The decision to file for personal bankruptcy protection is up to the individual. Ultimately, you must decide whether bankruptcy is what you need to take care of your debt and hit the reset button on your financial problems.
This is not a decision to take lightly, but you do not have to act without any clue whether bankruptcy is your best option. Here are two questions to ask yourself first.
Can you pay back your debts?
Having debt is common. Most Louisiana households use credit cards, and most homeowners must make mortgage payments. And just because a family is carrying a credit card balance or is paying off an auto loan, it does not necessarily mean they are drowning in debt.
Ask yourself this: are your debts too big for you to reasonably expect to repay? Or is the principal staying as large or even growing? If you are not making progress on paying down your debt, it may be time for a new strategy.
Are you getting harassed by creditors?
Another sign that Chapter 7 or Chapter 13 bankruptcy might be necessary is that creditors or debt collectors have started collection actions. Intimidating letters and harassing phone calls can soon lead to lawsuits, foreclosures and wage garnishments. By the time these activities against you begin, bankruptcy could be your best way to stop them. Filing for bankruptcy puts an automatic stay in place that freezes collection actions and gives you time to use the bankruptcy process to your best advantage.
If you answered “no” to the first question and “yes” to the second, it’s probably time to talk to a bankruptcy attorney. That way, you can know your options, which form of bankruptcy you qualify for and what you should do next.