4 Circumstances That May Mean It Is Time to File Bankruptcy

Are you struggling financially? Do you find it difficult to make ends meet each month? You are not alone. Millions of American families are living paycheck to paycheck and have a lot of debt.

It is not the American dream to live this way. But, unseen circumstances such as illness, job loss, and the economic downturn has led many Americans to their financial ends. Their debts are growing and their means of handling them are not good.

As bad as the circumstances may seem there is hope for a financial fresh start. Bankruptcy could be the answer to your debt dilemma. It could provide a way for you to discharge your debts and begin rebuilding your credit.

You may be unsure if it is time to file bankruptcy. It is a big decision to make. But, if you are dealing with one or more of the circumstances discussed below filing bankruptcy could help your financial situation.

  • Behind On Mortgage And Car Payments

If you are behind on your mortgage or car payments, you face the danger of losing your property. Your mortgage or car loan holder may be ready to start foreclosure or repossession. A part of bankruptcy known as the automatic stay could help you delay the process and give you a chance to catch up on payments. Also, under a Chapter 13 bankruptcy plan, you could qualify to pay reduced rates on the loans. It is also possible that junior liens on the property could be eliminated.

  • Wages Being Garnished

Is your financial situation at the point where a creditor or creditors have sued you and are having your paycheck garnished? This can be a stressful circumstance, but filing bankruptcy could help. As soon as you file bankruptcy, the automatic stay goes into effect. This halts any creditor lawsuits and wage garnishments until your bankruptcy claim is processed. It is possible the debt which caused the wage garnishment could be completely eliminated or subject to a reduced payment plan.

  • Extensive Credit Card Debt

Have you had to turn to credit cards to pay for everyday living expenses and bills? Has doing this racked up extensive credit card debt you can’t seem to get a handle on? You may have felt that using the credit cards was the best or only option and believed you could handle minimum monthly payments. But, over time the “minimum” amounts became larger. And, you may have even seen an increase in interest due to missing payments. Since most credit cards are considered unsecured debt, they are eligible for discharge in bankruptcy. If you file for bankruptcy, your credit card debt could be completely eliminated or you could pay it back over time at a reduced rate.

  • Major Medical Debt

One of the most difficult financial circumstances to be in is having major medical debt. The situation occurs out of nowhere when you become ill or disabled. You have no choice but to seek medical treatment. Even if you have health insurance, deductibles and co-pays can reach staggering amounts especially if your health situation is long-term. If you have had a health crisis that has caused you to build up major medical debt, bankruptcy could be a good option for you. Medical debt is also considered unsecured and is dischargeable through bankruptcy. This means you could eliminate all your medical debt or pay it back at a reduced rate. You could be free of the financial burden and concentrate on your health.

If you are dealing with any of these financial circumstances, bankruptcy could be the answer to your problems. To know for sure how bankruptcy will affect your financial situation you should contact one of our bankruptcy attorneys for a free evaluation. Everyone’s financial circumstances are different and bankruptcy laws can be complex. But, our attorneys will work with you to help you find the best possible solution.