5 ways to know bankruptcy is the right choice
1.You are being sued over a debt, evicted or foreclosed or have the car repossessed.
This is when red lights should be flashing. The creditor has exhausted all of its patience to settle the debt or make a payment arrangement and is going to evict you, take the house or take your paycheck to pay off the debt. Maybe all 3.
2. Can you resolve, either pay off, or settle, the debt that is most pressing in the next 6 months.
If you can resolve the most pressing debt in the next 6 months, you should do it. Use the money you would spend on a lawyer to do that. However, if you can’t, the likelihood is that in 7 months or 12 or 24, you will be in the same position, You will never get that time back, better to make the move now and get your life back.
3. I can’t make the monthly bills on the income I have right now and I can’t cut any bills.
If you can’t pay the monthly bills, rent/mortgage, car, food, day care, etc., on the income you have right now, you should use bankruptcy to get rid of some debts and also adjust the amount you pay for the monthly necessities (yes bankruptcy can do that). Bankruptcy laws let you reduce the amount you pay for your mortgage, car or other stuff so you can use that money for other necessities every month.
4. You are deciding which bills to pay and which to not pay each month.
This is called robbing Peter to pay Paul. In the end both Peter and Paul get tired of it and come after you by evicting, foreclosing, seizing cars or paychecks. It can't go on. See number 1 above.
5. The stress from bills is affecting your mental or physical health and affecting your relationships with the people in your life.
See everything above. If you are worried all the time, afraid to answer the phone or check the mail and snapping and irritable with the people you love, it has to stop. Now. You get only so much life, and only so much with the people you care about, and you are letting debt take that time, and not doing anything to reduce the debt.
Bankruptcy can help you with a lot of types of debt. Taxes, student loans, credit cards, mortgages, car loans, rent, alimony, child support, fines penalties, and just about anything you can think of. Bankruptcy can either eliminate it or force the creditor to accept an affordable payment plan. You do not have to get a 2nd job or decide between groceries and car payments. Yes it will be on your credit report, yes, you will be able to get credit when it is over, and maybe while you are in bankruptcy. Your credit score might even be better after you finish your bankruptcy. But if your credit score is even a part of your decision if you answered any of the 5 questions yes, you probably need to assess your priorities. I don't recall anyone’s credit score being written on their tombstone. I do recall inscriptions about loving families.