Chapter 7 and Chapter 13 bankruptcy are a few methods to help resolve debt obligations. Filing for bankruptcy can mean major life changes, which is why many people are hesitant to file.
It can help to ask the following questions as you consider whether it’s time to file for bankruptcy:
Did you try working off your debts or budgeting?
One of the first things many people recommend to debtors struggling with debt is to work more and budget. For people who want to try and work off their debts, this may mean getting a second job or side hustle. People who budget may try focusing on things they need instead of want as they consider their purchases.
However, these methods don’t often go far. Many people still have to consider other debt-relief options, such as bankruptcy.
Are you falling behind on credit card payments?
Credit card debt is a big issue for many people. One sign that it’s time to file for bankruptcy is if it’s becoming impossible to make regular credit card payments. As credit debt builds up, debtors may fall behind on payments, which can lead to late fees and higher interest fees.
Did you suffer from an injury or illness?
Even a small injury can lead to overwhelming amounts of debt. Many people can’t afford their hospital bills. Bankruptcy may be the only option as people explore ways to resolve their medical debts.
Did you recently lose your job?
Losing a job can create a lot of difficulties, especially if a debtor made a lot of investments and relied heavily on their job to pay off debts. A new job may not have a high enough salary to continue debt payments. One way debtors can ease some of their stress is to file for bankruptcy.
Debts don’t easily go away. People often have more debt obligations as they delay a bankruptcy filing. Legal help is often available for people who are contemplating debt relief.