Adam Law Group Blog

When is it a Good Idea to File for Bankruptcy?

 

Statistics compiled by the federal government suggest that between 2005 to 2017, 12.8 million people filed for bankruptcy. Despite this large number, there are many other people who are left uncertain about whether it is a good idea to file for bankruptcy.

Although many people know that the accumulation of a large amount of debt that cannot be paid off is a good sign that it is time to consider filing for bankruptcy, there are also a number of other situations in which filing for bankruptcy might be worthwhile.

The following will take a closer look at some signs that you should consider filing for bankruptcy.

You Have Substantial Debt From Your Small Business

Starting your own business is challenging and there are a number of complications that can arise. If your business fails, it is likely that you will be left with debt.

One of the best ways to discharge these debts and obtain a second opportunity at a successful business venture is by filing for Chapter 7 bankruptcy. This type of bankruptcy is particularly common in this situation because it can be used to pay any remaining assets that you might have to your creditors.

A Family Member is Experiencing a Health Crisis

For people with serious medical issues, medical bills are often much too difficult to handle. When a person does not have insurance, the amount of debt involved can be particularly large. In these situations it can be advantageous to file for bankruptcy before medical debts become uncontrollable.

You Have Been Unemployed for a Substantial Period

Many people who have been out of work for an extended period of time discover that their bills add up. Even after a person returns to work, it can be difficult to catch up.

Other times, people who receive unemployment compensation discover that this payment is not enough to cover the various debts that accrue. In these situations, filing for bankruptcy can help you recover.

You are Subject to a Lawsuit

Sometimes, due to no fault of your own, you end up subject to a lawsuit. If you are facing this situation and you do not have any type of liability insurance, you may be in danger of accruing huge amounts of debt. Bankruptcy is often the only way to escape this situation.

You are Going Through a Divorce

Divorce is one of the most devastating financial situations a person can face. This is because many former spouses end up in disputes about the money that should be paid. If you need financial assistance after this difficult time, it might be appropriate to decide to file for bankruptcy.

Speak with an Experienced Bankruptcy Attorney

There are a number of complex issues involved with bankruptcy and deciding whether it is time to file for bankruptcy is just one of them. Fortunately, the assistance of an experienced bankruptcy attorney can make this process much easier.

Contact the Adam Law Group today to schedule a free initial consultation.