Do you have debts that just keep piling up despite your best efforts to pay them off? It might be time to consider declaring bankruptcy. As you make your decision, consider the answers to these three questions. Then contact Winterbotham Parham Teeple, a PC at 800.400.9000 right away to speak with a bankruptcy attorney.

Which debts are the most concerning to you?

It is critical to consider which debts are the most burdensome because this may influence the type of bankruptcy you declare. There are two basic options for filing for bankruptcy:

For people who are heavily burdened by unsecured obligations such as credit card debts, medical bills, payday loans, some back taxes, personal loans, and other debts that are not secured by any kind of collateral, Chapter 7 bankruptcy is frequently the best option. As long as you qualify, Chapter 7 bankruptcy will allow you to completely discharge any eligible debts.

If you are more concerned about secured loans, such as your home or car than unsecured loans, Chapter 13 bankruptcy is may be the best option. Under Chapter 13 bankruptcy, you have the power to catch up on mortgage arrears or even consolidate and modify the terms of a car loan. Chapter 13 can also help people struggling with debt that must be paid and cannot discharge. The consolidation plan is repaid over a period of 3-5 years Any outstanding debts that were not required to be paid are forgiven at the end of the plan.

Do you make a good living? Can you maintain your current living expenses?

When considering your current financial situation, it is important to consider if you are able to maintain your current expense and if it is feasible for you to continue with any debts you currently have. You may find your income only covers your basic living expenses, causing you to either live off of or fall behind on your credit card obligations. Chapter 7 filing may be a good solution to ‘wipe the slate clean’ so you can focus on your own monthly needs instead of your debts.

Even if you are currently maintaining your monthly minimum payments on your debts, you may realize that continuing to do so will not make your situation better. Your debts will likely take decades to pay off and one missed payment or maxed out credit card can leave you with a spike in interest rate and an inability to pay. A Chapter 13 bankruptcy will allow you to consolidate your payments, usually at 0% interest, so you can be debt free in 3 to 5 years. Depending on your financial circumstances, you may even be able to file for Chapter 7 and get rid of the debt completely.

Have debt collectors started bothering you?

If you have already had bills sent into collections and collection agencies are now contacting you day and night, it may be a good sign to stop waiting and contact a bankruptcy attorney. Why? Because once you file for bankruptcy, all collection efforts must cease. This can provide much-needed relief from the vexation of debt collectors. Failure to take care of your debts at this point may result in the creditors taking action against you, leaving you at risk of judgment liens, wage garnishments, repossessions, bank levies or even foreclosure. Bankruptcy will protect you from your creditors so that these actions cannot take place.

If you want to learn more about your bankruptcy options, contact Winterbotham Parham Teeple, a PC at 800.400.9000 immediately.