These are hard economic times and thanks to the American credit card culture of spending first and paying later, everyone could at one time or another find themselves at crossroads where they would have to make some hard choices. When one cannot meet their debt obligations on time, sometime they are advised to file for bankruptcy so that they can start rebuilding their financial life again on a clean slate.
Why you may be unable to meet your debt obligations
Loss of employment through sacking or retrenchment, disease that ravages the family finances, divorce and many other situations could leave you unable to pay your debts. In such a situation, to save yourself from the hounding of the creditors, it is just better to opt to file for bankruptcy.
When many people hear about bankruptcy, they have many questions on their mind. One of them is whether bankruptcy is really good for them. The answer is yes and no – yes because it will give you an opportunity to wipe your indebtedness clean and start afresh and no because it will leave a financial and personal blemish that will stay with you for even more than years. In many cases, you will have to rebuild your credit history from scratch. But don’t worry, many people, even business and corporations have filed for bankruptcy before.
How do you know when to file for bankruptcy
This is another questions that many people who are hounded by debt ask. There are many indicators but the most common one is when you are not able to pay your credit card bills on time.
Have you started getting calls from your creditors? Then it means that you are late paying bills and that you cannot hold your end of the bargain, or at least you have not been able to. The picture just gets worse if you start receiving calls from debt collectors because it means that your creditors have turned the job over to them to claim their money for them. Usually, at this point, you will actually welcome filing for bankruptcy with open arms because it will protect you from the hounding of the debt collectors.
When you cannot keep track of your debts
Has it reached a point where you feel that you have lost track of your debts and cannot even say how much you owe? That is very serious. It means that you owe too much such that you do not know from where to start following up with payments. What you need at such a time is to file for bankruptcy so that you can access debt consolidation services, to at least keep a tab on all your debts.
Do you utilize credit cards to purchase even the most basic of necessities? If you are always short on cash such that you swipe your MasterCard to purchase things like groceries, it is an indication that you simply are not able to keep your spending within your monthly budget.
You should hire a bankruptcy attorney
These are just a few of the questions that you need to answer before you can file for bankruptcy. Of course, there are many more indicators of inability to meet your debt obligations. It is best to analyze your debt situation so that you can know what type of bankruptcy to file for. There are two – chapter 7 or chapter 13. There is also chapter 11, which is best for businesses.
There is a lot of paperwork and legwork that is involved if you want to file for bankruptcy. That is why you need to hire the services of a bankruptcy lawyer so that he/she can assist you. In addition, whether you owe your creditors or not, you still have rights and only a lawyer can ensure that the creditors do not violate them. For example, do you know that debt collectors are not supposed to call you at odd hours? Of course, once you file the bankruptcy petition, all creditors will be put on hold.