filing for bankruptcy is probably the best option to consider. Filing for bankruptcy will stop all pending lawsuits and litigation immediately because once a person files for bankruptcy relief, the Automatic Stay goes into effect stopping all creditor actions immediately, including harassing phone calls from pay day lenders.   The debts that are owed will be resolved through the bankruptcy proceeding. This can stop and  prevent creditors from obtaining a judgment against you, by stopping the litigation before a judgment is ever granted.  Also bankruptcy filings prevent the issuance of judgment liens which can attach to your real estate and are not removed nor discharged in the bankruptcy filing.  As a result, lien avoidance actions are required in the bankruptcy case to avoid the liens, at additional cost.  Thus, avoiding the judgment lien from ever being issued with a bankruptcy filing is the best way to avoid liens and save fees in the bankruptcy case.  Waiting too long to seek help from a bankruptcy professional such as the attorneys at Zellar is a mistake that is often costly.    You should consult with an experienced bankruptcy practitioner as soon as collection or litigation starts, in order to  determine what action is best for you in your situation.
No Income and No Savings

If you have had no income for an extended period of time, considering bankruptcy can be a wonderful option to discharge debts when collection ensues.   Going for some time without income means debts will build up to unreasonable levels. Even getting a new income might not solve the problem. It is usually a better idea to consider declaring  bankruptcy and start over fresh, debt free.

Wages Are Being Garnished

Creditors who obtain judgments against you can garnish your bank account and take all the money on deposit with no notice to you whatsoever.  Moreover, wages can be garnished for up to twenty-five (25%) percent of your net take home pay, or one quarter of your net income can be garnished from every pay check.  This often wreaks havoc on the monthly budget causing bankruptcy relief to become the best option, since often then a person can not pay for their needs or their children’s needs, nor pay for basic things like rent and food. If wages are being garnished, then filing for bankruptcy can help. Filing for bankruptcy can stop the wage garnishment and take care of the old debts. This makes it possible to start a new financial life without being burdened with debt.

Our House is Over Mortgaged or We Can No Longer Afford the House Payment

If you owe more on your house than it is worth, or you can not afford needed repairs, or you can no longer afford the house payment due to changes in income, bankruptcy is a great option to consider.  You can surrender the property in the bankruptcy process to the creditor and be relieved of the obligation to pay the mortgage personally, by surrendering the property to the creditor in the bankruptcy proceeding.  The creditor must recover the property and you are no longer responsible for payment of the debt.  Bankruptcy is a great way to be relieved of the obligation to pay for secured debts like houses and cars if you no longer wish to retain them.  Consult with an experienced bankruptcy professional such as the attorneys at Zellar & Zellar Attorneys at Law, Inc., in order to determine what options are available and best for you.

© Zellar & Zellar, Attorneys at Law, Inc., 2015   No distribution without prior permission of the author.