Bankruptcy is not something you should consider as soon as you find yourself struggling with financial problems. Bankruptcy is not for everyone, but it could be the right option for you in your current situation.
Here are 9 signs that filing for bankruptcy might be a good idea.
1. You have already considered alternatives to bankruptcy
There are different alternatives to bankruptcy, including debt counselling, negotiating with your creditors, or seeking help from a credit counselling agency. If none of these alternatives will work for you, maybe bankruptcy is the best solution left.
2. You are eligible to file for bankruptcy
Not everyone is eligible to file for bankruptcy. You need to be at least 18 years old, to owe at least $1,000.00, and to be unable to meet your obligations. Make sure you are eligible before you consider bankruptcy.
3. Your co-signers will not be stuck with your debt
You don’t want anyone who may have co-signed one of your loans to be stuck with your debt after you file for bankruptcy. Before you consider this solution, try to make sure this won’t happen, and that your co-signers will be protected.
4. You don’t have any debts that won’t be cancelled by bankruptcy
Not all debts can be cancelled by a bankruptcy. Child support and tax debts, for example, will not get erased. If you are struggling with debts that can’t be forgiven, bankruptcy might not be a good solution for you.
5. You know that you won’t loose your home
Before you file for bankruptcy, you need to consider what will happen to your home. If you still have a mortgage to pay, you will need to keep paying it. However, keep in mind that making your mortgage payments will become easier if bankruptcy can erase your other debts.
6. You think your credit card debt will be erased
Your credit card debt will probably be erased by your bankruptcy, unless you have lied about something on your credit card application. If your credit card debt is heavy, make sure it will be wiped out before you file for bankruptcy.
7. You know that other people will learn about your bankruptcy
Bankruptcy can be an intrusive process, and you need to be aware that other people will learn about your financial problems. You need to accept this. If you are not fine with it, you should think twice before filing for bankruptcy.
8. You have discussed with a licensed insolvency trustee
A licensed insolvency trustee can answer your questions about bankruptcy, and help you figure out if you are eligible, and what will happen to your possessions. You need to speak with a licensed insolvency trustee if you are serious about filing for bankruptcy.
9. You are ready to take your duties seriously
After filing for bankruptcy, you will have to perform certain duties. You need to be ready to disclose all assets and liabilities, and to attend all the meetings and counselling sessions called by your trustee.