Bankruptcy and Debt: When Is the Right Time To File?
If debt is taking over your life and affecting your health or personal relationships, you may be considering bankruptcy as a solution. However, while filing for bankruptcy may be an option for helping you to erase or reorganize your debt, the advantages it might provide usually have to suit the individual debt situation for it to be effective. Before you file for bankruptcy, there are a few factors you may want to consider first.
If You Have No Source of Income
The loss of a job may have caused you to rely solely on credit to make ends meet, but when you can no longer pay your monthly bills, you could be in over your head before you realize it. You may be able to file for bankruptcy if you have no current source of income due to:
- A severe illness
- The shutdown of your company
- Inability to qualify for unemployment
You may want to ask an attorney for advice about what might qualify you for bankruptcy protection and what type of debt it may erase.
If You Are Being Pursued by Creditors
You may find yourself being buried in letters and phone calls from creditors demanding payment, perhaps to the point where you have unplugged your phone and dread collecting your mail. Declaring bankruptcy can stop this harassment, especially if you organize it with the help of a lawyer. Once you file, there are laws that can shield you from lawsuits and consistent debt collection calls so you can arrange to repay your debt with greater peace of mind.
When Your Wages Are Garnished
Debt can become overwhelming, especially if you are drowning in credit card payments. However, other types of debt, including mortgage payments, child support and car payments can also create massive amounts of personal debt that you can no longer afford. Creditors can sue and win the right to garnish your wages, which could put you even deeper into the red. When this happens, declaring bankruptcy may be a wise choice.
When Your Health Suffers Because of Debt
The constant stress and pressure of having too much debt can put a serious strain on your health. Stress, sleeplessness, worry and depression may affect heart health and increase the risk of deadly events such as heart attacks or strokes. While declaring bankruptcy may not be the most desirable step to take, doing so can help protect your health and mental state.
The decision to file bankruptcy can be extremely difficult, but it may be helpful when certain circumstances prevent you from moving forward with paying your debt.