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Can I File For Bankruptcy?

Do you feel as though you have too much debt, and not enough income to cover the cost? Have you considered making arrangements with creditors to repay these debts, but don’t feel that these plans have been successful? If so, you may be wondering--"Can I file for bankruptcy?"--and it’s very likely that you can. Here are some factors that will help you make a more informed decision. 

First of all, you should know that bankruptcy is probably best if you have thousands of dollars worth of debt. A few hundred dollars of debt can probably best be worked out with the individuals creditors you owe the money to, and will end up looking better on your credit report in the long run. Bankruptcy is a decision that has helped many people to achieve financial freedom and to pay off large debts, but this is a very important step and should not be taken lightly. There are some credit companies that will not issues lines of credit or loans to individuals with bankruptcies, so keep this in mind if you plan on purchasing a home or new automobile at any time in the future, since a bankruptcy can be on your credit for up to 8 years. There are some companies that are willing to make exceptions, but it’s best to keep your credit options open as much as you can.

In most cases, anyone can file for bankruptcy, but you will need to which chapter of bankruptcy to file under. If you have steady employment, wage garnishments under Chapter 13 bankruptcy may be best for you, since a certain amount will be taken from your check each pay period in order to settle your debts. If you have valuable property, such as a luxury car or expensive home, you may want to consider filing for Chapter 7 bankruptcy, so that you can sell these items and give the money to your creditors. If you own a business, Chapter 11 bankruptcy can help you to use the business as collateral and lengthen the time that you have to pay your debts.

No matter what type of bankruptcy you choose, you should make sure that you have an in-depth conversation with your lawyer and attorney to make sure that this is the best decision for you. Once you file, or even before you make the final choice to file, you may want to attend bankruptcy classes so that you will know how to organize your finances, and what to do when you meet with your creditors to make payment arrangements. Also, if debt consolidation or taking out a second mortgage are viable options for you, consider these before putting a bankruptcy on your credit report.