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When is the right time to seek bankruptcy protection?

On Behalf of | Aug 17, 2020 | Bankruptcy

Most people carry around some form of debt. From mortgages to car payments and credit card balances, it’s likely you owe another party something. Some people are able to keep their debt in check. However, a financial emergency such as an unexpected medical procedure or the loss of a job can result in an otherwise stable situation turning chaotic quickly.

The good news is bankruptcy relief is likely available if you’re simply unable to catch up on your bills. However, most people are reluctant to seek bankruptcy protection and it can be tough to know when it’s the best time to file for debt relief.

Are you experiencing these types of situations?

A single missed payment should probably not cause you to run to bankruptcy court. However, you probably don’t want to wait until you’re up to your neck in debt either. If you’re experiencing any of the following, you should start thinking seriously about bankruptcy protection.

  • Collections agencies are contacting you: A letter or two informing you of a past due payment is manageable. However, once your phone starts ringing and bill collectors are demanding money, things have become much more serious. Collection activities will only get more extreme from this point on and may lead to wage garnishment or legal action.
  • You’re being threatened with foreclosure: When you start missing mortgage payments, your lender is likely to begin foreclosure proceedings. A bankruptcy filing will temporarily halt these proceedings. This can help give you the time you need to catch up on payments and may even help you save your home.
  • You’re taking on debt to address other debt: It’s never wise to borrow money to help pay off other debts. Using one credit card to pay down the balance on another or borrowing money from a friend is a Band-Aid solution at best.

There’s nothing wrong with getting lasting debt relief through bankruptcy. The sooner you get help, the sooner you can work on getting to a more stable financial place. A skilled professional can help you determine the best path forward for your situation.