Many households in this country are struggling with debt, and weighing their options for relief. When facing severe indebtedness, could bankruptcy be a viable way forward? For many households, individuals, and businesses, the answer is likely “yes.”
The reality is that many people view bankruptcy as a last resort, to be taken only when your back is up against the wall. Part of the reason for this is that there are many myths and misconceptions out there about bankruptcy, which have given the process a bit of a bad rap over the years.
When handled well, bankruptcy can help relieve people or companies of some debts and restructure others,allowing you to once again function in society and participate in the economy. In many cases, filing for bankruptcy is a way to hit “refresh,” allowing you to breathe for a moment, then move forward with fewer financial burdens.
In short, bankruptcy may be a way to attain the financial restart that you both need and deserve. But, with all that being said, how do you know if it’s a viable choice for you?
Here are a few signs that it may be time to consider bankruptcy:
1.) You Can’t Pay Your Bills On Time
If your debts and other financial obligations have become too much to handle on time, it may be worthwhile to consider pursuing bankruptcy as an option. In particular, bankruptcy may be a viable course for relief if you find yourself:
- Frequently missing payments
- Relying on credit cards for everyday bills
- Taking on more loans to cover existing debts
- Unable to meet minimum monthly payments
2.) Creditors Are Taking Steps to Collect Their Debts
Are your creditors accelerating their efforts to finally collect on your debts?
In many cases, failing to pay your debts on time will result in your case being turned over to a debt collection agency. Over time, if that collection agency is not making progress, the steps may be taken to file a lawsuit, in order to force collection. Debt collection lawsuits can be incredibly complex and costly. Bankruptcy, in contrast, can offer protection from creditors, and help restructure or discharge many of your debts.
Similarly, it may be time to seriously consider bankruptcy if you are facing foreclosure on your home or vehicle. When you face the very real possibility of losing your home, it’s worth discussing your options with a legal professional. Bankruptcy may be one viable course of action, as certain types will allow filers to keep their assets, while taking steps towards restructuring or paying down their debts.
3.) Your Financial Situation Seems Unlikely to Change
Now and again, many people fall on hard times. It’s a part of life. Bankruptcy may be an option if that “light at the end of the tunnel” doesn’t seem likely to come any time soon.
For instance, if you find yourself in a situation where your income is unlikely to increase to a level where you can get a handle on your debts, if your balances continue to increase even when you make payments, or if it seems unlikely that you’ll be able to pay off debts within five to seven years, bankruptcy may be a way to get a financial “jump start,” and move into the future on surer footing.
4.) Your Debt Is Affecting Other Aspects of Your Life
It is not unheard of to fret about money every now and again. But for many people dealing with indebtedness, financial concerns can spill over, and begin to affect many other aspects of daily life. If your concerns about debt or your financial picture are affecting your physical health, causing you to be unable to sleep or eat, or putting a strain on your personal relationships with friends and family, then it may be time to pursue a strategy for relief. Bankruptcy may be a way to help alleviate some of these heavy burdens, in the short-term and the long.
As you pursue a path forward, it’s important to learn all of the options available to you – and to determine if you qualify. For instance, for individuals, there are largely two types bankruptcy proceedings to be aware of, Chapter 7 and Chapter 13. Each will approach different debts in different ways, and has different standards for qualification.
For instance, the first measure in qualifying for personal bankruptcy is determining your household median income, and establishing whether or not it falls below the median income for Illinois households. If this applies to you, you typically qualify to file for Chapter 7 bankruptcy. Similarly, it’s important to understand what types of debt you have, and whether they constitute dischargeable debts – that is, which debts can be determined to be no longer your responsibility by bankruptcy court order, and which ones cannot be.
Bottom line? There are many different aspects that go into fully understanding your bankruptcy options, and making it through the prolonged proceedings successfully. Allowing an experienced attorney to step in may be one of the most important steps you can take, allowing you to understand every part of the lengthy bankruptcy process well enough to avoid losing assets that you prefer to hold onto.
At the Gunderson Law Firm, we will take all steps possible to protect you and your assets immediately and throughout the bankruptcy process, while also counseling you on realistic ways to avoid such serious debt issues in the future. Whether you are a business owner, a wage earner, retired, or otherwise, we can address your specific situation with strategic plans to help put severe indebtedness behind you so you can enjoy life again.
Have any questions? Want to keep the conversation going? Don’t hesitate to get in touch with the attorneys and staff of the Gunderson Law Firm for your free initial consultation.