There are many questions bankruptcy attorneys are used to answering. A common question we hear is: “should I file for bankruptcy?” Whether bankruptcy is the right choice for you depends on the specifics of your financial situation. Bankruptcy may help offer protection if your situation stands to become worse and if creditors have taken legal actions to collect your debts. You may want to ask yourself the following questions:
- Are your wages at risk of being garnished? Depending on your situation, wage garnishments can take up to 15 percent of your disposable income. It can become much more difficult to make payments on other debts if your wages are being garnished, such as a mortgage or auto loan.
- Are you at risk of defaulting on other debts? If you are at risk of foreclosure or having your vehicle seized by creditors, bankruptcy can be a helpful option.
- What is your income and how much debt are you carrying? Paying back tens of thousands of dollars in past due debts may not be feasible for some people.
- What type of debts do you carry? Some types of past due taxes or unpaid child support cannot be discharged in bankruptcy. However, bankruptcy can free up resources to pay back these debts.
Why Choose Bankruptcy Over Other Options?
Bankruptcy can help in several ways if you are facing one or more of the situations described above. However, it is not an exhaustive list of reasons you should consider filing. An experienced bankruptcy attorney can help you decide whether filing is the best choice for your situation.
There are major advantages to choosing bankruptcy over other options, such as debt settlement. After you file, an automatic stay can temporarily halt credit collection attempts. The automatic stay may stop efforts to seize your home, vehicle and wages. Bankruptcy may also allow you to discharge some of the debts that caused you problems.
Debt settlement cannot stop creditor collection attempts. In addition, debts forgiven in debt settlement are considered taxable income by the IRS. This is not the case if debts are discharged in bankruptcy.
The Kansas City bankruptcy attorneys at The Sader Law Firm are dedicated to helping people find solutions for difficult financial situations. Our attorneys can help you look at all available options for debt relief, including bankruptcy.