Bankruptcy! The word carries a heavy emotional punch and is something everybody hopes to avoid. However, there are circumstances where it is advantageous and to file for Chapter 7 or 13. Let's go ahead and discuss how to determine if bankruptcy is a good choice for you.
The first step is to determine if you can, in fact, pay off your bills and reach a stable financial state. There is no sense in enduring years of bill paying and servicing a debt load you will never be able to pay off. It might make sense to cut your losses now and start rebuilding your life straight away.
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To assess this, take time to sit down and make a budget. Examine and write down your spending and expenses. Be sure to include quarterly or yearly expenses such as insurance or automobile license plate fees. When you are doing this exercise, don't guess. Break out your receipts and statements to be sure you are getting accurate numbers. Once you have all your budget items in place, examine how much "frivolous" spending you engage in. Are all your little $1.00 iTunes purchases adding up to hundreds of dollars over the course of a month? Are you hitting ladies night every week? Do really need new clothes every six weeks? Assess how much of this spending you can eliminate. Now, how long can you live on this restricted diet? Realistically, you should be willing to live with this budget for two to five years.
Next, compare your restricted budget to your income to determine how much money you would have left over each month. By paying this extra toward your debt will you be out of debt, or close to it at the end or your selected timeframe? Keep in mind that only paying the minimum payment on credits cards keeps you in debt for a very long time - it is a rigged game. You will need to pay more than the minimum to get ahead.
If living on the restricted budget will get you out of debt or close to it - go for it! If you will not be able to pay off your debt it makes very good sense to consult with a bankruptcy attorney. An attorney will be able to determine whether you need Chapter 7 or Chapter 13 and will guide through the process. Although, it is not anybody's first choice, it allows you to erase your debt and start over again financially and build new a life. Everybody deserves a second change - so go and ahead take yours.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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