Bankruptcy is often viewed as a last resort. It is not until there are no other options and a person is desperate that he or she approaches an attorney about filing for bankruptcy. Unfortunately, this is not always the ideal scenario. Waiting until creditor harassment is out of control and your hands are tied can make your situation worse. Taking control of things through bankruptcy sooner rather than later can actually make the process easier and improve your financial well-being in the future. How can you plan ahead and choose the best time to file for bankruptcy?
Be Honest about Your Finances
Too many people ignore financial struggles until those struggles no longer can be ignored. If you suspect you are headed toward financial disaster, take some time to review your monthly budget. Calculate your income, your debts, and your expenses, and determine how feasible it is to continue in your current situation and for how long. If you are consistently facing financial struggle, it might be time to explore your options.
Consider the Reason for Your Hardship
Now that you understand you are facing financial difficulties, consider why that is the case. Sometimes financial issues are the result of a temporary setback. For instance, an illness might have resulted in time away from work, so money is tighter than usual. A little belt tightening or loan from a friend could be enough to get you through a few weeks of financial strain.
However, if financial issues are more permanent and there can be no more trimming of the budget, bankruptcy might be your only option. If bringing your budget under control is not an option, bankruptcy provides a way to make a fresh start and get a handle on your financial future.
Evaluate Your Current Solution
Another important consideration when evaluating your budget is to think about what money you are using to meet your debts. If you are moving money from savings or retirement accounts on a regular basis to make ends meet, you could be setting yourself up for financial disaster. Liquefying funds can result in penalties and fees, which can set you back even more. You also run the risk of eventually running out of resources. Unfortunately, your temporary solution to pay your bills could end up making your problem worse in the long run.
Understanding when the time is right to file for bankruptcy is challenging, but it can make a big difference when it comes to repairing your financial situation. The “right time” is different for everyone and most people can use some professional advice when it comes to deciding what time is right for them.
If you would like to speak to someone about the timing of bankruptcy and why it is important for your financial future, we can help. Contact the Law Offices of Robert M. Geller at 813.254. 5696 to scheduled a consultation and discuss your bankruptcy options.