Bankruptcy can never really be a positive thing for most people. However, learning about the reasoning behind bankruptcy and why (or even when) you should file is a more positive aspect of it all. Most people decide to file bankruptcy to remove the presence of debt in their financial life. Filing for this pretty much means you put a stop button on paying back debts. If you’re swimming in a pool of debt and have turned towards the possibilities of bankruptcy, here are 5 of the many reasons why you should go ahead and do it.
1 You’re About to Get Evicted
Most of the time, filing for bankruptcy can eliminate or prevent evictions from happening. Even if you take this step, you will still have to pay your bills. But filing will spread the time out for you so that it becomes easier for you to handle these bills. One thing to remember is that if your landlord has already taken his or her own legal steps to remove you from the premises (going to court and getting permission there) then a bankruptcy will not do anything for you, unfortunately. It is also pointless if you’re being asked to leave because you’ve broken the law.
2 You Began a New Job With a Higher Salary
When you’re filing, you want to prove that the money you’ve made from your new job has not towered over a certain limit that might be required by the law. This is taken into consideration along with your monthly expenses. These will determine the final amount.
If you haven’t had a job for quite a while, you should probably file bankruptcy before you get a new job. Otherwise, you’re monthly income will raise much more than you’d expect. If you wait too long, specifically after you’ve been hired and started the job, it might be too late for you (see: https://www.fundfirstcapital.com/bankruptcy-attorneys/).
3 You’re Getting Sued for Debt
In most cases, an unpaid debt will eventually be handed over to collections. At that point, if you still haven’t paid your debts, that person might go on with taking you to court. It’s not always worth fighting this battle, as you’ll most likely end up with more things you have to pay once it all ends anyway. When you file for bankruptcy, the court will freeze your account and tell the person suing you to freeze their attempts on collecting money from you. This is most common with creditors.
4 You’re Using Credit Cards for Everyday Purchases
Sometimes debt can get so deep and troublesome, you run into the well by trying to pay off debt in a way that will get you into even more debt. Filing for bankruptcy can get credit card debt removed from your worries.
5 You Have a Long Road to Pay Off the Debt
If you find that it’s going to take more than a couple of years to get this debt off of your back, this might also be a good time to file for bankruptcy. To find this out quickly, just write down how many people you owe and what the amounts are for each person. Think about what can be paid back, when, and how. You should also take a look at which debt can be diminished and erased, like credit card debt for example.
6 You’re Home or Car is About to Get Taken Away
If you find that your home is about to go into foreclosure or your car is about to get repossessed, filing for bankruptcy can put a stop on this and it will also give you more time to make the necessary payments. Most times things like these cause secured debt, which means that if you don’t make the payments, the person that loaned you that thing can take possession of it again. It is best to not panic or make any drastic decisions, as you can probably get your things back once after you file.