There are times when a person has no choice but to declare bankruptcy, and the decision to file will not be a very challenging one at all. However, bankruptcy considerations are often accompanied by emotional stress and strain on personal relationships. Your life is not a theoretical situation. You must ask yourself: Is bankruptcy the best option for me?
If you honestly foresee no improvement in your ability to repay your debt, strongly consider discussing your options with a bankruptcy lawyer. If you are treading water or your financial situation is getting worse, you must ask yourself some tough questions. Your financial condition will likely not get any better in the future unless you actively seek to change it in the present.
The Bankruptcy Analysis
Your must first determine if you qualify to file bankruptcy or not. If you have enough income to repay your creditors, you may not qualify for Chapter 7 bankruptcy. A full financial analysis includes examination of your current and prospective income to determine your status according to the means test. If you do not qualify for Chapter 7 bankruptcy, you may want to consider filing a Chapter 13 repayment plan.
Bankruptcy will discharge most unsecured debts. But you may be stuck with other types of debt post-bankruptcy, including student loans, secured debts, and tax liabilities. Moreover, if you are unemployed or have very low debt, you may want to try to envision where you expect to be six months from now.
Bankruptcy has distinct downsides, which you should discuss thoroughly with your attorney. A bankruptcy will appear on your credit report for the next 7 to 10 years. And it can sometimes make it harder to buy a home or car, or obtain other forms of credit. Nonetheless, the ability to walk away from financial obligations with your life largely intact often outweighs the potential downsides.
So is bankruptcy the best option for me?
Bankruptcy is an excellent option if you are having trouble making ends meet. But it’s also important to realize that you may have other options, too. If bankruptcy isn’t a good solution for you, a good bankruptcy attorney will let you know.
Take the time to focus on and consider all of your financial options. Schedule a free, confidential consultation with an experienced bankruptcy attorney. When considering your options, adopt an approach that combines attention to detail in the short-term within the context of your long-term financial goals.