It does not take much for people to suddenly find themselves drowning in debt. A job loss, pay cut or unexpected medical bills are enough to destroy a comfortable financial position. Furthermore, high debt levels can sneak up on people from all income levels. While you have been struggling to make ends meet, the chances are good that one of your Long Island neighbors has also been dealing with debt issues.
For some people, a credit counseling program might be enough to help them get back on track. For others, this may not be enough. While bankruptcy seems like a bad word for many people, in reality, it is actually a very effective tool that might be able to help you reorganize your finances and escape heavy debt. If any of the following debt situations apply to you, it might be time to take a look at bankruptcy.
Debt collectors are suing you
When you get too far behind on debt payments, the creditor might sell your debt to a collection agency. If you do not return calls, answer letters or make any payments to the debt collector, then the agency might file a lawsuit in an attempt to force you to pay. By filing for bankruptcy, you might be able to gain some legal protection from these debt collectors.
If a creditor wins a judgement against you in court, they might request a wage garnishment order in an attempt to collect the debt. In other words, in addition to the tax withholdings your employer will take out of your check, it will also be reduced by the amount of the garnishment. Bankruptcy might grant you an automatic stay which could halt the garnishment.
You can’t keep up with your bills
If you are using credit cards to pay your utility bills or to buy groceries because you do not have enough cash available in your bank account, this could be a sign that it is time consider bankruptcy. Keeping up with the minimum payments on your credit cards might be too much also and you could soon find yourself with a few maxed-out credit cards and no way to make the payments.
If any of the above situations apply to you, it could be worthwhile to carefully consider and seek guidance on your options, including the possibility of filing for bankruptcy.