When deciding on the right time to file for bankruptcy, it’s important to consider all the factors associated with such an important financial decision. Many individuals may feel they are a few steps from going under.How can you tell if bankruptcy is the best choice for you?

Signs You Should File

  1. Do you only make minimum payments on your credit cards?
  2. Do you use credit cards to pay for necessities?
  3. Have you considered debt consolidation in the past?bankruptcy option
  4. Do bill collectors call you regularly?
  5. Are you unsure of how much money you actually owe to creditors?

If you have answered yes to many of these questions, you will at least want to evaluate your financial situation closely to determine if bankruptcy is for you.

Chapter 7 Bankruptcy

This option is when you voluntarily file for your own bankruptcy. Also known as straight bankruptcy, this allows you to liquidate your assets in order to pay them off as much of your total debt as possible. After four months, you receive a notice of discharge. A bankruptcy record stays on your credit report for 10 years. However, this type of bankruptcy may not be ideal for someone who owns a company, a home or other assets that they want to keep as almost all assets are taken and sold in order to repay debt.

Chapter 13 Bankruptcy

Known as reorganization bankruptcy, this allows you to pay off your debts from three to five years. This is great for someone with consistent income as it offers a grace period to get back on track. Any debts remaining at the end of this time period are discharged. Once this is approved by a court, all creditors must stop contacting you.

Deciding if Bankruptcy is for You

Ultimately bankruptcy is a big decision; however taking time to evaluate your specific financial situation is a valuable experience. This allows you to determine if you should file or if you should wait. If you’re considering bankruptcy, it’s always important to understand all of your options. The expert attorneys at Clark & Washington can help you decide. We offer a free, easy consultation. Schedule yours today.