You’ve missed a few payments on your credit cards. You’re a month behind on one of your utility bills. You’ve told your landlord you absolutely will be able to pay your rent…it will just be two weeks late. If you’re in this financial situation and there doesn’t seem to be any solution in sight, is it time to file bankruptcy? If you’re just a little behind on your bills, is bankruptcy the solution, or should you work towards some other way of dealing with your debts?
How Bad Is Your Debt?
The first thing to look at is your debt. How bad is it? Here are a few things to consider:
- Can you make your minimum credit card payments?
- Are you able to catch up on your utility bills periodically?
- Do you make your rent/mortgage payment at some point during the month?
- Do you add more debt to credit cards every month simply to cover living expenses?
If you’re thousands of dollars in debt and are continuing to add more every month, bankruptcy may be the right solution. If you’re behind on your utilities but are able to make payment arrangements or catch up on them every few months, it may not be time to give up just yet. Your debt is certainly one major factor in deciding if bankruptcy is right for you, but there’s something else you have to consider.
How Is Your Income?
If you have stable income, you may not want to declare bankruptcy just yet. The negatives of bankruptcy will make it very difficult for you to get a loan, buy a house or car, or get a new credit card anytime soon. In fact, it can impact your credit for up to ten years in some cases. It’s better to look for another solution first.
Is your income going to increase within the next six months to a year? If so, you may be able to hold out that long. If it’s not or if you’ve had a major medical issue that has made it difficult for you to work, you may be facing a much harder decision. Medical bills can pile up quickly, and while you may be able to get workers’ comp or temporary disability, you may still find yourself getting buried under bills.
If you do decide bankruptcy is right for you or want to talk about your options, Michael F. Kanzer & Associates can help. Contact our office today to learn more about bankruptcy.