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When Bankruptcy is the Financial Reset You Need

There are times you may find yourself needing to take a step backward if you want to move forward. Deciding to file for bankruptcy is one of those times, a chance to hit the reset button on your financial standing. Used in the right way at the right time, bankruptcy can help save what assets you have while preserving your peace of mind. Here are four signs bankruptcy maybe your best option.

You Can’t Meet Your Financial Obligations

If you’re unable to cover everyday expenses and/or pay off existing debts without relying on credit cards or loans, keeping up may prove to be too much of a struggle. Many people find themselves in this situation due to a job layoff, unexpected illness, or catastrophic loss. In fact, two-thirds of people who file for bankruptcy do so due to medical issues that aren’t covered by their health insurance.

You Face the Loss of Your Home

The number of foreclosures may have declined, but many people still struggle to keep up their mortgage payments. If you’ve reached the point where foreclosure is a real possibility, bankruptcy can help you keep your home and get you caught up on payments.
For example, if you file for a Chapter 13 bankruptcy, you can keep your house and develop a plan for making payments moving forward. Once your case is discharged and assuming you’ve continued to make regular payments, you can avoid foreclosure proceedings.

Debt Collectors or Other Debtors are Suing You

At some point, a collection agency will likely attempt to collect one or more of your outstanding debts. Sometimes lawsuits are filed to force you to pay. Fighting a debt collection lawsuit can be a further strain on your finances and peace of mind. Bankruptcy offers some legal protections against debt collectors, including prohibiting collection lawsuits being filed against you.

Your Divorce is Financially Burdensome

When you decide to divorce, it has a huge impact on your assets and finances. Next to medical expenses, divorce is often mentioned as a leading cause of a bankruptcy filing. Some people decide to file for bankruptcy and divorce at the same time, but there are good reasons to do one before the other. An experienced attorney who’s knowledgeable in both of these areas can make all the difference in preserving and protecting your financial interests. Keep in mind that some debts related to divorce, such as child support obligations, cannot be discharged in bankruptcy.

Is it Time to Declare Bankruptcy?

Declaring bankruptcy has significant and long-ranging effects so it’s important to discuss all your options with someone who understands Florida’s bankruptcy laws and exemptions and can help you decide if:

  • You qualify for Chapter 7 or Chapter 13 bankruptcy.
  • Your debts qualify for bankruptcy.
  • The impact of bankruptcy is financially and personally worth it.

Bankruptcy can affect your private life, your credit score, and more, so deciding if it’s the right decision for you is not an easy yes or no. If you’re unable to find an alternative way to get out of debt in the next five years, or if debt-related stress is affecting your health and life, then, yes, bankruptcy may benefit you

The Bottom Line

It’s important to weigh all the pros and cons before taking this huge financial step, but it can be just what you need to do to get back on track and come out stronger than ever. An experienced bankruptcy attorney can help guide you through the process and get you the outcome you deserve.

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