Debt can put anyone in a sticky situation. Most want to be responsible for their debts and feel guilty about declaring bankruptcy. It can be difficult to know when the time is right for filing a chapter 7 bankruptcy, but waiting too long is not a good idea either. This is no time for speculation and guesses. Read on to find out what's at stake with your bankruptcy decision.
Seek Expert Guidance
It's no use asking your friends and neighbors about bankruptcy. Personal financial situations are unique and there are vast differences in each experience. Some people, for example, have a lot of secured debts and property. That means they might have more to lose with a bankruptcy filing. Others owe the back taxes, back child support, and have crippling student loan debts. Those people will have very different bankruptcy experiences than you might.
To get the most accurate and personalized information about what might happen when you file for chapter 7, you have to speak to a bankruptcy lawyer. Once they have enough information about your debts, your property holdings, your income, and other financial facts, they can advise you about filing. Sometimes, filing should be delayed for a few months, for example. This is true for those who have unwisely used their credit cards for frivolous reasons recently, who've sold property, or who have too much income to file right now.
The Amount of Debt Might be Irrelevant
Witnessing your debt load rise over the months is upsetting and demoralizing, but the amount you owe has very little bearing on how your bankruptcy progresses or whether or not you should file in the first place. The debt load may feel like a burden, but a bankruptcy with $50,000 in debt progresses much the same as one with $500,000 in debt. What matters more is the type of debt it is, your state's exemptions, and the measures your creditors have already taken against you. For example, you may find immediate relief if you have a large amount of credit card debt due to the large number of minimum payments required. You might be surprised at how much money that particular form of debt costs you per month. Once you file, that money can be better used to catch up on secured debts like auto loans and mortgages.
Most consumers don't have enough knowledge of bankruptcy laws to make this decision on their own. You can speak to an attorney at a bankruptcy law firm about your situation to find out what a bankruptcy can and cannot do for you.