When Should I Consider Declaring Bankruptcy?

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Bankruptcy is not something that should be taken lightly. Declaring bankruptcy is a big decision, so it’s a good idea to make sure that it’s the right move for you. We recommend taking a close look at your finances and then consulting a Bergen County Chapter 7 bankruptcy lawyer.

Can I Wipe Out All of My Debts By Declaring Bankruptcy?

One thing that is important to remember is that declaring bankruptcy does not necessarily get you a blank slate. Certain types of debt are dischargeable in bankruptcy, but others are not. If the debt weighing you down is mostly from credit cards and medical bills, bankruptcy can help. This process will not help clear certain debts though, including:

  • Certain tax debts
  • Student loans
  • Alimony
  • Child support

Should I Try Negotiating Before Declaring Bankruptcy?

Some people do not realize that their creditors can occasionally be negotiated with. The IRS will often work with people who owe large tax bills, allowing them to pay off their debt over time. Credit card companies might also allow you to switch to a different payment plan that allows you to keep an account in good standing while slowly paying off what you owe.

Make sure that you exhaust these options before turning to bankruptcy. Declaring bankruptcy can affect your credit score for years and rebuilding your credit can take some time. This isn’t an easy process to go through, so do not rush into it as if it is your only option.

What Level of Debt Should I Be In Before Considering Bankruptcy?

You should also consider how long it would take to repay your debt in the best-case scenario. Consider your debt and your income. Consider your expenses and any assets you could possibly sell off. Does it look like you would be able to pay off your debt in a reasonable time period, like three to five years? If that does not look possible, declaring bankruptcy could be the way to go.

What Can a Bankruptcy Lawyer Do to Help Me?

Declaring bankruptcy is a paperwork-intensive process. You have to be sure that you are accurately accounting for all of your assets and liabilities. Messing up at any stage of this process is going to just cause you more issues. A bankruptcy lawyer can ensure that this all goes a bit more smoothly, whether you declare Chapter 7 or Chapter 13 bankruptcy.

Schedule an Appointment With Our Team

If you have read all of this and believe that declaring bankruptcy is the right move for you, contact the Law Office of Boyd & Squitieri. We can schedule a consultation and tell you more about this process. If bankruptcy is the right path for you, we are ready to help you make moves toward a better financial future.