Do I Need To File for Bankruptcy?

Do I Need To File for Bankruptcy

When you’re in debt and are having a hard time paying it back, you might get overwhelmed. That overwhelming feeling might lead to you wondering what your options are. Bankruptcy is certainly an option, but how do you know when it’s the right decision? The following are some things to consider.

What Kind of Ability To Repay Debt Do You Have?

Think about your current situation and what ability you have to repay your debts. For example, if you are unemployed and have been working hard to find a job for the last six months, but to no avail, your ability to repay debt might be quite low at the moment. Bankruptcy might be a good option. If you are working, have been building a savings and could even get a second job to help out for a while, bankruptcy might not be right for you because you have the ability to pay your debts back.

Are Your Creditors Willing To Work With You?

If you are having trouble paying your creditors, there’s a chance they’ll be willing to work with you. Maybe a particular creditor will put you on a payment plan that is more reasonable and feasible for your situation. Perhaps the creditor will put your account on hold for a specified period of time until you are in a better financial situation.

Of course, there’s also the chance your creditors won’t work with you. Oftentimes, a creditor is in just as desperate need of the money as you are, so there will be no wiggle room and no compromise. If your creditor won’t work with you at all, bankruptcy might be your best option.

What Type of Debt Do You Have?

Not all debts are eliminated when you file for bankruptcy. Student loans, for example, are often put on hold during the debt elimination proceedings, but you still have to pay them back when your case is settled. If student debt is the bulk of your issue, bankruptcy might not be for you. If you have credit card debt, medical bills, unpaid utility bills and similar debts to those, the debts will likely be eliminated through bankruptcy, so it could be a beneficial option. 

Working Through Bankruptcy With a Lawyer

Dealing with bankruptcy is never fun. If you have found yourself in this situation and don’t know how to work through it, a lawyer could help.