Should I file or should I wait?

That’s a question many of those contemplating filing bankruptcy may ask themselves. They struggle with their finances and wonder if filing bankruptcy could be the needed answer to their financial issues. But, they are afraid to take the step, unsure if it is the right time for them to file bankruptcy.

Are you struggling financially and wonder if you should file bankruptcy? If any or all of the following circumstances apply to your financial situation, it might be time to file for bankruptcy.

Wage Garnishment

Do you have creditors that have or are threatening to collect the debt you owe them by garnishing your wages?

Studies have found that once you fall seriously behind on your debt (with one or more accounts 120 days overdue) financial troubles escalate with debts being put into collections and court judgments. But, those who file bankruptcy can benefit from its “automatic stay,” which is a court order halting almost all collection efforts by your creditors. This includes wage garnishments. Then once the underlying debt gets discharged or erased at the completion of the bankruptcy, the threat of garnishment ends.

Foreclosure and/or Car Repossession

Are you behind on your mortgage payments and in danger of foreclosure on your home? Are you underwater on your home mortgage, meaning you owe more on it than it is worth? Are you late on your car payment and your lien holder may come to repossess it?

Bankruptcy considers debts owed for homes and vehicles as “secured” debts. This means the lien holder has the right to reclaim or repossess the property if you are behind on payments. You can speak with your debtor and try to work out an adjusted agreement, but if this does not work, bankruptcy could be your best option to protect your property. The bankruptcy automatic stay can put a temporary hold on any foreclosure or repossession activity and, depending on your financial situation, bankruptcy offers many ways to help you pay the debt without losing your property.

Increasing Credit Card Debt

Do you have large credit card debt that you can’t pay or can only pay the minimum amount? Are you using credit cards to pay off other debts?

Credit card debt can seem harmless at first but can grow out of control easily. You may think you are handling it by just making the minimum payments, but if you have multiple credit cards, this can lead to a snowball effect of debt. Then, if you start paying other debts with your credit card, you’re only digging yourself deeper into debt. It becomes a vicious cycle. Filing bankruptcy could help you break that cycle. Bankruptcy considers credit card debt as “unsecured” debt and bankruptcy can usually erase most unsecured debt.

Jeopardizing Retirement Funds

Have you or are you thinking about dipping into a retirement account to pay overdue bills?

At first, this may seem like an ideal solution, but you may want to think twice before you turn to retirement funds to pay your current debts. Yes, you would be paying today’s debt, but you would do it by jeopardizing your financial future. However, by filing bankruptcy, you could get a handle on your debts and protect your retirement funds at the same time. Most states protect retirement funds like pensions, IRAs, 401(k)s, and even life insurance in bankruptcy.

Getting Help Filing Bankruptcy

Many people let the misinformation they have heard about bankruptcy delay them from considering filing, but bankruptcy can be a smart financial choice in certain circumstances. Bankruptcy can give you a financial fresh start and bring needed peace of mind by relieving you of financial stress. If you feel burdened by debt, don’t keep carrying the load on your own.

Contact Brock & Stout’s bankruptcy attorneys for a free evaluation to see if bankruptcy is a good choice for you. We have over 25 years of experience helping clients gain financial freedom and would love to have you and your family.