5 Signs That Declaring Bankruptcy Could Be the Best Thing for You and Your Family

Monday, November 16, 2020, 6:00 AM | Leave Comment

One of the biggest decisions a person can make is to file for bankruptcy.

The bankruptcy process can turn your financial life upside down for years. In certain cases, it can remain on your credit for an entire decade.

Still, there are situations where individuals suffering under the crushing weight of debt feel that filing for bankruptcy is the only viable path forward.

Overall, many people may be confused on what to do. It’s a huge decision to make.

To help, below are five signs that declaring bankruptcy could be the best decision for you and your family.

5 Signs That Declaring Bankruptcy Could Be the Best Thing for You and Your Family

  1. A Lot of Your Debt Is Very Long Term

    Certain kinds of debt are worse than others. If your financial issues, like your bills, seem short term in nature, you’re probably going to have the ability to ride out the storm. In certain cases, credit counseling services may help you pay off that debt. However, if your financial issues are promised to go on for years and years without much hope of ever paying off what you owe, bankruptcy may be a good option.

  2. Your Savings Have Been Exhausted

    Your savings should be put towards large future costs, such as paying for your children’s college education or supplementing your retirement. If you have instead exhausted your savings to pay off creditors and are still not ahead, you have a serious issue. At that point, it may be a good idea to start over again through an actual bankruptcy process.

  3. A Bankruptcy Attorney Has Advised You to Do So

    If you are considering filing for bankruptcy, you should talk to a professional. A bankruptcy attorney with years of experience should be able to examine your situation and give you good advice on how to best proceed. Filing for bankruptcy is not the best option for everyone, but it may be what you need. Your lawyer should also be able to tell you which form of bankruptcy, either Chapter 7 or Chapter 13, you would likely be able to use.

  4. You Are Using Loans to Pay Off Your Bills

    If you are already deep in debt, one of the smartest things you can do is to stop accruing more debt. However, if you don’t have the ability to pay your current bills, you may be forced to create even more debt by taking out loans to make those deadlines. Such a situation is absolutely untenable, and you may be better off going through the bankruptcy process in court than continuing to take on increasingly larger financial burdens.

  5. You Could Lose Your House

    One of the benefits of most forms of bankruptcy for individuals is that they allow you to retain your primary residence. The house that you actually live in will not be liquidated during either a Chapter 7 or Chapter 13 bankruptcy. If you are in danger of having your home foreclosed on, bankruptcy may be the preferable option for your family.

Filing for bankruptcy is a huge decision that can impact your financial future for many years into the future. While you shouldn’t rush into the process, for people that just can’t crawl out from under a mountain of debt, going through the bankruptcy process may be the best choice for them and their families.

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