Many people are unable to pay their bills as they become due but clearly not all of them are candidates for bankruptcy. So when should an individual consider filing for bankruptcy? The truth is that there is no bright line to help make this determination. Each person’s situation is different. Here, however are some of the factors that should be considered in making this determination:
Are you only able to make minimum monthly payments on your credit card bills?
If the answer is yes, then you may be on a treadmill that will be difficult to get off. Minimum payments often cover only the interest that has accrued in the last month and a little bit more. It could take many years for you to pay off what you owe.
Do you have property or belongings that might be lost if you file bankruptcy?
The amount of property that you are able to retain, or claim as exempt, in bankruptcy varies from state to state and should be discussed with a bankruptcy attorney in your area. If, however, you own very little or owe more on what you do own than what it is worth than it is likely that you would not lose anything if you file. Even if you do own property that has significant value, there are types of bankruptcy that may allow you to keep what you own.
How much do you owe?
It is not necessary that you owe any certain amount to seek bankruptcy protection. For some people, $100,000 may be too much debt. For others, it may be as little as $5000. How much is too much for any one individual depends upon that person’s circumstances. How much you earn together with the type debt you owe are two of many factors that should be considered.
Are you facing a foreclosure, wage garnishment or repossession?
If the answer to any of these is yes then your finances are likely already at a point at which you should consult with an attorney. Losing your home, your car or your wages could be devastating. Bankruptcy protection may be able to stop this from happening. You need to know your options.
How much stress can you deal with?
For many people, the anxiety caused by juggling bills, answering calls from collectors and opening letters demanding payment can be overwhelming. The resulting stress can cause loss of sleep, an inability to perform ones job and tension amongst loved ones. Money problems are at the root of many failed marriages.
The factors above do not need to be considered alone. Our conveniently located offices offer a free confidential consultation with an experienced attorney. During the consultation, we will help you evaluate your current situation and help you to determine the option that is best for you.
If you are having difficulty paying your bills, you owe it to yourself to learn all of your option. Don’t let either fear or pride keep you from seeking help. If an option exists, either with or without bankruptcy, we will do our best to help you obtain financial relief.
Brad Botes is a principal of each of the Bond & Botes Law Offices throughout Alabama, Mississippi, and Tennessee. He holds a Bachelor of Science from the University of North Alabama, and a Juris Doctorate from Cumberland School of Law at Samford University. He and his team of bankruptcy lawyers have spent over 30 years guiding people through financial challenges. Read his full bio here.