If you have been struggling financially, how do you know when it is time to consider filing for bankruptcy? The first thing to do is to take a step back and assess your financial situation. The first thing we recommend is to conduct a review of your household budget. Carefully compare your true typical monthly net income against your typical monthly expenses. Be reasonable with your budget but remember to include all of your expenses, including but not limited to: all food and household supply expenses, school-related expenses, and even auto maintenance and other travel-related expenses, etc. In completing your budget, you should not be using credit cards to cover any shortfalls. If you have a negative budget each month, it may be time to consider filing for bankruptcy.

In addition to completing a budget, we also recommend you ask yourself the following important questions:

• Are you only making the minimum payments on some or all of your credit cards?
• Have you been late in paying your bills?
• Have you had a financial hardship that caused you to become late on your bills?
• Are debt collectors calling you?
• Do you have any pending lawsuits or outstanding judgments?
• Are you behind on your mortgage or facing foreclosure?
• Do you have a wage garnishment or a frozen bank account?
• Have you borrowed money from a retirement account to pay for your current expenses or outstanding debts?
• Have you depleted or come close to depleting the money in your bank account to pay your credit card bills or your mortgage payment?

If you answered yes to any or all of the questions above, you may want to consider consulting with an experienced bankruptcy attorney. The federal bankruptcy laws were enacted to provide debtors with a financial “fresh start”. If you are struggling to pay your bills or just need time to catch up on past obligations, it may be time to consider filing for bankruptcy. Chapter 13 bankruptcy specifically can help you stop a foreclosure proceeding and get a payment plan for any monthly arrears.

A qualified bankruptcy attorney will help you evaluate whether bankruptcy is the right option for you. A bankruptcy discharge will eliminate most debts including credit cards, car loan deficiencies, personal loans and medical debts. When you file a bankruptcy petition, you receive the protection of the automatic stay which prohibits creditors from attempting to collect debts from you. This includes bringing or prosecuting lawsuits, enforcing judgments, garnishing paychecks and freezing or levying bank accounts. After your case is closed, you will have the opportunity to rebuild your credit. It is not uncommon to see your credit score increase over 100 points approximately one year after a bankruptcy discharged.

If you have reviewed your financial situation and have come to the conclusion that you owe more that you can afford or need to restructure your debts, please feel free to contact our office to arrange for a free consultation. The Law Offices of David I. Pankin, P.C. can be contacted 24 hours a day, 7 days a week at 888-529-9600 or you can contact us by using our easy online contact form.