If you're facing financial trouble, it's important to consider all your options for seeking relief. Bankruptcy may not be the first thing you think about, but it could be the best way to improve your finances and provide a fresh start in the future.
Here are some key questions to answer before filing for bankruptcy:
- Which type of bankruptcy is best? Chapter 7 and Chapter 13 are your two options as an individual consumer. List out the pros and cons of both types to decide which one suits you best.
- Do you qualify for bankruptcy? Not everyone can file for bankruptcy. For example, with Chapter 7 bankruptcy, you need to pass a means test to prove that you're unable to pay your debts.
- Are you okay with the long-term impact? Even though there are many benefits of bankruptcy, it will remain on your credit report for as long as 10 years.
- Is it the best solution right now? Bankruptcy is one of the best ways to eliminate debt and reorganize your finances, but it's not the only option. Don't go down this path until you're sure that it'll land you in a better place.
When you answer these questions, among others, you'll find it easier to decide for or against a bankruptcy filing.
Once you decide what to do next, learn more about the process and the steps to take. As long as you understand the benefits, drawbacks and impact on your finances, you can move forward with confidence. In the end, the only thing that matters is that you've improved your finances.