No one likes getting calls from creditors. If you are in over your head and you have tried other ways to reduce or eliminate your debt, bankruptcy may be necessary to stop those calls. It is not a decision to enter into lightly, though.
Is Bankruptcy Necessary?
There is a difference between a temporary financial setback and a dire situation that calls for filing bankruptcy. To assess whether you need it, ask yourself the following questions:
- Do you have multiple credit cards at their maximum limit?
- Do you pay only the minimum required payment every month?
- Do you pay for living expenses on credit?
- Do you owe more than you can feasibly pay?
If the answer to these questions is yes, you may need to consult with a bankruptcy lawyer Rockville MD. Your attorney can help you look at all your assets and your debts and see if you are a good candidate for this solution.
Do I Qualify for Chapter 7?
Chapter 7 bankruptcy is designed to eliminate your debts and start you over with a clean slate. This solution comes at a cost, though. Your debts are often covered by liquidating assets. You also must meet the following stipulations:
- You do not have enough disposable income to repay your debts.
- You have no previous bankruptcies.
- Your bankruptcy hasn’t been dismissed by a judge.
- You haven’t been convicted of credit fraud.
If you don’t qualify for Chapter 7 bankruptcy, Chapter 13 may be an option.
What Are the Benefits of Chapter 13?
If you are granted Chapter 13 bankruptcy, you are expected to pay off your debts according to the schedule you work out. The benefits of Chapter 13 are:
- You may get to keep assets such as your home or car.
- Your co-signers may not be liable for your debt.
- You may get lower monthly payments that are manageable.
Sometimes debt gets out of control and you need help. Bankruptcy may be a viable option.