Common Signs That You May Need to Discuss Filing Bankruptcy

TRI Writer • March 26, 2020

It’s not unusual for a typical American consumer to wonder if they’re in over their head when credit card bills or medical bills start to pile up. If you’re wondering how you’re going to get out from under debt that seems to be growing faster than you can identify where it’s coming from, you’ve probably already considered filing bankruptcy for a discharge of debt. The U.S. Court System Administration Office recorded 936,795 bankruptcy filings in 2014. Most of the bankruptcy filings were people filing for Chapter 7 discharge.

Filing for Chapter 7 Discharge Means Wiping the Slate Clean:

The Chapter 7 bankruptcy ends with a discharge of all debt not exempt under bankruptcy law. It wipes the slate clean and provides the petitioner with a new start. It is also recorded on the bankruptcy petitioner’s credit report for ten years. While bankruptcy is designed as a last resort, in some cases, filing is the best response.

Common Signs that You May Need to Consider Bankruptcy:

You’re Missing Payments: If you consistently miss minimum payments or regularly scheduled payments (like utilities or the water bill, etc.), you may need to take a closer look at your finances and reevaluate how you’re handling them. If there is not enough money available to cover your costs of living and debt repayment, you may need to talk to an experienced bankruptcy attorney.

You Don’t Qualify for a Debt Management Plan: If you attempted to work with your creditors or an outside company to qualify for a hardship plan or debt management plan, and you didn’t qualify, you may need to discuss your options with an experienced bankruptcy attorney.

You’ve Already Taken Out Additional Debt to “Consolidate” – and it Didn’t Work: If you attempted to solve the problem by taking out a home equity loan, personal loan, or other loan to pay off the problem debt, and you ended up maxing out your cards again, you may need to discuss your situation with a local bankruptcy attorney.

You’ve Stopped Answering Your Phone & Don’t Open Your Mail: If creditors are contacting you for payment regularly and you have stopped responding, you should discuss the situation with a bankruptcy attorney. Immediately after filing, the automatic stay goes into effect prohibiting all collection action.

You’ve Spent Your Savings: If you tapped into your savings or your retirement account to make ends meet or to help maintain your debt, you might benefit from looking into the protections offered by bankruptcy.

You’re Using Your Credit Cards More: If you find yourself depending on your credit cards more and more to make ends meet each month, you should consider discussing your options with a bankruptcy attorney.

You’re Using Loans to Pay Bills: If you are using credit cards or loans to pay your bills, you should talk to your bankruptcy attorney about how to obtain a discharge of debt.

You’re Behind on Your Mortgage Payment or Rent: If you are behind on your housing payment, or you fear foreclosure or eviction, please get in touch with an experienced bankruptcy attorney to discuss how bankruptcy could protect you.

Your Credit Cards Are Maxed Out: If you are juggling maxed out credit cards and limited funds to pay more than the minimum payment, you should discuss the situation with a bankruptcy attorney.

Filing bankruptcy is a big decision and not one that you should make lightly. In a lot of situations, hard work, budgeting, and patience can go a long way toward getting out of debt. Still, in more extreme cases, robust legal protections may be necessary. If your finances have spiraled out of control, get in touch with an experienced bankruptcy attorney to weigh the pros and cons of filing bankruptcy so you can make sure it’s your best choice.

If you need to discuss filing bankruptcy or if you have questions about how bankruptcy can help you, please don’t hesitate to get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one in Chattanooga with two. You are in good hands with Kenneth C. Rannick P.C.

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