If you were extra generous over the holidays and had to skip a credit card payment, you may feel terrible. On the other hand, you may be going through a slowdown at work that has caused your paycheck to be temporarily smaller until the warm weather returns. While these and other scenarios may set you behind on your bills and debts, they may not be adequate reasons to file for bankruptcy.
Bankruptcy is a form of debt relief that can truly benefit someone who is struggling with insurmountable debt or is facing other ramifications of unpaid debt. However, it is not appropriate in every case. In fact, filing for bankruptcy unnecessarily may be a waste of time and money.
How serious is your debt problem?
When you begin to fall behind on your debt payments or realize your paycheck no longer covers what you owe, you may take certain steps to resolve the problem, such as reorganizing your budget, selling some valuables or taking a second job. If this corrects the course of your finances, you will likely not need bankruptcy. However, it is possible that your situation is more serious. A job loss, medical emergency or another financial setback may mean you are in danger of losing your home or facing lawsuits from creditors.
Some factors that indicate bankruptcy may be a practical step include:
- You are already working more than one job and are still unable to keep up with your debt.
- You are using credit cards for everyday expenses like groceries and gas.
- Creditors are warning you that they are going to garnish your wages.
- You use your credit card to pay your bills, including other credit card debt.
- You are deducting money from your retirement savings to pay your debts.
- You are feeling the stress of your financial burdens spilling into other areas, such as your work and relationships.
- You do not see an end to your situation, such as an upcoming raise or a better job opportunity on the horizon.
- You have tried other avenues to manage your debt without relief.
Before taking any steps toward bankruptcy, it is a good idea to get solid legal advice. A Virginia attorney experienced in bankruptcy law may be able to provide you with other options that are more appropriate for your circumstances. However, if your situation does indicate bankruptcy will benefit you, an attorney can guide you through the process so that your experience is as successful as possible.