How to Know if it is Time to File for Bankruptcy

If you decide filing for bankruptcy may ease your financial troubles, then it is important that you first consider all your options before making such a significant decision. Filing for bankruptcy is a very serious matter, and it may have far-reaching effects. Below are some common questions many people have when considering filing for bankruptcy:

How do you know if you are ready to file for bankruptcy?

There are three primary levels of urgency when you are considering filing for bankruptcy. The first level means that you have been out of work for a few weeks and are starting to pick and choose which bills you can and cannot pay. While this may be a very scary position to be in, you most likely do not have to file for bankruptcy just yet. You should first try and negotiate with the creditors and cut back on your expenses with the help of an experienced attorney. If you find yourself out of work for three or four months, owe taxes, have medical bills and are building up other debts as well, it is time for you to file for bankruptcy. If you are at the end of your unemployment benefits, cannot pay your debts and your wages are being garnished, you must declare bankruptcy immediately.

Which is the correct type of bankruptcy to file for?

There are six types of bankruptcy you can file for, and it may at first seem confusing which type of bankruptcy is the right fit for you. Here are the six types of bankruptcy:

  • Chapter 7: For liquidating assets
  • Chapter 9: For readjustment of municipality debts
  • Chapter 11: For reorganization and/or restructuring of debt
  • Chapter 12: For farmers and fishermen only
  • Chapter 13: This is the “wage earners plan.” Essentially, it helps wage earners develop a plan to pay off debt
  • Chapter 15: Related to foreign debt

If you wish to receive further clarification regarding which bankruptcy is right for you, speak with an attorney as soon as possible.

Contact our New Jersey law firm

It is extremely important to know if you are ready to file for bankruptcy or not. Many individuals think they will be able to financially recover on their own, only to find out that they made their situation even worse. Once you file, you may gain access to the relief you need. Sometimes a trustworthy attorney who understands the severity of your situation can make all the difference in the world. Do not hesitate to contact one of our dedicated lawyers who will tenaciously fight for your rights in your time of need.

Before taking any sort of legal action, it is important to discuss your legal matter with an experienced attorney. Contact The Radol Law Firm to discuss any divorce and family law matters you may be faced with.