People may find themselves in a financial bind for a number of reasons, including job loss, unemployment, divorce, health problems, poorly performing investments, or even the simple over utilization of credit.
Regardless of the reason, bankruptcy may be a way to reduce or even completely eliminate debts, giving folks a fresh financial start. Bankruptcy is not for everyone, however. Here are three questions to ask yourself in order to determine whether bankruptcy is right for you.
Can You Pay Your Bills?
Filing for bankruptcy is a big decision. While bankruptcy certainly has its benefits, it also has significant drawbacks, not least of which is a negative mark that may stay on your credit for years.
As a result, if you are able to pay your bills, it is probably a good idea not to do so. In fact, some people may not even be able to file for bankruptcy to eliminate debts due to the “means test” imposed by federal law.
What Kinds of Debts do You Have?
If your goal in bankruptcy is to eliminate debts, it is important to keep in mind that not all debts are dischargeable in bankruptcy.
Most debts are dischargeable, however, and people who file often completely wipe out unsecured debts like credit card bills, medical expenses, personal loans, and past-due rent.
Notable types of debts that are usually non-dischargeable include student loans, alimony and child support, and certain tax debts.
Do You Have Significant Assets?
Another issue to consider when deciding whether to file for bankruptcy, is your assets. Chapter 7, the most popular type of consumer bankruptcy, involves the liquidation of your “nonexempt” assets.
Non-exempt assets are sold and the proceeds are used to pay back your creditors. Non-exempt assets may include rental property, money to be paid to you from a lawsuit or insurance claim, stocks and bonds etc.
Most filers are able to claim all of their assets as exempt, which means that they are able to keep everything while having most or all of their debts eliminated. If you have valuable collectibles, or other assets that may not be exempt, filing for bankruptcy may put those assets at risk.
Call the Offices of Marilyn D. Garner Today to Speak with an Arlington Bankruptcy Attorney
If you are having difficulty paying your bills on time, bankruptcy may be an option for you. For a free case evaluation, call Marilyn D. Garner today at 817.381.9292 or contact us online.