In the United States, bankruptcy is seen as an option of last resort when a person is in debt. Viewed negatively, the average person believes bankruptcy is a sign of financial defeat, and that stigma leads to people waiting until their situation is truly out of control before they seriously explore bankruptcy. If you or someone close to you is going through a difficult financial period, it may be time to consider filing for bankruptcy. Since societal stigma makes it hard to determine when bankruptcy is an option, being aware of these three signs that it is time to consider bankruptcy may help you if you are on the fence about filing.
You Have Tried Everything Else
There are bankruptcy alternatives in the forms of credit counseling, debt management, and more that allow you to reduce your debt or repay that debt in a manner that is easier for the average person to handle. Most people explore all or most debt consolidation or repayment options before bankruptcy becomes a viable choice. If you are a person who has gone through every bankruptcy alternative available to you, then it may be time to file for bankruptcy. After trying everything once, it is rarely a good idea to go through those options for a second time when your financial situation has not changed.
Your Income is Not Enough
The average person who files for bankruptcy makes less than $30,000 each year and owes more money than he or she is earning. People who are good candidates for bankruptcy are consistently paying their bills late or failing to pay them at all. Anyone who owes more each month than they earn should probably start seriously considering bankruptcy. That is especially true if a person is dealing with multiple types of debt such as student loans, credit cards, medical bills, car loans, and installment accounts.
Can Not Repay Debt in Five Years
The total time you will take to repay your debt is a good indication of whether or not bankruptcy is the best option for you. In theory, most debt that is secured or unsecured can be repaid within a five-year time frame. If you go through your budget and determine that the debts you owe, especially unsecured debt like medical bills, cannot be repaid within a five-year period, then you are probably the perfect candidate for bankruptcy. Unless you expect to see a major change in your income, if five years is not enough time to repay what you owe, bankruptcy might be your best option.
Schedule a Consultation
Bankruptcy is an option that can alleviate a lot of stress from your life while giving you a chance to improve your credit. If you believe bankruptcy might be your best option, scheduling a consultation with a qualified bankruptcy attorney is highly recommended. Located in Jacksonville, Florida, Adam Law Group is prepared to provide you with honest answers to your questions. Contact our office today at 904-329-7249 to schedule a consultation so that we can begin providing you with the advice and legal assistance that you need.