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When to Declare Bankruptcy



When to Declare Bankruptcy?… Do you feel as if you’re drowning in your debts that you can’t find any other way out of this mess and the only solution that keeps recurring in your mind is bankruptcy? Or are you constantly in a struggle to catch up with your credit card bills and monthly mortgages? If the answer to all of these questions is yes, then you really are in need of financial assistance. However, you should also take into consideration the fact that bankruptcy is not the only solution. If you’ve tried all possible solutions from debt settlement to credit counseling and it still doesn’t work out, this then you can start considering bankruptcy protection.

Before making the ultimate decision to file for bankruptcy, weigh the advantages and disadvantages. For one, you have to make an informed decision. The way to do this is to educate yourself about the ramifications of your action. Do you know what bankruptcy declaration will do to your credit rating? A Chapter 7 bankruptcy can stay in your credit record for up to 10 years; and a Chapter 13 for 7 years. Furthermore, you will also have difficulty in obtaining credit cards, loans, and new bank accounts in the future because of this. There are long-term financial effects of bankruptcy in your life and for some this is even considered as the ultimate admission of financial defeat.

It is a fact that bankruptcy offers a very enticing option for a debtor hard pressed to make ends meet; however, the harsh reality is there’s more to the bankruptcy process than what is usually presented. If you want to know how intricate and labyrinthine bankruptcy rules and provisions are, ask a trusted bankruptcy lawyer. Contrary to what you know, there are certain eligibility criteria employed by the bankruptcy courts to screen for applicants. It may not be enough to be drowning in debt to be able to avail of bankruptcy because your monthly income is more than what other citizens of the state makes. Plus, a mountain load of paperwork and expensive filing fees are involved in bankruptcy petition. A financial adviser or credit counselor will also orient you about what you want to know about bankruptcy.

Another possibility you have to consider before filing for bankruptcy is your creditors. You are not the only one affected when you file for bankruptcy; the innocent creditors who stand to lose a lot are also hurt. These creditors will be hit hard if the loans you’ve availed are not repaid.

If you are really interested in bankruptcy and you plan to apply for it, then you will have to take the court mandatory requirement of credit counseling program. The fee for the credit counseling will be shouldered by the applicant. A credit counseling program may give you the enlightenment you need, or it may not. The bottom line is there is no definite formula as to when to declare bankruptcy. The most important thing now is to consider the safety and security of your family. Think things through, and if bankruptcy is really what’s best for you then go for it.