Are You Really Ready For Bankruptcy? How To Tell

Bankruptcy should only ever be used as a last resort way to get out of debt. It isn't a problem solver for you every time you get into a pickle with your finances. If you are trying to file for bankruptcy every 7 years, this is a problem. You are using bankruptcy as a way of life, rather than a last-ditch effort. If you are struggling, it may not be bankruptcy that you need, you may instead need financial counseling. If you aren't sure if you need bankruptcy, or if you just need counseling, read on for ways to tell the difference.

1. You're Having A Hard Time Financially

If you've fallen on hard times and are struggling to get out of debt, you may need bankruptcy. If you don't see a way out of your situation, and there is no end to your situation in sight, it may be time. However, if you have fallen on hard times and you are just in a bad way for a little while, such as your money is tight for just a few weeks, you may be able to borrow for a little while until you get back onto your feet. If this is the case for you, you may not need bankruptcy at all.

2. You Have Exhausted All Means

When you have exhausted all means, it means that you have already drained your savings accounts, you have taken out of your 401K, or you have traded in assets in order to pay your debts. If you still have these things, you have to use what you have in order to pay your debts back. If you don't, you could be ordered to do so when you go to file for bankruptcy. Just because you don't want to have to drain these accounts, or you don't want to have to sell your belongings, means nothing. You can't have your cake and eat it too. You are going to have to exhaust your excess in order to pay back your debts.

If you aren't sure if you are ready to file for bankruptcy, go to a bankruptcy attorney to learn more about Chapter 7 bankruptcy law. You can discuss your finances with the attorney and discuss your assets as well. If you are ready to file for bankruptcy, your attorney can help you go through the process to help get you out of debt.