When is the right time to file bankruptcy?

bankruptcy attorney miami

You are over your head in debt and you don’t know where to turn. It may be time to file for bankruptcy.

Bankruptcy allows individuals and businesses to seek relief from debt and to start over financially. It is there to help people who are honest, but have found themselves drowning in debt with little to no hope of recovery. But, how do you know it is time to file?

When to File Bankruptcy

Do any of these scenarios sound familiar?

You lost your job a while ago and have no employment income or savings left.

You are delinquent on your income or property taxes.

The bank is threatening foreclosure on your home.

Your wages are being garnished due to tax liens or debtor judgements.

You have pending lawsuits due to being far behind on your bills.

Bill collectors are calling day and night.

You are struggling just to make minimum payments on your credit cards.

These scenarios signal that you are in deep financial trouble. They are also common situations where people should seriously consider filing bankruptcy.

What kind of bankruptcy should you file?

There are a number of ways to file bankruptcy, with Chapter 7 and Chapter 13 bankruptcies being most common.

Chapter 7 is commonly called straight bankruptcy. This is where debtor’s assets are sold off to pay creditors. Some states require all the debtor’s assets to be sold, while others offer limited exemptions for homestead property, cars, and certain personal items. The bankruptcy is usually completed within three to four months.

Chapter 13 is a bit different. This is known commonly as reorganization bankruptcy. This kind of bankruptcy allows debtors to pay off creditors over a period of three to five years, while protecting property and certain possessions. The debtor must have a steady source of income for this type of bankruptcy to work.

How to file for bankruptcy

If your finances are at the point where bankruptcy is the only option, you need the assistance of a good bankruptcy attorney. Filing for bankruptcy on your own is possible, but highly discouraged because of the complicated federal and state laws surrounding it. The first step is to talk with a qualified bankruptcy attorney to see what your options are.



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