How to Know When It Is Time to File for Bankruptcy

File For Bankruptcy

For many people, bankruptcy is as negative a word as you’ll find in the English language. Nothing positive has ever been attached to the term “going bankrupt” and for good reason. Filing for bankruptcy means that your financial world is in the worst kind of turmoil imaginable.

Bankruptcy will certainly relieve the pressure and erase most, if not all of your debts, but how do you know if you’re making the right decision?

The Right Time to File

The right time to file for bankruptcy is based on several different factors and specific to your situation. But generally speaking, if your liabilities exceed your assets and you are unable to make the payments on your debt or pay for basic household expenses, that is as good a time as any to file.

If you have sold off any assets you can sell and you still can’t bring it all together and debt collectors are calling on a regular basis, it’s probably time to consider bankruptcy as an option.

Pride and Morality

Many people have an issue with their egos getting in the way when the word bankruptcy is mentioned. It might make all the sense in the world financially, but pride just won’t let them take the next step.  This is probably due to the general assumption that someone who is bankrupt is a deadbeat and wouldn’t pay their bills. Of course, if it makes sense for your situation and you refuse to “give in” you aren’t hurting anyone but yourself.

Some people also have a moral objection to filing for bankruptcy, feeling like they got themselves into the financial situation so they should get themselves out of it. This seems like a noble thought, but again, you’re only hurting yourself. People make mistakes and even though it looks like you’re taking the easy way out, that isn’t really the case.

Like Starting Over

It’s important to keep mind that bankruptcy is basically starting over, and once you’re in, you’re in. If you’re a few years into it and start bringing in a lot more money, you still won’t be discharged until it’s over.

Then, after you are discharged, you have to start the whole thing over again. It’s like you have no credit history, so you have to begin the process of building it up like you did when you first started out. Bankruptcy certainly isn’t right for everyone, but it may be right for you. Give us a call and we can talk it over.

Speak to an expert today.