Stereotypes are among the main reasons that people who are eligible for bankruptcy protection do not consider the option of filing for bankruptcy. They are worried that people in their communities, as well as lenders and prospective employers who see their credit reports, will assume that they lived beyond their means, asked the court to erase their debts, and then repeated the process. In fact, overspending is a fairly easy problem to correct; most people who file for bankruptcy do so because their financial problems are so severe that simply changing their spending habits will not fix them. Filing for bankruptcy is one of several ways to deal with your debt problems when you are in over your head and there is no easy solution. If you are considering filing for bankruptcy protection, contact a bankruptcy attorney to discuss your options.
Excessive Spending is Not the Root Cause of Your Financial Problems
If you are in debt because you have carelessly spent money on nonessential purchases without thinking about whether you could afford them, then as long as you have steady employment, it’s likely you will eventually be able to pay off your debts if you make a budget and follow it. Bankruptcy is available to people who have started to feel the pain of living beyond their means, just as it is available to everyone, but they are not the people who need it the most. The best candidates for bankruptcy protection are people who can no longer work because of a chronic illness (medical bills plus lack of employment income are a terrible combination) and those who, due to a divorce, have experienced a reduction in household income but no reduction in household expenses.
You Have to Keep Borrowing Money to Make Ends Meet
Whatever the reason for your debts, you can tell that things are getting bad when you have to keep borrowing more and more money just to keep up with your household bills and the minimum payments on your debts. If your credit card balance keeps getting higher, this is a red flag. It is also a red flag if you have done multiple credit card balance transfers in the past few years or taken out a second personal loan before paying off the first one.
You are Falling Behind on Mortgage or Rent Payments
A lot of people who file for bankruptcy protection spend a long time being in denial about their debts. It is easy enough to default on credit cards or medical bills and then just keep ignoring the bills and collection notices. If you are falling behind on your rent or mortgage payments, however, you have much more to lose. Filing for chapter 7 bankruptcy can help you free up funds to pay the past due amounts on your housing costs so that you can avoid eviction or foreclosure. It is not the only solution, of course; if you negotiate directly with your landlord or mortgage lender, they might agree to give you more time to pay.
Creditors are Threatening to Sue You
Unpleasant phone calls from creditors and collection agencies are one thing, but business-to-consumer lawsuits are another matter entirely. It is easy enough to ignore debt collection notices in the mail or in your email inbox, and you can reject phone calls from creditors or even tell them not to call you again. When a creditor serves you with papers informing you that you are being sued, it is perilous to ignore them. Hiring a bankruptcy lawyer now could save you the need to hire a lawyer for a lawsuit later.
Your Options for Increasing Your Income are Limited
The simplest solution to being in debt is to get more money to pay your debts. If you have a salaried job or even enough gigs to occupy you full-time, then short-term solutions such as debt consolidation loans might be all you need to get out of debt. Bankruptcy works best if the only solution is to reduce the amount you owe rather than increasing the funds available to pay the debts. If you have no income from employment, or if your employment income is unlikely to increase in the near future, filing for bankruptcy protection is a good choice.
Contact a Bankruptcy Lawyer Today
Jonathan Goldsmith Cohen has helped thousands of clients successfully improve their financial circumstances by filing for chapter 7 and chapter 13 bankruptcy in Monmouth County and throughout New Jersey. Contact our office to discuss your case today.
Stereotypes are among the main reasons that people who are eligible for bankruptcy protection do not consider the option of filing for bankruptcy. They are worried that people in their communities, as well as lenders and prospective employers who see their credit reports, will assume that they lived beyond their means, asked the court to erase their debts, and then repeated the process. In fact, overspending is a fairly easy problem to correct; most people who file for bankruptcy do so because their financial problems are so severe that simply changing their spending habits will not fix them. Filing for bankruptcy is one of several ways to deal with your debt problems when you are in over your head and there is no easy solution. If you are considering filing for bankruptcy protection, contact a bankruptcy attorney to discuss your options.
Excessive Spending is Not the Root Cause of Your Financial Problems
If you are in debt because you have carelessly spent money on nonessential purchases without thinking about whether you could afford them, then as long as you have steady employment, it’s likely you will eventually be able to pay off your debts if you make a budget and follow it. Bankruptcy is available to people who have started to feel the pain of living beyond their means, just as it is available to everyone, but they are not the people who need it the most. The best candidates for bankruptcy protection are people who can no longer work because of a chronic illness (medical bills plus lack of employment income are a terrible combination) and those who, due to a divorce, have experienced a reduction in household income but no reduction in household expenses.
You Have to Keep Borrowing Money to Make Ends Meet
Whatever the reason for your debts, you can tell that things are getting bad when you have to keep borrowing more and more money just to keep up with your household bills and the minimum payments on your debts. If your credit card balance keeps getting higher, this is a red flag. It is also a red flag if you have done multiple credit card balance transfers in the past few years or taken out a second personal loan before paying off the first one.
You are Falling Behind on Mortgage or Rent Payments
A lot of people who file for bankruptcy protection spend a long time being in denial about their debts. It is easy enough to default on credit cards or medical bills and then just keep ignoring the bills and collection notices. If you are falling behind on your rent or mortgage payments, however, you have much more to lose. Filing for chapter 7 bankruptcy can help you free up funds to pay the past due amounts on your housing costs so that you can avoid eviction or foreclosure. It is not the only solution, of course; if you negotiate directly with your landlord or mortgage lender, they might agree to give you more time to pay.
Creditors are Threatening to Sue You
Unpleasant phone calls from creditors and collection agencies are one thing, but business-to-consumer lawsuits are another matter entirely. It is easy enough to ignore debt collection notices in the mail or in your email inbox, and you can reject phone calls from creditors or even tell them not to call you again. When a creditor serves you with papers informing you that you are being sued, it is perilous to ignore them. Hiring a bankruptcy lawyer now could save you the need to hire a lawyer for a lawsuit later.
Your Options for Increasing Your Income are Limited
The simplest solution to being in debt is to get more money to pay your debts. If you have a salaried job or even enough gigs to occupy you full-time, then short-term solutions such as debt consolidation loans might be all you need to get out of debt. Bankruptcy works best if the only solution is to reduce the amount you owe rather than increasing the funds available to pay the debts. If you have no income from employment, or if your employment income is unlikely to increase in the near future, filing for bankruptcy protection is a good choice.
Contact a Bankruptcy Lawyer Today
Jonathan Goldsmith Cohen has helped thousands of clients successfully improve their financial circumstances by filing for chapter 7 and chapter 13 bankruptcy in Monmouth County and throughout New Jersey. Contact our office to discuss your case today.
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