Going bankrupt is an extreme and difficult step one can take, but if you take this step at the right time and in a planned way you can benefit from it. Having a bankruptcy can help you in saving money for future use, can let your mind be at peace, and you can be back on your feet financially in no time.
Bankruptcy can be expensive and can consume a lot of your time and it will have a massive negative impact on your credit. It has far-reaching consequences for different areas of your life, for example, purchasing another vehicle, home, or applying for occupations.
So it should not be done lightly or without counsel. But, holding on to all financial obligations until you are totally broke has also negative consequences. Here are 5 major reasons which will help you to know when you should file bankruptcy, so you can hire a competent, experienced bankruptcy attorney on time.
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Personal Financial Crises
You could have been laid off your job, and you are not able to find another good job, or there is someone in your family who is seriously ill, and medical bills have mounted. In fact, medical bills are one of the primary reasons most file for bankruptcy.
If this describes your situation be sure to check first if you can apply for any medical grants or other benefits like Medicaid. Your hospital usually has an office just for this that you can visit and fill out the appropriate forms. Don’t assume you are all alone in this boat, as the hospital gains nothing from you going bankrupt either.
A divorce or separation can also cause financial problems. You have to pay for all of your expenses or support children on your own, and you might not be able to afford that. Another major cause of bankruptcy is getting behind on your home payments.
Often you might be trying to negotiate your home payment but your mortgage holder may be unwilling to negotiate and your mortgage payments can get past the point that you can ever hope to pay them off without restructuring the debts. So, filing bankruptcy for such situations may be your only solution. Especially if you have absolutely no way to cover even the interest on your debts.
Excessive Use Of Credit Cards Instead Of Cash
Another situation is if you have imprudently used credit cards. You will need to understand the difference between a credit card and a debit card. In this case, credit counseling is often necessary, this will help you to learn to manage your finances in the future, but at the moment, it’s better for you to hire a good bankruptcy attorney to file bankruptcy because in the future you might need this lawyer for any credit card issues with the bank and will give you the breathing room to get all your affairs in order.
You Are Being Chased By Creditors
If you receive calls from creditors on your home telephone, work telephone or cellphone constantly, this is an indication that you need to think about insolvency. An accomplished chapter 11 legal counselor can relieve this harassment and help you get out of the debt.
Anxiety Over Financial Situation
No one wants to spend sleepless nights worrying about bills to pay, but not having enough money to meet those bills this a major sign you should consider bankruptcy since anxiety can severely affect your health.
When You Take Loans To Live On
When you lack money, and you are taking loans from the bank to pay the day to day necessities of your life, it is time to file bankruptcy at this point since this can only get worse and it might be best to just start from zero again to rebuild your life so it never happens again.
In Conclusion
While all the above are times that you can file bankruptcy and it might be advisable to do such that doesn’t mean you have to. Many people have avoided bankruptcy even in dire straits. So approach it always with a lot of thought and counsel from a credit counselor or equivalent person that you trust.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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