Filing for bankruptcy relief is a serious decision. Many financial matters should be considered before proceeding with a Chapter 7 or Chapter 13 bankruptcy case. While bankruptcy gets rid of debt, there could be other financial consequences of filing for bankruptcy.
Therefore, if you have debts you cannot pay, contacting a Mentor bankruptcy lawyer is a wise step. An experienced bankruptcy attorney helps you weigh your options and decide whether bankruptcy is the best debt-relief option for you. Also, a lawyer helps you decide the best timing for filing a bankruptcy case.
Analyzing Your Financial Situation
The first step in determining whether to file for bankruptcy is to analyze your entire financial situation. Filing for bankruptcy is not just about getting rid of debts. A bankruptcy case can impact other financial areas. For instance, filing for bankruptcy under Chapter 13 impacts your disposable income for several years, as you are required to commit to a three-year to a five-year bankruptcy repayment plan.
Therefore, before you decide whether to file for bankruptcy, you need to carefully consider how filing for bankruptcy impacts all areas of your finances. Filing for bankruptcy gets rid of debts, but does it put any of your property at risk of being sold by a Chapter 7 trustee? Does filing for bankruptcy resolve your main financial problem? If your debt problem is recent income tax debt, filing Chapter 7 may not help because this debt is non-dischargeable (cannot be forgiven in bankruptcy).
During a bankruptcy consultation, we review your entire financial situation. We analyze the types of debts you owe, as well as your income, expenses, and property. We determine how filing a bankruptcy impacts your overall financial well-being.
We then compare the various debt relief options available to determine which option is best for you. Each debt relief option has pros and cons, including bankruptcy. The key is to determine which option gives you the best results with the least risk of negative consequences.
Some important matters we consider when deciding if you should file for bankruptcy include, but are not limited to:
- Do you qualify for Chapter 7 or Chapter 13?
- Do you have debts that are non-dischargeable, such as alimony, child support, income taxes, or student loans?
- Do bankruptcy exemptions protect the equity in your property, and what is your risk of losing property if you file for bankruptcy relief?
- Are you facing wage garnishments, debt collection lawsuits, foreclosure, or repossession?
- Do you anticipate receiving an inheritance, wage increase, or other substantial assets or resources soon?
- You anticipate moving to another state this year, or you have only lived in Ohio for under two years?
- Whether you purchased a new vehicle within the past 910 days?
- Have you repaid family or friends recently or made large payments to certain creditors recently?
- Whether you took a cash advance or purchased luxury goods recently?
- What are your other debt-relief options? Do alternatives to bankruptcy make sense in your situation?
- Are you expecting to incur more debt soon, such as major surgery or a major home repair?
- Have you transferred or sold property for less than market value?
Depending on your situation, there could be other factors to consider before filing for bankruptcy. A careful analysis of all factors is necessary to decide if bankruptcy is right for you.
Signs You Need to File for Bankruptcy
In some cases, the benefits of filing for bankruptcy may be clear. Filing for bankruptcy is the best way to eliminate debts and protect your property in some situations. In other cases, filing for bankruptcy is the best way to stop further debt problems.
Some signs that you may want to consider filing for bankruptcy under Chapter 7 or Chapter 13 include:
- You have no money left over at the end of each pay period to repay debts after paying for your necessary living expenses.
- Using credit cards to pay for necessary living expenses, such as food, utility bills, and fuel.
- You have been diagnosed with a disabling condition.
- You are facing wage garnishment, foreclosure, tax levies, or repossession.
- A creditor files a debt collection lawsuit or is about to file a debt collection lawsuit.
- You are unemployed.
- You are using retirement savings to pay living expenses and debts.
- You are considering using an equity line or borrowing money against your home to repay debts.
- You are about to begin a new job or receive a raise, but you have substantial debts you cannot repay.
- Creditors are threatening or harassing you.
The above list of reasons to file for bankruptcy now is not an exhaustive list. Each person’s situation is unique. Therefore, seek advice from an experienced bankruptcy attorney in Mentor to determine if you should file for bankruptcy to get rid of debts.
Contact a Mentor Bankruptcy Attorney for More Information
Attorney Heather Moseman is dedicated to helping individuals who are suffering because of problems with debt. Contact our law firm by calling (440) 255-0832 to schedule a bankruptcy consultation with an Ohio bankruptcy attorney.