Is Bankruptcy the Answer
You find yourself in a tough and unfortunate financial situation and it seems like bankruptcy is the only option. You must keep in mind the effects bankruptcy will have on you as an individual and your family. Although there might be a light at the end of the tunnel, bankruptcy still seems like a very scary proposition to enter into. How can you tell when the time is right to file for bankruptcy? Here are some questions to consider when determining if bankruptcy is the best option for you. Do you only consistently make minimum payments on your credit cards? Are multiple bill collectors calling and harassing you? Does the prospect of sorting out your finances make you feel scared, uncomfortable or even out of control? Do you find yourself using credit cards for pay for necessities? Have you considered debt consolidation? Or are you even unsure of how much you really owe? If you answered yes to multiple of these questions, it might be right for you to file for bankruptcy. Take into consideration any efforts you have already made to try and negotiate with your creditors. You offered a payment plan, but they simply won’t budge and you don’t have the means to make payments as scheduled. Your finances are very important and integral to many aspects of your life. When trying to determine if you are bankrupt it is important to first determine if you owe more than you make or afford to pay. A good way to start the process is to make an inventory of any assets you own.
These could include retirement funds, stocks, bonds, vehicles, real estate and any other non-bank account funds. It is important to note that in 2005 the Supreme Court ruled in favor of protecting individual retirement accounts from creditors. This is good news! Once you have created an inventory of your assets you can see what sort of money you have. Next take the time to add up all of your debts and obligations. If this amount is greater than the amount of your assets you may consider filing for bankruptcy. There are two main ways to file for bankruptcy: either a person can file voluntarily, or a creditor can petition the court to make someone file. Either way it is important to see and consult with a lawyer. Perhaps try someone with experience in bankruptcy such as a Los Angeles bankruptcy attorney. They are a great resource and can answer your questions. Luckily there are laws put in place to protect creditors as well as those struggling with their finances. If you have been ignoring the phone, and that stack of bills keeps getting bigger and so does your anxiety, perhaps it is time to call and get some help. All that being said, it is important to note the negative side of filing for bankruptcy as well. Filing for bankruptcy can affect the individual mentally. They may feel a sense of disappointment and feeling bad about themselves. If this is something you fear you may experience, make sure you think everything through first, because mental issues are hard to overcome. Overall, it can be a good option in order to give someone a fresh start and to help them learn much better budgeting skills.