When you are currently in debt and are running out of options, filing for bankruptcy may be one of the most feasible things to do. This will give you a fresh start you need to regain control over your finances. However, the decision depends on a lot of factors, so you must carefully assess your situation.
Here are some things you must consider before filing for either Chapter 7 or Chapter 13 bankruptcy.
Evaluate All Your Options
Evaluate all your options first and compare them to what bankruptcy can do for you. This involves checking what types of debt you’ve incurred because a bankruptcy claim won’t protect you from all types of debt. If the debts you have won’t get wiped out with a bankruptcy claim, maybe it’s better to go forward with another option. Most creditors are accepting when it comes to debtors wanting to settle their credits. Talking to your debtors and directly resolving your debts can also be a good option.
Qualifications and Requirements
Not everyone can file for bankruptcy. You have to pass some eligibility requirements to file for Chapter 7 or Chapter 13 bankruptcy. The most important requirement is how low your income is. Your debts also shouldn’t exceed the dollar limit. You should also assess the following factors when choosing between Chapter 7 or Chapter 13 bankruptcy:
- Types of debts
- Total Income
- Estimated expenses
- Ownership of nonexempt property
- Goals for filing for bankruptcy
Facing a Lawsuit
Your debtors may file a lawsuit against you. When this happens, you need to get a credible bankruptcy attorney to defend you and give you legal advice, recommends Schaumburg's Chang Legal LLC. Debtors may file a motion to garnish your salaries or gain access to your properties. Filing for bankruptcy may help you prevent this from happening.
Make sure to take your time when deciding whether to file for bankruptcy or not. When your finances are at risk, you need to be careful about your every move.