3 Signs It Is Time to Consider Bankruptcy

 Posted on October 23, 2024 in Bankruptcy

Deciding to file for bankruptcy is never easy. You may have been taught to view bankruptcy as a type of financial failure, but in reality, it can be a very big positive. People find themselves in extreme debt for a lot of different reasons that have nothing to do with financial irresponsibility. You may have had an excellent job when you took out a loan only for the company you worked for to close without warning, or had a serious accident that left you unable to work and caused you to miss credit card payments. Declaring bankruptcy can work as a sort of "reset button" on your financial life. You can get out of debt quickly and begin rebuilding your credit right away. An experienced Conroe, TX bankruptcy attorney can help you decide whether it is time for you to start considering bankruptcy.

Your Creditors Are Constantly Trying to Reach You 

You are getting calls, letters, and emails almost daily - or multiple times each day - and you are tired of dodging these attempts at communication. You dare not answer the phone for unknown numbers because it is probably a creditor and you know you cannot make a payment today. Filing for bankruptcy stops most collection efforts immediately. As soon as your creditors hear that you have filed, they must stop attempting to get you to make a payment.

Your Debt is Getting Bigger, Not Smaller

Even if you have been making regular payments, your debt can grow instead of shrinking due to high interest rates and other fees. For example, if you have been trying to pay off your credit card for several years and the balance you owe has not changed or has gone up, chances are that you will not be able to pay it off at all unless your financial situation drastically changes.

Your Monthly Payments Equal More Than Your Disposable Income

Do the math and try to find out whether you can realistically keep up with your payments. First, add up all the expenses you must pay each month that do not represent debt repayment. This may include your rent, food costs, and utility bills you are up to date on paying. Subtract that amount from your monthly income. Then, add up all the payments you are expected to make towards your debt, like your credit card bill or money you owe to the hospital. If that number is higher than the amount of income you have left after paying your basic living expenses, you likely cannot make every payment every month and may want to consider bankruptcy.

Contact a Houston, TX Bankruptcy Lawyer 

If you are considering filing for bankruptcy, The Fealy Law Firm, PC can help. Experienced Harris County, TX bankruptcy attorney Vicky Fealy will assess your situation and help you decide whether it is time to file for bankruptcy. Contact us at 713-526-5220 for a complimentary consultation.