3 Signs That You Should Consider Filing For Bankruptcy

Posted on: 20 May 2017


Life can be difficult, and when your financial situation is dire, you may feel like you do not have any options. Whether your financial problems are due to credit card debt, job loss, or huge unexpected medical bills, the time may come where filing for bankruptcy is the right thing to do. Some common signs that your financial situation is complicated enough to consider bankruptcy include:

You are Unable to Pay Your Bills

Illness or job loss can put a huge strain on your finances. If you are unable to cover your daily living expenses and pay your bills for an extended amount of time, consider speaking to an attorney who specializes in bankruptcy. It is not uncommon for people dealing with financial stress to turn to credit cards to help pay for things, but those cards will eventually be maxed out and just add more issues to your financial problems. Chapter 7 bankruptcy is an option for people whose income is not enough to cover their debt.

Being Sued by Debt Collectors

When you fail to pay back debt that you owe, the company, whether it is a hospital or a credit card issuer, usually writes it off and sells the debt to a debt collection agency. In the event that you do not have the money to set up a payment plan with the debt collection company, they may opt to sue you in court. It is very difficult to win a debt collection lawsuit, and if you lose you may also get stuck paying court costs.

If you know that you owe several creditors large amounts of money, filing for bankruptcy can provide you with protection. After a petition for bankruptcy is filed, the court will issue a stay against your creditors. This means that they are no longer able to contact you or file a lawsuit until your case is discharged or dismissed.

Your Home is in Danger of Foreclosure

Facing a foreclosure due to being behind on mortgage payments can be very difficult. When your finances are already in trouble, it can be near impossible to come up with the money to catch up on missed mortgage payments. Filing for chapter 13 bankruptcy is one way that you can avoid foreclosure and eventually catch up without losing your house. With chapter 13 bankruptcy, a plan is created to help you pay off debt over a period of a few years.

For more information, talk to a bankruptcy attorney and visit sites like http://www.carvajallaw.com/.