Signs You May Want to Consider Filing Bankruptcy
Life can be unpredictable. Unfortunate circumstances can leave people worrying every day if they will ever be able to pay off their debts. Many people struggling to make ends meet likely exhausted their savings and fear losing their homes. Others are afraid to answer their phone, dreading creditors or collection agencies are calling to ask about overdue bills.
If you can relate to one or more of these situations, you may wonder how to know if you should file bankruptcy. Many people like you wonder, “Should I consider bankruptcy?” The best way to answer this question is to talk to a knowledgeable bankruptcy lawyer who can assess your circumstances and explain whether bankruptcy may be the best strategy for you. Contact an experienced bankruptcy attorney from Sasser Law Firm for a confidential consultation.
When Should You Consider Filing Bankruptcy?
The decision to file bankruptcy can be a difficult one to make. However, there are usually some signs that bankruptcy may be the right answer. Here are ten signs when to consider filing bankruptcy:
1. You are facing foreclosure on your home.
If you are behind on your monthly mortgage payments, bankruptcy may be able to help save your home. A chapter 13 bankruptcy is an option in which you establish a repayment plan that provides up to five years to bring current delinquent payments and restructure other debts. Additionally, a bankruptcy petition may be able to stop the foreclosure process and buy you some valuable time.
2. Your vehicle is threatened with repossession.
Your vehicle is probably your lifeline. It helps you to get to work, take your kids to school, and attend medical appointments and other important functions. If you do nothing, your lender may be able to repossess the vehicle. However, bankruptcy may allow you to keep it and get your car loan payments back on track. Car loans can be reaffirmed during the bankruptcy process, which allows you to continue making your payments and keep the car
3. You are not making enough money to pay your debts.
You may also find yourself in the unfortunate situation where you have to skip a minimum monthly payment because you don’t have enough money to make all your payments. This is a stressful situation because you will then be charged late fees in addition to the interest. You may even be charged interest on the late fees. All this can dig you even deeper in the hole.
4. The Internal Revenue Service or North Carolina Department of Revenue is threatening to seize your bank account, wages, or other assets.
A bankruptcy filing may be able to pause enforcement activity against unpaid tax debts, including state and federal taxes. Some tax debts can be included in your chapter 13 bankruptcy repayment plan. So, if you owe money on unpaid tax debt, you may consider declaring bankruptcy.
5. Credit cards are used for basic necessities.
You may find yourself going from using credit cards just for emergencies to using them for everyday expenses, like gas and groceries. Over time, your debt can accumulate to the point where you can no longer afford to make the minimum monthly payment.
6. Your credit cards are maxed out
If your credit cards are now maxed out, you may not have any way to pay for your basic necessities. Additionally, with such a high credit/debt ratio, your credit score can go down significantly. You can spend the next 15 years trying to pay off those credits, or you can consider filing bankruptcy to get a fresh start. Because credit cards are unsecured debts, chapter 7 bankruptcy is one of the best debt relief options to deal with these outstanding debts. A bankruptcy discharge can eliminate all unsecured debt and give you relief from debt obligations so that you can focus on creating a better financial future.
7. You’re using cash advances to pay off balances.
Many credit cards offer a cash advance option where you can withdraw cash from your credit card account Some people start using these advances to pay off other cards and then using those cards to pay off still other cards. This can create a destructive (and costly) cycle that causes your credit card debt to balloon over time.
8. You’re considering using retirement money to pay off debt.
You might be considering using your retirement money to pay off high-interest debt. However, taking this action may have significant effects on your bottom line. You may not have time to make up the money you take out to pay for your retirement down the line. Also, when your money is used to pay off debts, it’s not growing. Additionally, you may be charged taxes hefty early withdrawal penalties. Under federal law, bankruptcy may be able to protect your retirement accounts.
9. Creditors are harassing you
If your creditors are not being paid, they may be calling you at home, on the road, and while at work. They may send you threatening letters. This can add significant stress to you during an already distressing time.
10. Creditors are suing you
If your creditors eventually sue you, they may be able to get a judgment against you for the unpaid debt. Then, they might execute the judgment and get a lien on your property or garnish your wages, making your financial situation much worse. A wage garnishment can result in the loss of up to 10 percent of your gross pay. However, certain debts can result in a higher percentage. For example, if you owe child support, up to 60 percent of your earnings can be garnished. Also, 100 percent of the funds you have deposited in a financial account, such as tax debts can be taken.
Considering Filing Bankruptcy? Talk to a Bankruptcy Attorney Today
If you are considering bankruptcy, we can give you accurate information so that you can make an informed decision about your path forward. At the Sasser Law Firm in North Carolina, we want to help you get out of debt and regain control of your financial future. Our bankruptcy lawyers have extensive experience and have handled thousands of Chapter 7, Chapter 11, and Chapter 13 bankruptcy cases. We have practiced exclusively in bankruptcy law for the last 20 years and will put our experience to use on your case to help find the best solution for you.
We can explain how we can use the Bankruptcy Code to protect your assets and advance your bankruptcy case to eliminate as much of your underlying debt as possible. Filing for bankruptcy may allow you to address unsecured debts like credit card debt, medical bills, student loans, as well as secured debts like car loans and mortgage payments.
When you work with the Sasser Law Firm, you will work directly with one of our lawyers. We take the time to help you learn the options available when you file for bankruptcy. We can explain bankruptcy basics and guide you through the bankruptcy process from start to finish. There is no fine print, no pressure, and no fees until you decide to file for bankruptcy. Call us today at (919) 319-7400 for a free consultation.
This post was originally published in September 2020 and has been updated for accuracy and comprehensiveness in November 2021.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.
