3 Reasons to File Bankruptcy
There are few things as frightening as financial struggles. Not knowing where your next paycheck is coming from or when it’s coming, facing threats from bill collectors, knowing that foreclosure of your home could be on the horizon, and all of the other things that can arise when money is tight creates constant stress. It can leave you feeling desperate and unsure of where to turn.
Luckily there are options, but it’s important to understand those options before you act.
For some people who are struggling financially, assistance might be available through a consumer credit counseling program. This can be helpful if you are having a difficult time meeting your minimum payment obligations on credit cards. Credit counseling programs can work with lenders and help you arrange payments you can afford. This also prevents debt from accumulating at a rate that makes it impossible to ever repay.
If credit counseling is not an option or doesn’t provide enough to help you get back on track, your best bet might be to file for bankruptcy. Sometimes debts are just too far out of control to have any hope of ever catching up on them without taking drastic action.
Keep in mind, bankruptcy will negatively impact your credit score, but so does out-of-control debt. In the long run, bankruptcy might have less of a negative effect on your financial life than allowing debt to go unchecked for too long.
If you are considering bankruptcy but you’re not sure what to do, consider why it might be your best choice:
1. You’re Unemployed with No Job Opportunities on the Near Horizon
Trying to find work without any success is one of the most common reasons people eventually turn to bankruptcy. Filing can help you eliminate credit card debt and several other types of loans. It might even be possible to protect some of your assets when you file for bankruptcy. You’ll be limited regarding your bankruptcy options if you don’t have any income without a job, but filing can help you free up funds and be able to afford your daily living expenses when you are unemployed.
2. You Have Medical Debt that Can Never Be Repaid
Medical debts are another common reason people turn to bankruptcy. In many cases, medical debts are so high they are insurmountable and the average person will never be able to pay them off. This is often the case when a person is faced with a catastrophic illness or injury. If there is no way to negotiate a repayment plan to make it possible to repay the debt a little at a time, bankruptcy can help you eliminate the debt entirely.
For more information about how filing for bankruptcy affects medical debt, check out this article from The Balance.
3. You are Permanently Disabled
If you are unable to work and are forced to live on a reduced income, it’s easy for debts to pile up. This is especially true if your permanent disability was not something you anticipated. Bankruptcy might be able to give you a fresh start and help you make your current living situation more affordable.
Regardless of why you are struggling financially or what led you to consider bankruptcy, it might be your best option. For more information or to speak to a bankruptcy professional who can help you make the best choice, contact the Law Office of Robert M. Geller at (813) 254-5696.