No one really wants to file for bankruptcy, but for many people it really is the best financial decision that they can make. In fact, law firms such as Abakhan & Associates Inc. see clients all the time who are still trying to make decision about whether or not to file. While some cases are complicated, there are many times when we know that filing for bankruptcy is the best option. If any of the following apply to you, it’s probably your best financial decision as well.
1. You cannot pay your minimum bills with your current income.
One of the first things that anyone who is considering bankruptcy should do is make a list of their minimum bills. This includes the minimum amount owed each month on credit cards and other debts, as well as necessary utilities. Do not include extra money used to pay down debt or expenses such as cable television. Next, figure out how much you bring home each month after taxes and other fees. If you don’t make enough to cover the minimum payments on your bills, you need the court’s help to come up with a new plan. No one wants to file for bankruptcy in BC, but this is a sure sign your options are dwindling.
2. You’re scared to answer the phone.
Dealing with just one collection agency is stressful, but if you’re dealing with multiple phone calls a day from a lot of different collection agencies, something has to change. Filing for bankruptcy can erase the debts you owe, making it impossible for them to legally collect anything from you.
3. You don’t know how you’re going to pay off your debts.
If you are just barely making your minimum monthly payments but you never see the balance of your loans go down, you’re just treading water. This is often true for people who are making payments on interest only or negative amortization loans where the loan balance can actually go up. Just paying interest every month means that you’re not making any progress towards getting rid of the actual debt, so you’ll never be able to move past it.
4. You don’t know how you’ll ever start saving.
If you can just barely make your minimum payments and you never seem to have anything left in savings at the end of the month, then you’ll never be able to save enough to retire or even have an emergency fund. That means if you want to get ahead, you need to file for bankruptcy.