Is Now The Time? When You Might Consider Bankruptcy

Posted on

Financial difficulty can happen at any time. You can lose your job or have a medical emergency that prevents your ability to work. For many, long periods of time without a paycheck can lead to devastating financial situations. In some cases, you may want to consider bankruptcy to help you get back on your feet. However, bankruptcy is not always necessary. The following are some viable reasons why you may want to consider filing for bankruptcy:

Your Mortgage Is Late

If you are significantly late on your mortgage and you do not anticipate being able to bring your note current anytime soon, you may consider filing for bankruptcy. Bankruptcy can potentially save your home from foreclosure. A bankruptcy attorney can negotiate a mortgage modification to help make your payments more manageable.

You Constantly Shift Money Around

Another potential sign that you could benefit from bankruptcy is when you are constantly moving money around to meet your normal monthly expenses. If you are moving money from your savings account or borrowing from your retirement to pay your bills, you could benefit from a debt restructuring through bankruptcy. If you take money from these important accounts, you not only will not ever catch up, but you will deplete the money you need for your future. You also do not want to rely on this money. At some point, the money will run out and you will be left unable to pay for anything. Instead, consider filing for bankruptcy to reorganize your debt.

You Only Make Minimum Payments

If you cannot pay more than minimum payments on your debt, you will not be able to make a dent in your balance. The main portion of your payment is only going to cover the interest on your accounts. Very little money goes to the principal of your loan. This is due to the high interest rates that are commonly attributed to these types of accounts. If you are unable to pay these balances off, you could be stuck with them for years. When you have multiple accounts like this, it can be difficult to gain traction with your payments. Bankruptcy can help you. Depending on the type of bankruptcy you file, you can either reorganize the debt into more manageable payments to pay them off more easily, or you can have them discharged completely.

Bankruptcy can be a major lifesaver in certain situations. If you are considering bankruptcy, be sure to speak to a bankruptcy attorney for more information, or reach out to a local law firm, like Martinez Law Firm.