You have debt, and that debt can be frustrating. You work to pay it down, but it doesn’t seem to be getting better despite your best efforts.
In this kind of situation, you may wonder when it’s appropriate to start looking into bankruptcy. The simple answer is that by the time you’re considering it, you probably should be.
If you’re unable to catch up on payments, don’t see yourself making any headway, are frustrated by missed payments and penalty fees or have poor credit because of past errors, then it’s time to look into how bankruptcy could help.
There is no specific level that your debt should be at before you seek out a bankruptcy
Generally, there isn’t a specific monetary amount that signifies that you need to go into bankruptcy. Instead, you should look at what you owe and how long it will take you to pay it off.
If you think that you could reasonably pay off one of your debts within the next year, then it wouldn’t make sense to enter into Chapter 13 bankruptcy, for example, since that offers a three-to-five-year plan. However, if you map out the payments and see that it will take 10 years, that or Chapter 7 bankruptcy could be a good option.
You also have to think about the kinds of debt you have. Bankruptcy is used best when you have unsecured debts that can be discharged. Secured debts are harder to discharge, but they may be able to be adjusted or renegotiated in a way that makes them easier to pay if you go into bankruptcy.
If you’re already thinking about bankruptcy, it’s time to learn about your legal rights
If you have already contemplated bankruptcy and what it could mean to you, then you should start looking into your legal rights and obligations. A bankruptcy doesn’t always take long, and you could soon have many of your debts cleared. This allows you to start building up your positive credit history, so you can get back to a stable financial position and move forward without overwhelming debt in your life.