Anyone who has ever been through bankruptcy can verify that it is the lifeline they never wanted to need. Something went wrong. For individuals that are the main bread-winner or head of household, the situation is weighted by the fact that whatever happens will impact multiple people.
But when obligations exceed income and other options have been exhausted, the decision to file for bankruptcy can be the difference between keeping your family’s home and car versus having them taken away. Snowballing debts can prevent you from providing food, shelter and retirement.
Use this checklist to evaluate your candidacy.
If the following five statements are true, bankruptcy might be the best route for you and your family:
- You are allowed to file.
Most can, but not everyone. The law will not allow people to file for bankruptcy within a certain time frame of a previous bankruptcy discharge (between 2-8 years, dependent on the chapter). Also, there are restrictions for filings based on if someone has the ability to pay back their debts. An individual with enough “means” (as determined by the “means test”) is ineligible for a Chapter 7 case.
- Improvement is not in the future.
Is there a change on the horizon? Can you or your spouse’s income level change, or is family money a possibility? If your situation seems unlikely to improve, filing for bankruptcy might be your best option.
- Some of your debts are dischargeable.
Unsecured debts like credit cards, personal loans, and medical debt can be wiped clean through the bankruptcy process. Other types of debt, like unpaid child support, recent tax obligations, and student loans are generally not eligible for discharge. If some of the debt making your situation unmanageable can be discharged, bankruptcy could be the right path.
- You understand and accept the negative repercussions to filing.
Most states require an online class or some type of counseling to ensure people know what they are getting into. For some, learning that a bankruptcy filing will stay on their credit record for ten years, even while improving their credit rating, is cause for pause. Other factors include how it affects property owned jointly, what mistakes could cause your case to get dismissed, what assets or property you could lose if the proper exemptions are not claimed, and a whole lot more. It is important to get educated or have a seasoned bankruptcy practitioner perform a qualification analysis.
- Bankruptcy will improve your situation.
The point of a bankruptcy petition is to give yourself a fresh start with an improved ability to provide your family a better life. Only you can make this evaluation, though professional assistance will make sure you know what bankruptcy can and cannot do. For some, halting repossessions, evictions, or stopping other legal actions are reason enough.
Get the expertise your family deserves.
Any decision regarding your family’s future well-being deserves careful and thoughtful consideration. For a family teetering on the brink of bankruptcy, the decisions you make are of crucial importance. Taking action could be time-sensitive, and we can help. Let our expertise guide you through the complicated nuances of bankruptcy court. Contact the Law Offices of Jeffrey Lohman today.
The Law Offices of Jeffrey Lohman, P.C. is considered a debt relief agency pursuant to federal law. We are attorneys who help people file for bankruptcy relief under the Bankruptcy Code.