You’ve been struggling with debt for years. But this last year, you feel like you’ve hit a breaking point. Maybe you lost your job in the economic downturn. Now, your debt has swelled even more. Should you consider bankruptcy? Here are seven signs you maybe should explore your bankruptcy options:
- Your debts now are more than half your annual income. If you owe thousands and thousands, you may face difficulty paying off those debts any time soon.
- You are having problems making minimum payments on your debt or you aren’t able to pay your mortgage and other bills.
- You constantly are receiving calls from creditors. With bankruptcy, you would receive an automatic stay, in which creditors can’t contact you about your debt while your bankruptcy is in progress.
- You have maxed out your credit cards and can’t receive approval for new lines of credit.
- You suffered a big financial setback, such as losing your job, suffering a medical emergency (with the bills to go with that) or went through a divorce.
- You took out a home equity loan to pay off your debt, but you still are struggling to pay your bills.
- You are considering borrowing from your 401K to pay off your debt. Through bankruptcy, you can avoid having to use your retirement money to pay off your debt.
Sometimes, filing bankruptcy is the best way to get a fresh financial start. With a Chapter 7 bankruptcy, you could discharge most of your debts. Then, you could alleviate the stress you’re now under about your debt and focus on rebuilding your finances for a better future.