Understanding When It’s Time To File For Bankruptcy

Ft smith auto accident lawyer
Are you considering the option of filing bankruptcy to get out from under the debt that has been haunting you for years? If so, you aren’t alone. Thousands of people file for bankruptcy every single day, but coming to the decision to do so can be difficult. There is no perfect solution to decide whether or not filing for Chapter 7 or Chapter 13 bankruptcy is right for you or not, but there are a few questions you can ask yourself or local bankruptcy attorneys to help make the decision that much easier. Below are just three of those questions:
1. What is the Severity of the Debt? – One of the first questions you need to answer in order to decide whether or not filing bankruptcy would benefit you is how severe your debt is. Bankruptcy attorneys will typically say that if you have less than $2000-$5000 worth of debt, then you may be able to just use money management tools to overcome it in a couple of years. If you have over $5000 in debt, then filing bankruptcy could absolutely be a help to your future. If you cannot see yourself paying off the debt you currently have in two years or less then it may be worth making an appointment with a bankruptcy lawyer to talk over how filing a case of your own could help.
2. What Type of Debt Are You Struggling With? – Bankruptcy law is written in such a way that it breaks debts into two categories: those that can be erased through a bankruptcy and those that cannot. The debts that can be erased are known as dischargeable debts and the others are known as non-dischargeable debts. Two of the most common dischargeable debts that cause people to file bankruptcy are credit cards and medical bills. In fact, Harvard University conducted a study that showed that over 60 percent of all personal bankruptcies in the United States today are caused by medical expenses. If you are struggling with debt that is able to be erased by bankruptcy such as child support, alimony, and some municipal debts, then you may want to consider other financial options.
3. What Would Your Bankruptcy Look Like? – Depending on the financial situation you are in, how many assets you have, and which type of personal bankruptcy chapter you are eligible for, the case may become complex. Bankruptcy attorneys will require certain documentation from you like pay stubs and tax returns in order to fill out the mandatory bankruptcy court forms, and in order to file your case you will also pay a filing fee to the court itself. Currently, the filing fee for a Chapter 7 bankruptcy is $335, and the cost for a Chapter 13 case is $310.
If you decide to file bankruptcy, make sure and do so with the help of bankruptcy attorneys who have experience with the particular state laws you are filing in. Research shows that the success rate for debtors who file for bankruptcy by using an attorney is 95 percent for Chapter 7, which is the most commonly filed. Ask yourself the questions above about the debt you are in and if you decide that filing bankruptcy may be able to help, you could be in a drastically different financial place in just six months to a year.