Is it time to file for bankruptcy? Filing for bankruptcy is a serious decision, and whether it’s the right choice for you depends on your unique financial situation.
In this post, we’ll explore some of the potential reasons why someone might consider filing for bankruptcy. At the end of this post, you’ll have a clearer answer to the question “When should I file for bankruptcy?”.
6 Potential Reasons To File For Bankruptcy
Here’s an overview of the top reasons you may want to file for bankruptcy:
1. Overwhelming Debt
If you are struggling to manage significant debt (credit cards, loans, medical bills, etc.) and are unable to make payments, bankruptcy can provide relief by eliminating or restructuring your debts.
2. Legal Protection
Filing for bankruptcy triggers an automatic stay, which means creditors can no longer pursue collection actions against you, including wage garnishment, lawsuits, or foreclosure proceedings.
3. Fresh Start
Depending on the type of bankruptcy you file for (Chapter 7 or Chapter 13 in the U.S.), it can lead to a discharge of qualifying debts, giving you a fresh start financially and the chance to rebuild your credit over time.
4. Avoiding Foreclosure
If you are at risk of losing your home due to missed mortgage payments, Chapter 13 bankruptcy may allow you to catch up on overdue payments through a restructured repayment plan.
5. Preventing Wage Garnishment or Lawsuits
If creditors have started garnishing your wages or have filed lawsuits against you, bankruptcy can stop these actions, helping you retain more of your income.
6. Medical Debt
Unpaid medical bills can be a significant financial burden. Bankruptcy may help discharge or restructure these types of debts, especially if they have become unmanageable.However, bankruptcy also comes with long-term consequences, such as a negative impact on your credit score and the potential loss of assets (depending on the type of bankruptcy).
It’s often advisable to explore alternatives first, such as debt counseling, negotiating with creditors, or consolidating your debts.
When It’s Time To Work With A Bankruptcy Lawyer
Consulting with a bankruptcy attorney or financial advisor can help you understand your options and determine the best path forward. If you’re looking for a bankruptcy lawyer in Auburbn Hills, Rochester or Troy, consider Stephanie Krane-Boehmer. She is an experienced Michigan bankruptcy lawyer who can help you through this challenging and overwhelming process.
Find out if Stephanie Krane-Boehmer is right for you – contact Stephanie for a free consultation.
Follow us on Facebook for the latest news.