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The Ghosts of Financial Decisions: Is It Time to File for Bankruptcy?

Are you spooked at your current debt balances? If you seek solutions to dig out from past financial decisions, then declaring bankruptcy is an option. Each situation is different, so the best solution is to consult with an experienced bankruptcy attorney to determine if this path is right for your unique needs.



When Is the Right Time to Declare Bankruptcy?


Usually, the ideal time to think about bankruptcy is if you’ve done everything else you can think of to meet your financial obligations but are still unable to afford the debt payments. If you can’t make the monthly payments, bill collectors are calling, and you are behind on your mortgage payments, you might benefit from a bankruptcy filing.


Most experts suggest that bankruptcy should be the last resort. If you are living paycheck-to-paycheck and spending 20% or more of your monthly income on your credit card payments, then bankruptcy might be the right solution.


It can be stressful to be overdue on bills, especially when you don’t feel like there is a way out of the mess. In due course, a situation arises where the credit cards have reached their maximum limit, transactions are declining, collection calls are becoming frequent, and the accruing interest costs are causing the balances to grow monthly.


Bankruptcy Limitations


Yes, bankruptcy can help eliminate debt, halt the stress from bill collectors, and help you stay in your home. But you also must consider the financial consequences if you choose the path of bankruptcy. It can have severe consequences on your credit score, resulting in years of low credit that could impact your ability for financing in the future.


Another potential problem is that there are limits on which types of debts can be discharged and how often you can file for bankruptcy. These limits depend on the type of bankruptcy you choose – Chapter 7 or Chapter 13.


Talk to an Expert About Bankruptcy


What questions do you have about bankruptcy? Our team at Miles & Hatcher, LLP, is here to help. Reach out at your convenience to learn more about this process and see if a bankruptcy filing is right for you. Call to schedule a free consultation: (909) 481-4080.

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