Clues Indicating You Would Benefit From Bankruptcy
Do you live paycheck to paycheck, always planning on starting a savings account, but never able to? Just as you think you are caught up, your car transmission needs work or you need new tires. It is just one thing after another until you feel like you have fallen into a hole and will never be able to crawl your way to the top. If this comes close to describing how you feel, it is time to assess your overall financial situation. This is likely something you avoid, as the cliché goes, like the plague. But, it is important for you to honestly ask yourself these questions.
- Do you avoid answering the phone if the caller I.D. shows either an unknown caller or a company or business to whom you owe money? If this happens to you, you have a problem. Collectors do not normally call unless your payment is at least 30 days overdue.
- You are receiving calls and mail from debt collection agencies.
- Your use your credit cards for everyday items at the drug store or even for groceries.
- Your credit cards are maxed out and you only make minimum payments every month.
- You apply for a new credit card, hoping to use it to buy essential items.
- You avoid going to the doctor because you have not paid your portion of a large medical bill.
- You have received either an eviction notice from your landlord or notice of foreclosure from your mortgage lender.
- You have no emergency funds available.
Bankruptcy may be your answer. You are not alone. Nearly one million people in the U.S. filed bankruptcy petitions in 2014. There are two types of bankruptcy: Chapter 7 and Chapter 13. The one that will best meet your needs will depend on the type of your debt. Whichever chapter you file under, on the day you file your petition in the bankruptcy court, all collections from all collectors must stop.
Chapter 7 Bankruptcy: The “Fresh Start” Chapter
Not all debt is discharged in Chapter 7, so it is important to evaluate the types of debt under which you are buried. Chapter 7 may be the solution for you If the majority of your debt consists of:
- Medical bills.
- Credit card debt.
- Any unsecured loan, even loans to relatives.
- Past due rent.
- Delinquent utility bills.
- Income taxes that are more than three years old (there may be some qualifying requirements).
Chapter 13 Bankruptcy: Reorganization Bankruptcy
If you have just gotten behind and feel like you can catch up if you just have enough time, and you have enough money to provide for your daily needs, this may be the right approach for you. You put together a plan for repaying a percentage of your debts over three to five years. If you follow the terms of your repayment plan, at the end of the period, remaining debts will be discharged.
If you are considering bankruptcy, contact one of our attorneys at Brock & Stout for a free case evaluation.