Life is stressful enough without having to live with persistent debt. Since most schools do not teach the options under bankruptcy, and most on the street do not adequately understand what is involved, you should seek experienced counsel when making such a consideration. This article is thus intended to provide you with ten circumstances under which you should consider using the power of the federal Bankruptcy Code.
Here goes:
1) Threats of foreclosure or repossession: The primary purpose of filing bankruptcy is to protect your assets. If you have fallen behind on your mortgage, vehicle, or other payments, your creditors will threaten to take back their collateral. A bankruptcy can stop your creditors from proceeding any further and give you a chance to catch up with your payments.
2) Persistent collection efforts: Creditors can be persistent. They try to pressure payments out of you before you use the funds to pay other creditors or even necessities. A bankruptcy will stop most, if not all, of this contact from your creditors and make your telephone and mailbox friendly again.
3) Tax liabilities and judgments: Most people are not aware that tax liabilities and judgments are considered as liens in Pennsylvania. While a bankruptcy has limited impact upon liens, it can give you the opportunity to address the underlying claims more on your terms.
4) Bank garnishments: If a judgment is entered against you, the creditor can issue a notice to your bank that the debt is owed and that the bank is required to freeze your accounts. While you are given 20 days to respond, your account remains frozen until the matter is resolved. If no defense is provided, the creditor will receive the deposits up to the amount of the judgment and costs. A bankruptcy will impose a stay to such garnishments automatically to terminate the seizure and the funds will need to be released.
5) Falling behind on credit card and personal loan payments: Often minimum payments can be made on such obligations, but eventually you will realize that such obligations are no longer maintainable. A bankruptcy can obtain a legal forgiveness from these debts so you can start your financial future with a fresh start.
6) Borrowing from retirement accounts: As indicated previously in this article, bankruptcies primarily protect important assets. One of the most important assets you have for your future well being dwells in your retirement account. Why risk your financial future when you can rid yourself of such debt?
7) Using credit to pay for essentials: When you use credit cards or pay-day loans to purchase necessities such as food, utilities, or rent, and then use your income to pay for the high interest credit to keep it alive, you have created a Catch-22 that you may never escape. Rather than chasing your tail, you can avoid any future obligation to make these payments and thus free up income to pay directly for these necessities.
8) Emotional and physical stress: When the persistent stress of financial burdens gets to be overwhelming, it is time to consider ending the madness in a responsible manner. Such stress threatens your health and thus your ability to support your family and yourself. Dealing rationally with your debts offers both short-term and long-term benefits.
9) High debt-to-income ratio: Next time you receive a credit card statement, pay particular attention to the notice that calculates how long it will take to pay the balance presuming you no longer charge anything further to the account. Can you realistically make such payments for the better part of your remaining lifetime? Will you need to use your retirement income and Social Security benefits to make the payments? Will your estate be required to pay any remaining balance? You can terminate these obligations weighing upon your through the legal forgiveness provided for in a bankruptcy.
10) A need for peace of mind: Eventually, the inability to deal with unrelenting debt will cause you to realize that the situation is not sustainable. Most debt is incurred due to circumstances beyond your control, such as illness, divorce, business failure, etc. Even if you are to some extent responsible for your situation, you have learned your lesson and should be ready to move on with your life. A bankruptcy will wipe this slate clean and allow you to live a less burdened life. No one is obligated to carry such anxiety for the rest of their life.
We are all imperfect, so there is no sin in falling down, only in not getting up. If you identify with any of these circumstances, or have any other financial burdens, contact CGA Law Firm to discuss how we can use our experience to help you manage your financial woes.
