If you are in debt and don’t feel like you are making any progress paying any of it off, then you might be thinking about whether or not it’s a good idea to file for bankruptcy. For a lot of Americans, bankruptcy can be a smart financial decision. It is also one that will impact your finances in both positive and negative ways and so you have to be sure of your decision. How can you be sure that it’s time to file for bankruptcy? Here are two questions that you need to ask yourself.
Have You Considered Alternatives?
Bankruptcy isn’t always the only option. Before you file for bankruptcy, try to consider any other alternatives that you might have. For instance, would taking a second part time job help you to pay off your debt? Would making any extra cash help? Would budgeting your money help to alleviate some of your debt? Sometimes, spending money smarter can help you to pay off debts. Other alternatives may include other payment plans. For instance, if you have medical debt, you may be able to enter into an agreement where you pay a certain amount every month. If none of the alternatives will help you to get out from under your debt, then you may want to file for bankruptcy.
Is Your Situation Long-term?
It’s important to think about whether your situation is temporary or if you expect that it will last for a long time. For instance, if you recently lost your job but may receive unemployment benefits or have new job prospects that will pay as much, if not more, than your last job, then you may not have to jump into bankruptcy right away. When you file for bankruptcy, you do not want to consider your current income, but also your income over the last six months. If you have financial issues right now, but normally pay all of your bills and were not struggling prior, then you may want to wait before you file.
There are a lot of questions that you have to ask yourself before you choose to file for bankruptcy. If you’re debating whether you need to file, then it might help your situation to talk to a professional. A bankruptcy lawyer, can help you determine whether you need to discharge your debts through the help of bankruptcy. Set up a consultation as soon as possible.