Signs bankruptcy might be right for you

We’ve all had financial difficulties from time to time. A sudden expense, like a broken appliance or a flat tire, might have taken an unexpected chunk out of our bank account and left things a bit tight until our next paycheck.

There’s a difference between being a bit short on cash for a brief period and being so far in debt you can’t see the light at the end of the tunnel, however.

If you are dealing with unmanageable debt and are wondering if bankruptcy might be right for you, here are some signs that you should consider a filing:

• You can’t cover your monthly expenses – utilities for your home and gas for your vehicle shouldn’t have to go on your credit cards each month. If you can’t afford to cover basic monthly expenses because of outstanding debt payments, bankruptcy might be right for you.
• You’re facing debt collection tactics or lawsuits – debt collectors can make your life miserable. You might be afraid to answer the phone for fear of harassing calls, or wary of opening the mailbox because you’ll get another threatening letter. You may even have been sued. If you’re facing a judgment against you for one or more expensive debts you simply cannot afford to pay, think long and hard about a bankruptcy filing. It can make the harassment stop because of something called an “automatic stay. Like the name implies, it automatically stops all debt collection activity, including letters, phone calls at work and home, lawsuits and more.
• You fear losing your home – mortgage companies are notoriously inflexible when it comes to late or missing payments. Skip just two or three monthly mortgage payments, and you might find yourself facing foreclosure. Filing for bankruptcy will not only put a stop to foreclosure proceedings in the short-term, the debt discharge achieved with a Chapter 7 or Chapter 13 bankruptcy will usually free up enough money that you can continue to make your monthly mortgage payments on time for the duration of your loan, thus saving your home.
• You’re facing wage garnishment – if you’ve already been sued by a debt collector who has gotten a judgment against you, your wages could be garnished to pay off the debt. This means that you have less income to pay additional debts. Bankruptcy can help remove most wage garnishments, giving you the money you need to get back on track.

No matter why or how your finances went awry – be it a medical emergency, long illness, job loss or more – a bankruptcy filing might be the tool you need for a fresh start. If you have questions about whether bankruptcy is right for you, a bankruptcy attorney can help.