Filing for Bankruptcy, The Right Time to File
The choice to file for Bankruptcy is definitely a difficult decision. However, for some individuals, there comes a point where it is no longer an option, but rather a necessity. There comes a point where your current financial situation is more burdensome than any potential future impact that filing for bankruptcy will have on your credit score or future ability to get a loan. Although bankruptcy will impact your credit score and your ability to obtain a loan, the general impact is usually vastly overstated by companies and individuals attempting to sell you a service purporting to help you avoid filing for bankruptcy.
Filing bankruptcy should only be a final resort when all other reasonable options have failed. It is important to state exactly what are and aren't reasonable options. Reasonable options don't typically include debt settlement. Debt settlement is a process where a person agrees to quit paying their debts and, in exchange for a fee, a company or individual promises to negotiate with all the creditors on their behalf. While there are some legitimate individuals and corporations within the debt settlement business, ask any bankruptcy attorney and they're going to inform you that the success rate for debt settlement is very low. Besides the enormous failure rate for debt settlement, it could wind up being more expensive than simply filing for bankruptcy and the impact on your credit could be worse.
But when should you consider filing for bankruptcy?
One indication that you could be ready to file bankruptcy is when you're borrowing money from one credit source to pay another credit source. Taking cash advances and/or using credit cards to pay for normal everyday living expenses? Utilizing payday loan companies? Maybe you have stopped answering your phone or switched your phone number because all of the calls you receive are from bill collectors? Are there creditors that are threatening to sue you? Have your creditors already taken some type of legal action against you? Lawsuit? Garnishment? These are all indications that you might be in serious financial trouble and need to, at the very least, explore the possibility of filing for bankruptcy.
After you have decided that you need to file for bankruptcy, you have to make a decision as to what sort of bankruptcy you should file for. The most typical forms of bankruptcy for people are a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy. With a Chapter 7 Bankruptcy, you will find that it will wipe all your debt clean, with some limited exceptions, and it'll also grant you an immediate fresh start. In a Chapter 13 Bankruptcy, you are going to be required to make payments for 3 to 5 years to be able to obtain your discharge. You should speak to a qualified bankruptcy attorney in order to see which bankruptcy chapter is right for you.
Bankruptcy should be a last option, but you do not want to delay filing for too long believing that there is going to be some type of miraculous turn around. Just be sure you have evaluated your financial position from a realistic perspective. Talking to a bankruptcy attorney sooner, rather than later, is an excellent option as a bankruptcy attorney can tell you rather quickly if filing for bankruptcy isn't your best option. A qualified bankruptcy attorney can also inform you what options that you may still have available to you and where you can go to get help if you do not file for bankruptcy.
Filing bankruptcy should only be a final resort when all other reasonable options have failed. It is important to state exactly what are and aren't reasonable options. Reasonable options don't typically include debt settlement. Debt settlement is a process where a person agrees to quit paying their debts and, in exchange for a fee, a company or individual promises to negotiate with all the creditors on their behalf. While there are some legitimate individuals and corporations within the debt settlement business, ask any bankruptcy attorney and they're going to inform you that the success rate for debt settlement is very low. Besides the enormous failure rate for debt settlement, it could wind up being more expensive than simply filing for bankruptcy and the impact on your credit could be worse.
But when should you consider filing for bankruptcy?
One indication that you could be ready to file bankruptcy is when you're borrowing money from one credit source to pay another credit source. Taking cash advances and/or using credit cards to pay for normal everyday living expenses? Utilizing payday loan companies? Maybe you have stopped answering your phone or switched your phone number because all of the calls you receive are from bill collectors? Are there creditors that are threatening to sue you? Have your creditors already taken some type of legal action against you? Lawsuit? Garnishment? These are all indications that you might be in serious financial trouble and need to, at the very least, explore the possibility of filing for bankruptcy.
After you have decided that you need to file for bankruptcy, you have to make a decision as to what sort of bankruptcy you should file for. The most typical forms of bankruptcy for people are a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy. With a Chapter 7 Bankruptcy, you will find that it will wipe all your debt clean, with some limited exceptions, and it'll also grant you an immediate fresh start. In a Chapter 13 Bankruptcy, you are going to be required to make payments for 3 to 5 years to be able to obtain your discharge. You should speak to a qualified bankruptcy attorney in order to see which bankruptcy chapter is right for you.
Bankruptcy should be a last option, but you do not want to delay filing for too long believing that there is going to be some type of miraculous turn around. Just be sure you have evaluated your financial position from a realistic perspective. Talking to a bankruptcy attorney sooner, rather than later, is an excellent option as a bankruptcy attorney can tell you rather quickly if filing for bankruptcy isn't your best option. A qualified bankruptcy attorney can also inform you what options that you may still have available to you and where you can go to get help if you do not file for bankruptcy.
Source...