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Bankruptcy Checklist (To determine if bankruptcy is right for you)

by | Sep 1, 2021 | Consumer Bankruptcy, Industry News, Updike, Tracy L.

Is bankruptcy right for you? Sometimes financial pits can be very deep and difficult to climb out of. In certain situations, the best option for a fresh start may be to file for bankruptcy. There are many things to consider if you’re contemplating whether to file for bankruptcy, and I’ve created a checklist that can be used to help you determine whether it’s the right move for your financial future.

Are you getting calls from debt or bill collectors?

Getting constant calls from debt collectors is draining and puts you under stress. If you’re getting constant calls from multiple collections offices, bankruptcy is a way to make it stop and reclaim your phone! You won’t be receiving these incessant calls any longer once you file, as creditors know it’s a violation of the automatic stay of collection that comes into effect immediately upon filing.  This differs from debt settlement plans, where a creditor still may attempt collection and may even take you for a judgment while the settlement is proceeding.

Is your total amount of debt getting higher each month?

If you’re only able to make the minimum payments on your credit cards or debt, your total debt with interest may be getting greater and greater. It can be very disappointing if you’re trying to make your payments but you aren’t chipping away at the principal balance. If you’ve found that your total amount of debt owed is only growing, it may be time to consider bankruptcy.

Do you have to rely on credit cards to pay for necessary expenses?

Paying for monthly necessities with a credit card might mean that you are stretched too thin financially. If you find yourself relying on credit cards to make it through each month, you may be operating in a financial deficit that bankruptcy could help you climb out of.

Are you dipping into your retirement funds to keep going?

Whether you’re at retirement age or much younger- using retirement funds to pay debts carries serious consequences. Don’t do it!  Withdrawing money from your retirement funds will put you at a major disadvantage and may not ultimately be the best situation. Although bankruptcy is difficult to come to terms with, it is the better option for some, and should be considered.  Funds in a qualified retirement plan are fully protectable in a bankruptcy!  Don’t use those funds to pay old debt, continue to invest in your future.

Are you considering a home equity loan to keep going?

Obtaining a home equity loan to pay down debts similarly carries serious consequences. Taking equity out of your home to pay down credit cards and loans turns unsecured debt into secured debt.  It must be paid to keep your home, most of the time even in a bankruptcy!   Very often a significant amount of equity in real estate can be preserved even when filing for bankruptcy.  At the very least, consider a free bankruptcy consultation before taking this action and putting your home at risk.

Are you responsible for dependents who may suffer if you don’t file?

Taking care of children, spouses, or any other relatives can be a huge financial responsibility. If you have others who are dependent upon you for financial security, you’ll need to consider the consequences that they’ll face if you aren’t able to achieve financial stability. If you’re concerned that you won’t be able to handle caring for your dependents with your current financial state, it’s time to consider filing for bankruptcy.

Do you need help getting started?

If you checked a few or all of the boxes above, it’s worth your time to speak to a bankruptcy lawyer and go over your options. The process can seem like too much to handle, but an experienced bankruptcy attorney will help make the process smooth and comfortable. If you’re looking for a bankruptcy lawyer in the Dauphin, Cumberland, Perry, Snyder, Lebanon, Adams, York, Franklin, Fulton, Huntingdon, Mifflin or Juniata County, give me, Tracy L. Updike a call, at (717) 896-1317.