If you're struggling financially, you might wonder whether bankruptcy is the right solution to your situation. Learn 5 common signs that it might be time to find an attorney and file for bankruptcy to solve your woes.
- You are behind on your mortgage - Once you fall behind on your mortgage, your home may be foreclosed by the lender. Before foreclosure happens, you might be able to file for Chapter 13 bankruptcy, which allows you to keep some assets.
- You're screening your calls for debt collectors - Are you afraid to answer the phone because debt collectors are calling daily? Or are you picking up, yet feeling overwhelmed and guilty because you can't pay your bills? Declaring bankruptcy halts debt collectors' calls.
- You underwent a major lifestyle change, such as divorce, loss of a job or a medical crisis - All it takes is one emergency to send someone living paycheck to paycheck into a financial crisis. If you expect to experience a major lifestyle change, or recently lived through one, you may be unable to pay down debt. A bankruptcy attorney can help you determine your best steps forward.
- You face lawsuits or wage garnishments - If you ignore debt collectors' phone calls but don't pay your debt, collectors may sue you. It's difficult to win a debt collection suit. If you lose, debt collectors may garnish your wages as the result of a legal judgment. This can leave you unable to support your family. Filing for bankruptcy places a stay on wage garnishment, which can help you figure out your options.
- You can't pay your bills, even if you sell your assets - Maybe you face a mountain of medical debt, got in too deep with credit cards, or are underwater on your mortgage. If you're not sure what to do, add up the total money you owe and your total assets - your bank account, car, home and other assets. If your debts exceed your assets, bankruptcy may be the best solution to your problem.
Bankruptcy can be confusing and stressful. Even though a lawyer does represent an expense, it's critical to hire an attorney when declaring bankruptcy, as he/she will look out for your interests and make sure you understand any commitments you make.