When to Consider Bankruptcy

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How to know it’s Time to Consider Bankruptcy?

Misfortune can happen to anyone, at any time. It is important to keep a steady head and look for the best possible solution to your financial troubles. Unfortunate circumstances can cause even the most responsible person to go through a bad financial period. An unexpected long illness, job loss, or expensive divorce can derail even the best people financially. In case you too are going through such a phase of financial struggle and are wondering whether it is time to file for bankruptcy, Sacramento based law firm Recovery Law Group provides you four signs to identify the problem and consult a bankruptcy lawyer.

Clearing Your Debts Using Your Retirement Funds

Your retirement funds are supposed to be helping you in your old age. If you have to dip your hands in this corpus to pay off your debts, you are essentially depriving yourself of a comfortable old age. In case you are considering or have gone ahead with early withdrawal from your retirement funds, things are more serious than you thought. Paying off your loan by using your retirement funds will hurt you in the long run.

Your Balances Refuse to Go Down

Despite making continuous payments with respect to your debts, the amount due is not getting reduced. If the amount you are repaying is merely covering the interest portion of the debt without making any change on the principal amount, you need to consider bankruptcy. If you are unable to fully pay off your debt within 3 years, it would be best if you consult a professional for legal advice regarding your debts.

Family Will End up Suffering if You Don’t File

Managing your debts and caring for dependents of your family can be not only emotionally and physically but also financially draining. If you are finding it difficult to manage both worlds, it is recommended to take care of your debts by filing for bankruptcy. Not only it helps you get rid of your loans, but it also allows you to get a fresh financial start so that you can effectively take better care of your family.

Your Mortgage is Under Water

If you are way over on your debts, your home, and other property might go under water if adequate steps aren’t taken soon. Bankruptcy can help you take care of the above-mentioned problems as:
• It can help wipe out any debt due after foreclosure.
• It can remove a home equity loan or second mortgage.
• It can help remove financial stress and assist you in making on-time payments or obtain loan adjustment so that you can retain your home.
• It can help reduce your debts to make money available to make the mortgage payment.
• Large tax bills due to the cancellation of debt income can be avoided.

Every individual has had their shares of financial issues, the circumstances of which may differ from one individual to another. Indicators of financial problems and debts might vary, but it is important to understand the subtle signs and seek help from professionals on time. consulting a bankruptcy lawyer if you face any of the above-mentioned signs is important before things spiral out of hand and you encounter trouble making payments or your income starts getting affected.