Should you File for Bankruptcy?
Sometimes filing for bankruptcy seems like the only option a person has left when they are struggling with their debts. You may be starting to feel a tight knot growing in your stomach even as you read this information. For some people just thinking about their finances can lead them into a panic attack.
While the information here is not to be taken as legal advise, it can help you decide if you should look into the option of bankruptcy any further. Start by taking a close look at all the debt you have as well as all of your assets. Make a very detailed list of your monthly living expenses. Make sure you include everything including your mortgage or rent, vehicle payments, utilities, food, and other essentials. Don`t include other debts such as your credit cards or unsecured loans. Next compare your monthly income to your living expenses.
Do you have enough to cover them? Can you realistically pay your other accumulated debt within 3 years including interest? Keep in mind that to do this you need to look at the amount of money you have left each month to pay towards them not the total of the minimum payments due on those accounts. There are some wonderful tools you can access for free over the internet to help you with these calculations.
Take a look at all the possible steps you can take to increase the amount of money available to pay towards your debt during the next three years. This means you will have to cut back on going out, dates, family vacations, and even lowering your thermostat. It may require that you take on a second job to generate more income.
It is also a good idea to discuss your particular situation with a professional credit counselor who can help you decide if bankruptcy is a good option for you. You need to make sure you are careful when you consult with a credit counselor though or it could cause you more harm than good. Make sure you work with one that understands that various state and Federal regulations in relation to bankruptcy laws. Your local courts can give you a list of such agencies out there. The decision to file for bankruptcy is never easy but it may be the only option you really have to clear your debts.
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