Trying to figure out what bankruptcy is, whether it can help you, and whether it’s the right time to apply can be challenging. There are so many variables to think about, and some people may be afraid that they are making a huge mistake by filing for bankruptcy. Then again, they may worry that they will only continue to be in a financial crisis if they don’t. Perhaps the best way to find out once and for all whether the time is right is to speak with an attorney.

What are signs that filing for bankruptcy may be beneficial?

When people think about filing for bankruptcy, they may be overwhelmed with a sense of failure, as if they should have been better at dealing with their finances. However, life can be really hard and sometimes the unexpected happens that lands us in financial hardship. There are stereotypes and judgements that often accompany bankruptcy, and it’s important for people to realize that it’s there as a way to help you in the long run so you don’t have to keep drowning in debt.

Common signs that bankruptcy may be beneficial for you include:

  • You aren’t able to afford meeting your minimum payments for credit cards and other debts
  • Bill collectors are calling you constantly and incessantly, adding more stress
  • The thought of trying to organize your finances makes you feel out of control
  • You have lost track of how much exactly you owe in debts
  • A creditor has filed legal action against you for unpaid debts
  • Your wages are being garnished by a creditor, as approved by the court
  • You are using credit cards to pay for necessities (groceries, rent, medical care)

I answered yes to at least two of the above signs, what’s next?

If you felt like you could relate to at least a couple of the signs above, then it is recommended that you speak with an attorney very soon. While it can be scary to think about the process to come, depending on your situation, it may be the only route to financial stability in the future. At the very least, it’s certainly time to reassess your current finances with some extra help. 

How can I figure out where I am financially?

If you have lost track of your finances, then you may need to sit down with an attorney who is familiar with bankruptcy so advice. Your attorney may have you gather an inventory of your assets, such as current balance in bank accounts, yearly earnings, cars, stocks, bonds, retirement funds, and savings accounts.

Then, your attorney may have you look up your current credit score and calculate how much in debt you owe to creditors. That way you can get an estimate of your earnings and assets, in comparison to debts that you owe. Essentially, bankruptcy can be helpful for those who owe significantly more than their capacity to earn.