Bills have been piling up and you have no idea how you’re going to pay them. Should you declare bankruptcy?
Should You Declare Bankruptcy?
It can feel impossible to decide on declaring bankruptcy. Sure, the bills are piling up, credit card companies are calling, and you have no idea when it comes to figuring out how you’re going to pay your debt. But is it really time to declare bankruptcy?
There are some options that you might want to consider, if you haven’t already yet, and a few questions to ask yourself.
Number one, are you able to reduce your debt or work out a favorable payment plan with your creditors? Many times creditors will work with people that are delinquent on their payments to help negotiate terms so that a debtor can pay their debt. Before you throw bankruptcy into the mix as a potential option, explore alternatives such as credit or financial counseling, negotiating with creditors, credit card consolidation, loan modification, and loan refinancing.
The following indicate a good time for when to seriously consider declaring bankruptcy:
- You’ve been out of work for an extended period of time and you have no unemployment income or savings
- You are delinquent on your taxes
- Your home is nearing foreclosure
- Your wages are being garnished
- You are facing lawsuits for delinquent bills
The decision to declare bankruptcy is different for everyone. Speaking with a professional about your particular situation can help you evaluate your options.
Types of Bankruptcy for Individuals
If you do decide to declare bankruptcy, you should be familiar with the most common types of bankruptcy for individuals: chapter 7 and chapter 13:
- A chapter 7 bankruptcy liquidates all non-exempt assets to pay off the debt you owe to creditors. This is typically considered the best option when you have little income and a large amount of unsecured debt. Unsecured debt includes: medical bills and credit cards.
- A chapter 13 bankruptcy reorganizes debt and establishes a repayment plan to pay debt owed to creditors. This is considered the best option for debtors that have income, but are needing some breathing room to be able to catch up on outstanding debts.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 7 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008