Bankruptcy should be your absolute last resort. A bankruptcy reduces your credit score by hundreds of points and stays on your credit report for ten years. This article will help you determine whether you should apply for bankruptcy.
Several factors can help you determine whether you can continue treading water or whether you are beginning to suffocate in debt.
The first recommendation would be to examine the situation thoroughly. Frequently, we put expenses aside in the hope that they will go away. Sadly, this does not occur and only exacerbates the situation. Spread your invoices out on the kitchen table so you can assess your financial situation.
Create a list of all your debts, the monthly amount due, and the due date. Next, create a list of your monthly income. If this fluctuates, the lowest amount for each pay period should be used to determine the most accurate picture. Add your payment dates to this list.
If it appears that you can make all of your payments, including those for utilities, your mortgage, credit cards, and loans, you may be in good financial standing. If you have more income than expenses, but your finances are limited, you are likely treading water.
If so, you may wish to investigate a non-profit credit counseling service. These services can consolidate your monthly expenses into a single, slightly reduced payment, giving you more breathing room.
Additionally, counseling services are willing to contact your creditors and negotiate special terms, sometimes resulting in a reduction of your monthly interest rates. Their services may or may not be accompanied by a fee. This would at least provide a negative response to the query ""Should I file for bankruptcy?""
If, however, you observe that your expenses exceed your income, you may find yourself in the """"beginning to submerge"""" category. If you are making only the minimum payments on your credit card balances and are paying late fees and over-limit fees, it may be time to file for bankruptcy.
This is an ideal time to contact a bankruptcy lawyer. Most attorneys will provide a free consultation to assist you in making a final decision and answering the query ""Should I file for bankruptcy?""
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