How Do You Know If It's Time to File Bankruptcy?

If you’re struggling with debt, bankruptcy has the potential to be an excellent means of escaping it. However, filing bankruptcy is a decision that must be carefully considered. So, how do you know if bankruptcy is the right choice for your present situation? There are three questions you should ask yourself before proceeding with filing.

Is this the only option?

For those struggling with severe debt, the answer is yes. But, bankruptcy is not always the only alternative for everyone. Debt consolidation, credit counseling and refinancing are all potentially viable methods of ridding yourself of debt. It’s important to learn about all of your options before deciding on bankruptcy, and from there, you must consider which type of bankruptcy is right for you. This decision is one that’s best made with the help of an experienced attorney.

Am I prepared to file?

Before filing for bankruptcy, certain measures have to be taken. For instance, you will need to complete a credit counseling program within six months of filing. Additionally, you will need to have your financial information in line. Do you have all the exact figures regarding your income, expenses, assets and debts? If not, now’s the time to get your ducks in a row, so to speak. Lastly, you will need to determine how you plan to pay for bankruptcy proceedings. Simply filing for bankruptcy costs debtors a significant sum of money, something many people don’t realize.

What is my plan going forward?

With bankruptcy, it’s extremely important to think long-term so that you don’t find yourself stuck in financial distress again in the future. Before filing, consider how you will change your borrowing and spending habits from that point on. There may be some debts that won’t be wiped away in bankruptcy, and that means you will have to assume responsibility for their payment post filing. Additionally, you will need to determine how you will cover your debts going forward. This will require creating a budget, and more importantly, sticking to it. This process will be different for everyone depending on each specific situation upon filing, but it’s something that everyone needs to think about.

If you’re contemplating filing for bankruptcy, your first step should be calling the experienced Boynton Beach bankruptcy attorneys at Kelley Kaplan & Eller. The help of an attorney is extremely beneficial when determining if bankruptcy is the right course of action.