There are many myths surrounding the bankruptcy process and who is qualified to file for bankruptcy. Most people assume that you have to be behind on bills, facing foreclosure on your home, or having your vehicle repossessed before you can turn to bankruptcy for financial relief and assistance. However, this isn’t the case. Anyone can actually file for bankruptcy whenever they want, although there are some types of bankruptcy that do have specific requirements. Your options may also be limited if you’ve filed for bankruptcy in the past.
Bankruptcy Is Designed to Help Before Financial Ruin
Many assume that they have to be in some stage of financial ruin before bankruptcy can help, but that’s not what it’s really designed for. The goal of bankruptcy is to help consolidate debt into one payment or, in some cases, eliminate certain debts. It’s not a “get out of debt free” card in that you cannot use it simply to defraud creditors, nor can you run up a large amount of debt and plan on having it all discharged during bankruptcy.
What you can do, however, is realize that you’re in a financially difficult situation where your income is not enough to cover your debts plus your monthly living expenses. This situation could occur for many different reasons—loss of a job, overwhelming medical bills, and divorce are just a few things that can eventually lead to financial distress.
Most People File Too Late
Bankruptcy is usually seen as a last resort, and that’s not necessarily a bad view. However, because of this, few people take advantage of bankruptcy when they should. Instead, they wait until they’re behind on credit card bills, car loans, and even their mortgage payment. By this time, their credit score and credit history have taken a severe beating, and it can be very difficult to recover. Bankruptcy will help, of course, but the damage has already been done.
By filing bankruptcy before you reach this point, you can help your financial stability and come out of the process in a much better place. If you recognize that you’re beginning to fall behind financially and don’t see a solution coming soon, don’t wait to start looking at bankruptcy as an option. The experienced legal team at Michael F. Kanzer & Associates can help you determine if this is the right choice for you. Contact us today to schedule a meeting.