Bankruptcy can be a nightmare for many. Generally, it carries the connotation of complete financial ruin but it does not always have to be so. In many cases, filing for bankruptcy can save you from complete financial ruin and can even help get you back on your feet.
Financial advisers suggest that when someone that does not have enough money to pay their bills, then they should file for bankruptcy. It is important to face bankruptcy early on to start over. Think about all those unpaid mortgages, credit card debts, and car loans. One should have an idea of when to file for bankruptcy and this post will help ensure that you do. However, it is wise to hire a bankruptcy attorney such as a Barrington, Illinois Bankruptcy Attorney to explore all your options. Having a bankruptcy attorney working for you early on will ensure that you do not experience serious financial difficulties. The following indicators will let you know when it is time to file for bankruptcy.
Personal Assets Are At Risk
If you find yourself far behind on all payments such as auto, house and other loan payments when facing repossession, filing for bankruptcy might be the best option. A bankruptcy attorney can help create a plan for repayment of delinquent debts so that you keep possession of the assets. One can stave off repossession or foreclosure of their assets as long as they stick to the new repayment plan.
Long-term Cash Flow Crisis
Cash flow issues when it comes to personal finances are extremely common. You might have been fired with no prospects in the future, or gone through a nasty divorce that does not offer any income. You may have been put on disability or have plenty of outstanding medical bills to pay.
Any of the conditions or a combination of these could lead to serious cash flow issues. If you find it difficult to make ends meet, even when you impose a strict budget, then it might be time to file for bankruptcy. By filing for bankruptcy, you will have better control of your financial obligations until cash flow problems can be resolved.
Wages Are Garnished
Wage garnishments are done when creditors take a chunk of the paycheck directly from the employer to cover a debt you owe. Wage garnishment is quite common. When it comes to wage garnishments, you have rights and that is why it is important to have a bankruptcy attorney help protect your rights. By filing for bankruptcy, you will be provided with an automatic stay as long as it is not used to prevent garnishment from domestic support obligations such as child support or alimony.
Several Bills Are In Default
There is a possibility that you have been unable to pay many bills. It is important to look at your finances. If your mailbox starts to overflow with overdue bills, it might be time to consider filing for bankruptcy through an attorney.
Financial counseling should also be considered to cover or refinance the defaulted bills. Your attorney might recommend that you file for bankruptcy if you do not have enough income to make payments.
A great thing about bankruptcy is the fact that it will dismiss most of the unsecured debts. It means all those medical bills, personal loans, and credit card debts would be eliminated. Thus, you will get a fresh start. It is your best bet if there are many unsecured debts.
Maxed Credit Cards and Zero Savings
Anyone struggling with cash flow issues might find themselves blowing through their savings no matter the reason and relying on credit cards for the payment of bills. It might offer some temporary relief when working on clearing the cash flow issues. However, if there is no solution for obtaining more money, then it would only lead to greater debt repayment issues.
Taking of Loans for Payment of Bills
In certain cases, it is possible to take out personal loans as a solution to cash issues. If you find yourself low on cash, then getting a loan might be the only option. But, it is not the best one. Remember, personal loans tend to have high-interest rates and the repayment terms can be inflexible. If you know that you would be able to repay the loan before it is due, you can proceed with obtaining a loan as it is a good way to control finances. However, if there is no money to pay for the money borrowed in the future, then you will need to look into bankruptcy options.
Debt Collectors Start Pursuing You
When you default on your loans, the creditors will come after you. Often, creditors might threaten to take legal actions against you if the debt remains unpaid. Creditors that sue and win the case will be able to the legal authority garnish your wages. Thus, you might yourself in more financial stress.
The best course of action would be to take the legal route. The bankruptcy attorney will advise you to claim bankruptcy. It will allow creditors to know that you cannot afford to make any more payments. Further financial problems will be taken care of
Have a Solid Plan for the Future
Chances are that you have gotten an idea of why filing for bankruptcy is the best decision. Declaring bankruptcy offers greater financial freedom. But, that does not mean that it is always a cure for everything. Moreover, you cannot rely on bankruptcy to help you out without an intention to make changes in your lifestyle.
You must understand that filing for bankruptcy is not an event but a process. Your future will be affected by what you do before, during and after the filing of bankruptcy. It only offers you a new goal to start a new financial life. Consult with an experienced bankruptcy attorney before filing for bankruptcy. The attorney will advise you on which route to take. Having an attorney by your side will help ensure that the best outcome is achieved.