When Does It Make Sense to File for Bankruptcy in Alabaster, AL?

Most people do not want to file for bankruptcy. The social stigma associated with the notion of bankruptcy makes people hesitant to file for bankruptcy, no matter how dire their financial situation might be. However, when your debt burden becomes too much to bear, filing for bankruptcy might be the most sensible option available for you.

If You Are Facing Home Foreclosure

If you are behind on your mortgage payments and if the bank is planning to initiate foreclosure proceedings, it might be a prudent idea for you to file for a Chapter 7 or Chapter 13 bankruptcy.

A Chapter 7 bankruptcy can wipe out most of your debts – including your mortgage debt. If you, however, want to retain your house, you must sign a ‘reaffirmation agreement’, wherein you confirm that you owe a debt to the bank and promise to repay them over a period of time.

A Chapter 13 bankruptcy, on the other hand, can stop the foreclosure proceedings and give you sufficient time to clear the overdue, so that you can retain your house.

If You Have a Large Amount of Credit Card Debt

If you have multiple credit cards and if you are not able to meet the minimum payment requirements, filing for bankruptcy might be the best option for you. The exorbitant rate of interest makes credit card debt the worst kind of debt to have, as it can grow unmanageably large in no time. Data shows that consumer debt – credit card debt in particular – is one of the biggest reasons why people file for bankruptcy.

A Chapter 7 bankruptcy can not only erase your credit card debt, but also wipe out many other kinds of unsecured consumer debt. This gives you the fresh start you need to sort out your financial life.

If You Have Unpaid Medical Bills

If you or any of your family members are dealing with a serious illness and the medical bills are piling up, you can wipe it out by filing a Chapter 7 bankruptcy in Alabaster, AL.

Even if you have health insurance, it might not be sufficient to pay for the expenses associated with treating a chronic or catastrophic illness. In some cases, the condition you are being treated for might not be covered under your healthcare plan at all. In such a scenario, the out-of-pocket expenses can pile up fast – leaving you with no choice but to file for bankruptcy.

Wage Garnishment

If you are way behind on your loan repayments, your creditors might try to file a lawsuit against you and get a wage garnishment order from the court. If they manage to do so, up to 25% of your wages could be garnished towards loan repayments.

In such a scenario, you might be left with too little to meet your day-to-day expenses. So, if you believe that your creditors might sue you and try to have your wages garnished, or if your credits have obtained a judgment against you, you should file for bankruptcy.

If You Are Unable to Find a Job

If you have been unemployed for an extended period of time and unable to find a job in the in Alabaster, AL. area, it might be impossible for you to repay your creditors – especially if you have high-interest debts. In such a scenario, unless you know for sure that you can get a high-paying job in the immediate future, you are better off filing for bankruptcy.

If You Believe You Cannot Pay Off Your Revolving Debt

If you believe – based on what you make and the financial commitments you have – that you will not be able to pay off your revolving debt (credit card debt and personal lines of credit) in the foreseeable future, filing for bankruptcy might be the only option left for you.

Unlike secured debt, revolving debt does not have an end date. If you are unable to pay off the principal amount, you might keep paying interest and minimum payments for the rest of your life. So, it is better to eliminate it once and for all and rebuild your financial life from scratch.

Thinking of Filing for Bankruptcy in Alabaster, AL? Talk to Us First

Filing for bankruptcy is one of the biggest financial decisions you will ever have to make. So, it is important to get the right advice before you make a decision.

Attorney Ted Stuckenschneider has over 40 years of experience helping to resolve consumer debt issues in Alabaster, Alabama. He can assess your financial situation, determine whether you should file for bankruptcy, and help you sort out your financial life.

Being an experienced Alabama bankruptcy lawyer, Ted Stuckenschneider can provide you skilled advice and help you eliminate your debt burden in the shortest possible time frame. To get started, call us today at 205-324-5631 or message us online for a free consultation.