Should You File For Bankruptcy?

Bankruptcy is a way to relieve yourself of your debts when you aren't able to pay them back. Not being able to pay your debts can happen for a number of reasons. A divorce, unexpected medical costs, or even a job loss can all contribute to the cause of not being able to pay back your debts. Filing for bankruptcy may or may not be for you. Read on for further information regarding bankruptcy to see if it is right for you.

What Is Your Debt To Income Ratio?

Add up all of your debts. This includes all of your monthly bills that you pay for: insurance, water/sewer, loan payments (vehicle, mortgage, credit cards, etc.), energy/gas, and any other payments you make per month. Do not include things such as going out to eat, clothing expenses, or any other non-essential items in this list. Add up everything you have, then subtract that from your monthly income. What do you have leftover? If the answer is nothing, you may want to consider filing for bankruptcy. 

Are You Borrowing Money From Others?

Do you have to borrow money from family members or friends each month just to make your monthly payments on debts? Are you going to cash advance places to borrow from your next paycheck numerous times in a month? If you're borrowing money just to get by each month, bankruptcy may be your salvation. You can only borrow so many times before you end up severely in debt.

Are You Paying For Necessities Using Credit?

If you are paying for necessities such as gas and groceries using a credit card, bankruptcy may be the right path for you. You're leading yourself further and further into debt by using a credit card that is accumulating interest.

Is There Any Chance For Repayment?

If you don't foresee any change in your circumstance or any chance to repay your debts anytime soon, you may want to think about bankruptcy before you're too far in debt. Try all routes to repay your debts, such as credit counseling and debt consolidation before you file. If you're able to consolidate your debts, it may help you if you only have to pay one large bill, rather than multiple smaller debts. Talk to your creditors and loan companies about any type of assistance such as zero interest for a few months or lowering your interest rate until you can get back on your feet.

Filing for bankruptcy is up to you, but if you can't keep up with your bills, are borrowing money left and right from friends and family, or are using credit cards to help pay for necessities such as gas and groceries, you may want to think about filing. Call a bankruptcy attorney today for a consultation and to find out more information to file chapter 7 bankruptcy.