Deciding on whether or not you should file for bankruptcy is a tough call. Some may even tell you to declare bankruptcy only as a last resort. But before giving in to the stigma, consider all possible angles in approaching your financial issues.
The main reason why bankruptcy laws were even created was to provide debtors a chance at a fresh start. Unlike what most people think, bankruptcy is not a punishment for borrowers who were unable to handle their financial resources. In fact, the top reasons why bankruptcy declarations are considered by families is the loss of income and huge medical debt.
Factors Leading to A Bankruptcy Filing
If you find yourself in any of the scenarios described below, then you should think about filing for bankruptcy as one of your legal options.
- Sudden medical conditions. If you have an injury or health problem, it can be difficult or even impossible to perform any gainful activity. On top of that, you’ll have to worry about health expenses piling up due to your illness. If you file bankruptcy, you get a chance at discharging those medical bills as ordered by the bankruptcy judge.
- The threat of property foreclosure. The possibility of losing your home is scary. But if you consider filing Chapter 7 bankruptcy, you can temporarily stop foreclosure and even have unpaid mortgages discharged, or possibly keep your home permanently if you’re eligible for a Chapter 13 bankruptcy filing.
- Creditor harassment. If your lenders demand payments night and day and threaten to seize your most valued assets, then bankruptcy can give you the good night’s rest you wanted. How, you might ask? Through an “automatic stay”, which is an order issued by the bankruptcy court that requires all your creditors to stop collecting anything from you.
- Living on credit card payments. If you can afford food, medicine, clothing, and shelter only by maxing out your credit limit, or if you can only pay outstanding credit loans using another credit card, then declaring bankruptcy gives you a second chance with the possibility of wiping nonsecured credit card debts.
If you find yourself in any of the situations above, you’re a good candidate for a bankruptcy case. Before proceeding, ask yourself these questions: Is it possible to negotiate a reduction of the loan amount? Can I expect my financial status to improve anytime soon? Are there other sources of debt payments I haven’t considered? If you answered YES to most of these questions, then it might still be possible to take control of your situation. However, if your issues have been a major source of stress, then talking to a lawyer experienced in bankruptcy, such as those from Northwest Debt Relief Law Firm should be considered.
There are plenty of debt relief solutions to choose from, such as but not limited to filing bankruptcy, reaching out to an agency offering free credit counseling, considering debt consolidation or debt settlement, or researching debt management programs. Regardless of which direction you take, it is highly recommended to get advice from a legal representative who has worked with bankruptcy filings in the past.
How Northwest Debt Relief Law Firm Can Help
During a consultation with our bankruptcy lawyer, you will be guided in choosing the right type of bankruptcy to file, which are called Chapters. One popular option for personal bankruptcies is Chapter 7. This is intended for filers who are unable to pay loans due to a low income (defined as earning less than the median income in your State) and wipes out credit card debt, medical bills, lawsuits, lease obligations, and personal loans. For those with higher income, filing Chapter 7 can be done by passing a “means test” conducted by the court trustee through an examination of income sources and expenses.
If you do have a constant source of income, your lawyer may advise you to file a Chapter 13 bankruptcy, also called the “wage earner’s bankruptcy”. It gives you an opportunity to tweak the details of your current loan agreements and extend payments under a new repayment plan. If you are facing the possibility of foreclosure, it can also save your home. However, keep in mind that not all debts get discharged. Your student loan, unpaid child support or alimony, and taxes due will remain in your file.
Your bankruptcy attorney will also discuss with you what happens once your bankruptcy case is closed. This will cover your concerns about your credit score, credit report, future property purchases, making payments for non-exempt assets, and facing secured debtors. Though a bankruptcy option appears challenging, remember that its ultimate goal is to give you relief from your debts. Start your journey towards this goal by calling a law firm specializing in bankruptcy law such as the Northwest Debt Relief Law Firm. Schedule your free consultation with our bankruptcy attorneys and get a grip on your financial future.