Finance

When Should You File for Bankruptcy?

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Filing for bankruptcy everett wa is the last thing consumers will resort to if they find themselves in a dire financial situation. The word “bankruptcy” sounds so ominous and scary. It often comes with a stigma and negative connotation. It’s one of the most dreaded financial outcomes people can ever face. If you find yourself in a financial rut, you might be wondering whether or not you should file for bankruptcy. There are a few things you should consider before making that final decision as bankruptcies can stay on your credit for up to seven years.

Reasons You Might Consider Filing for Bankruptcy

Job loss and medical debt are two of the biggest reasons for considering bankruptcy. Oftentimes, the two team up and cause a family to kiss their financial security goodbye. Maybe your health problems are preventing you from performing at your job or perhaps you have medical bills up to your ears. If these things happen at once, this is often a toxic combination because you lose your source of income at the same time expenses go up. However, these aren’t the only reasons why people file for bankruptcy. Other, less imposing situations that could cause you to consider bankruptcy include:

  • Getting a divorce
  • Creditors suing you for payment of debts
  • Your home is underwater and in danger of foreclosure
  • You use one credit card to pay off another

Things You Should Consider Before Filing for Bankruptcy

When it comes to relieving your debt, there are far easier solutions than bankruptcy. For example, you might try debt consolidation, which involves reducing your monthly payments by lowering the interest rate. You can merge multiple bills into a single debt and pay off your debt with a loan or management program.

Bankruptcy should always be the last resort. Don’t be quick to file if you have other options.

 

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