When Should I File for Bankruptcy?

By: Timothy McFarlin | Published: February 12th, 2014 | Category: Bankruptcy

It can be extremely stressful to see your bills pile up with no end in sight. If you are receiving calls from debt collectors, it is time to learn about your options. Bankruptcy is not ideal for everyone struggling with debt, but it may be the best way for you to start over, debt free.

Here are a few questions you need to ask yourself when considering bankruptcy:

  • Are bill collectors calling you?
  • Are you only able to make minimum payments on your credit cards?
  • Are you unsure how much you are in debt?
  • Do you feel stressed whenever you think of the amount of money you owe?
  • Do you regularly use credit cards to pay for necessities?
  • Are you currently considering debt consolidation options?

In general, individuals who have answered “yes” to a few of those questions may benefit from bankruptcy.

First, you should take stock of all of your finances. Make a list of all of your liquid assets such as your stocks, bonds, vehicles, retirement funds, and non-bank account funds. Then, make a list of all of your bills and credit statements. If the value of your assets is significantly lesser than your debt, you may want to consider bankruptcy.

The next step is to review which type of bankruptcy fits your needs. A Chapter 7 bankruptcy will liquidate your assets to pay off as much of your debt as possible. The cash from your assets will then be distributed to creditors. Within four months you will receive a notice of discharge. For those who have property they wish to keep, Chapter 13 may be a better option. A Chapter 13 bankruptcy is a reorganization bankruptcy in which you can pay off your debts over a period of three to five years.

No one should face these types of difficult decisions on their own. Don’t be afraid to ask friends who have been in a similar situation. Better yet, contact an Irvine bankruptcy lawyer at McFarlin LLP who will advise you about the best possible solution for you and help you get that fresh start. Starting with a call to (888) 728-0044, you can have the help you need to protect your assets and pursue the right options.

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