Dealing with debt is like swimming in the ocean during a storm: sometimes you’ll just barely keep your head above water and other times you’ll be drowning in it.
If you’re struggling to make ends meet, then filing for bankruptcy can seem like a life jacket, your last hope for financial survival.
However, filing for bankruptcy is not an easy decision, as it can have a dramatic impact on the way you live your life. Before filing, you should ask yourself the following questions:
Are You Eligible to File?
In order to file for bankruptcy, you must first be eligible. Your debts must be less than $250,000 (excluding your mortgage), and you must be unable to pay these debts when they are due. Your income needs to be stable, so you can eventually pay off your debts to creditors.
Will Your Situation Improve?
Debt may be a scary situation now, but imagine yourself 5 years in the future. Do you see yourself with a better paying job? Is your hardship only temporary? If so, you might want to hold out for a bit longer before filing.
Bankruptcy helps many individuals reboot their lives and have a fresh, clean start. However, some individuals who file bankruptcy fall into their old habits and make the same mistakes, winding up in debt yet again. Consider what kind of changes you’d make if you were to file for bankruptcy and whether your situation will improve because of these changes.
Will Bankruptcy Handle All Your Debts?
Bankruptcy is ideal for handling unsecured debt, such as credit card charges and lines of credit. However, it does not cover student loans, tax debt, and legal bills. You will also be obligated to pay any mortgage, car loans, and liens you have.
Consider what assets and liabilities you have. If the bulk of your debt is unsecured it might be a good choice. If not, you may need to consider other options.
There Are Alternatives
If you carefully examined your situation and are in need of financial help, our staff at Faber can give you the advice you need to move forward. We understand how debt can be stressful and want to do everything we can to get you back on your feet.
Let Faber find the right solution for your debt and schedule a free consultation with one of our staff. Visit our website for more information.