For many people, bankruptcy still has a stigma surrounding it. Some people think that if they file bankruptcy they are failures or irresponsible for having to seek such relief. In reality, all kinds of people file bankruptcy – rich and poor alike – for reasons beyond their control. Filing bankruptcy can be a life-changing decision, which is why it should not be taken lightly. It is usually a better choice to repay your debts than filing bankruptcy, but for many people their best option is to file bankruptcy and start over with a clean slate. Making the decision to file bankruptcy can be difficult, which is why we have compiled a list of three signs that filing bankruptcy might be in your best interest.
You Have Already Tried Negotiating
If you have a lot of debt, one of the things you can do is contact your creditors to try to negotiate a repayment plan that works for you. If you have already tried to do this and your creditors are not willing to work with you, then you do not have many other choices but filing bankruptcy.
You Have Looked Into Consolidating Your Debts
If you have debt, especially credit card debt, another option is to refinance or consolidate your debt. Debt consolidation refers to taking on new debt to cover your old debt. This means that you will take out a personal loan to cover the costs of your credit card debts, and rather than paying back the individual credit cards, you will be making one monthly payment to your loan provider. This is often beneficial because the loan interest rate is frequently lower than your credit card interest rates. Some businesses call what they do “debt consolidation” when what they actually do is gather a portion of your payments to them and then make offers of a lump sum settlement to creditors when enough money has been accumulated. Be cautious using this type of service; often they take a significant fee from you and do little in return. Meanwhile, your debts continue to grow and you are still subject to debt collection activities, such as lawsuits. If you have tried to consolidate your debt but you still have credit card or other unsecured debt, you might need to consider bankruptcy.
Your Debts Are Much Greater Than Your Income
One of the major reasons people file bankruptcy is because they simply do not have enough money to pay their debts. For example, if you owe $3,500 a month in debts and you only make $3,000 a month, you do not have much of a choice. If your debts greatly outweigh your income, you may need to consider a bankruptcy.
A Fort Worth Bankruptcy Attorney Can Help You Make the Decision
Deciding that you would be better off filing bankruptcy is a serious and life-changing decision. Filing bankruptcy can come with challenges and you will have to be okay with the fact that you may have to deal with these challenges for a couple of years. If you feel like you are drowning in debt and you are not sure which way to turn, you should contact a Fort Worth bankruptcy attorney to help you make a decision. At the Law Offices of Michael P. O’Donnell, we help people make the decision whether to file bankruptcy every day. We know the bankruptcy process inside and out and can help you prepare for what is to come when you file. You will be able to talk with an experienced bankruptcy attorney. Please contact me at (817) 732-7590 or (972) 819-3861 to set up a free consultation. You can also send me an E-mail or complete the Free Case Evaluation.