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When Should You Consider Filing Bankruptcy?

When should you consider filing bankruptcy?

Bankruptcy stops collection calls, mortgage foreclosures, lawsuits and wage garnishments. It erases debt. And despite what you’ve heard, bankruptcy may help your credit scores. If the thought of filing for bankruptcy conjures up images of fear, shame and guilt, it may help you to know that some famous people have filed for bankruptcy.  Dave Ramsey, the personal finance guru, filed while in his 20s.  So did Cyndi Lauper, Larry King, MC Hammer and Walt Disney.  They went on to have very happy lives.  

If your debt is piling up and you’re feeling increasing pressure because of it, you should consider filing bankruptcy. The amount that you owe doesn’t matter so much as your ability to pay it back is becoming increasingly unlikely.  You know that ignoring the problem won’t make it go away. 

When to File Bankruptcy

There is no minimum debt to file bankruptcy, but the amount of debt is certainly an important thing to consider when filing.

There are other indicators that suggest that filing for bankruptcy might be a good option for you to consider:

  • You received a foreclosure notice and your efforts to work it out with the lender have failed

  • You’ve had a sudden loss of income, and your bills are piling up

  • A separation or divorce has left you with a lifestyle and bills that you can’t pay on your own

  • A health crisis left you with medical bills you can’t pay

  • You can no longer repay your debts

  • Bill collectors are unwilling to work with you

  • You’ve received one or more debt collection lawsuits

  • You found out the hard way that the so-called debt consolidation company was useless

What Will Filing for Bankruptcy do for You?

  • Stop Creditor Harassment and Collection Activities.  Once you file, the court issues an order called the “automatic stay”. The stay stops most creditor calls and efforts to collect debt.

  • Stop Mortgage Foreclosure and other Lawsuits.  The automatic stay will also stop foreclosure cases and most lawsuits, but not all.  For instance, creditors can still collect support payments, and criminal cases will continue. 

  • Help you Keep Your Home.  If you’re in a foreclosure, filing may help you keep your home. Sometimes you can force a modification of the loan repayment terms.  However, if you can't afford monthly payments or bring the account current, you'll likely lose the house or car once the case is over.

  • Wipe Out Many Debts.  Bankruptcy is very good at erasing most unsecured debts such as credit card debt, medical bills, overdue utility payments, personal loans, gym contracts, timeshare contracts and more.  It won’t erase school loans, most taxes and debts arising from divorce or child support.

Calling Us is the First Step

We have attorneys with years of bankruptcy experience ready to talk to you.  You’ll feel better if you call.  It’s the first step on your road to financial recovery.  Our bankruptcy attorneys will help you decide if filing is the right solution for you.  Schedule a call with us today.


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