Deciding whether to go bankrupt? That seems like an odd phrase, doesn’t it? After all, who would choose bankruptcy?
Actually, it’s not always such a bad idea!
Bankruptcy is a complicated and uncertain process, but for people facing some financial jeopardy, it can be a real lifesaver. Contrary to popular opinion, bankruptcy does not mean financial ruin. In fact, it can be the thing that saves you from it.
It’s probably better to think of bankruptcy as a strategic choice for one to make during tight times. But is it right for you?
NerdWallet.com recently explored that topic and offered 5 questions that any individual should ask when considering a personal bankruptcy filing:
- Which kind of bankruptcy? — Individuals generally have two options: Chapter 7 and Chapter 13. The latter is the better option if you have assets and a steady income. It allows you to set up a repayment plan that will ultimately discharge your debts in a few years’ time. Chapter 7, meanwhile, usually requires a more substantial offloading of assets. Both forms have pros and cons, so talk with a Phoenix bankruptcy attorney before proceeding.
- Can you afford it? — The filing fees do add up. That said, never assume you can’t afford bankruptcy without talking to a professional first. After all, the whole process is designed for people facing financial difficulties. You might have options. An attorney can help.
- Will it help? — There’s a very good chance the answer is “yes,” but not always. Some debts can’t be discharged by bankruptcy, so make sure the filing is worth your while.
- Do you qualify? — Those petitioning for Chapter 7 will need to pass a means test. Those with a lot of disposable income are less likely to qualify. Chapter 13 does not impose the means test.
- Have you thought it through? — Bankruptcy is a serious federal procedure. The decision is not to be made lightly. Do you homework, consider the long-term implications, and always consult with an attorney before proceeding.
If you’re having trouble repaying your debts in Arizona, a Phoenix bankruptcy attorney may be able to help. We handle both Chapter 7 and Chapter 13 bankruptcy filings. Contact us today to learn more.