Those who are struggling financially may reach a point where they seriously consider filing for bankruptcy. But how do you know whether you qualify? Is now the time to file, or should you wait it out a few more years? It’s only normal to have plenty of questions at this time. One of the best things you can do for yourself in figuring out the next step is talking with a professional who understands the world of bankruptcy law. Here are some common reasons why people consider filing for bankruptcy:
Debt is Continuing to Overwhelm You
If you are overcome by debts, there are several bankruptcy chapters that you may qualify for. But prior to deciding, it is worth talking with a lawyer and figuring out if you can negotiate with your creditors. If your creditors aren’t interested in negotiating, and you don’t have the income to pay them, bankruptcy may be the right choice
A Bankruptcy Status is Worth the Credit Mark
A bankruptcy status will appear on your credit report for about ten years. Those who have higher credit scores upon filing for bankruptcy will take a bigger hit compared to someone with a low credit score, since there’s more to lose. If it’s worth the ding to your credit score to file for bankruptcy because it leads you towards future financial stability, then you may want to talk to a lawyer about how to proceed.
Debt Has Impacted Your Mental Health
The pressure to pay off debts, especially student loans and medical bills, can hinder someone’s ability to feel joy because they are too worried about finances. Many people struggle with the constant hounding from creditors for payments. Once bankruptcy is filed, an “automatic stay” is enforced, meaning your creditors can no longer contact you about debts as you make a plan for handling your finances.