When It May Be Time To Consider Bankruptcy

When It May Be Time To Consider Bankruptcy

Determining whether bankruptcy is the best option typically requires consulting with a knowledgeable bankruptcy attorney. There is a lot to consider and bankruptcy may not the optimal solution for every Utahn. Of course, anyone may conduct a self-research and self-help program to learn about bankruptcy although relying on any information uncovered on the internet requires the time to cross- and double-check the sources coming from this vast resource. The attorneys at the Morrison Law Group have helped over 8,000 Utah residents gain a fresh start by filing bankruptcy.

The most obvious and typical sign that a solution may be necessary is not having enough money to pay monthly expenses in their entirety. First, these bills may eventually get paid, although past their due date, then they may stop getting paid from month to month. At this time, investigating and considering options and solutions may be a wise course of action if not absolutely necessary.

Delinquent or missed payments will cause late fees and other charges, which will start to accumulate and increase the debt’s total balance to which a higher interest rate may be applied. Eventually, problems paying monthly bills may cause a lower credit score, thus negatively affecting the ability to obtain credit to purchase necessary items.

Other warning signs include using credit cards to buy groceries or pay other bills, such as utility bills. Taking out title loans or payday loans is another sign that a financial situation is slowly moving out of control. It may be wise at this time to consider debt settlement, debt consolidation, or a debt management plan along with bankruptcy.

For any person to determine whether he or she is a good candidate for bankruptcy, first requires reviewing one’s entire list of debts. It is best to start with unsecured debt, such as credit cards, including their balances, interest rates, and monthly minimum payment amounts. Next, he or she must determine whether they have the financial resources to make the minimum payment every month by the due date.

Next, consider the amount of monthly secured debt payments such as mortgages and motor vehicle loans and whether these can be made on time each month without fail. Add these amounts to the total amount of unsecured debt that must be paid every month.

Then, monthly living expenses must be calculated and added to this amount to establish the total amount of monthly expenses that must be paid every month. While income represents the amount of money and other assets that a person receives, this monthly total expense amount represents the money a person pays out. If there is too little income to pay these monthly expenses and this situation is substantially unlikely to change soon, then bankruptcy may be a viable option.

Individuals considering bankruptcy as a debt relief solution often assume that bankruptcy will not provide the necessary help in a timely enough fashion to be truly effective and worthwhile. This could not be farther from the truth and is a myth of bankruptcy. It is important to consult with an experienced Utah bankruptcy attorney, such as one of the many qualified attorneys at the Morrison Law Group who can explain the process and timeline of both Chapter 7 and Chapter 13 bankruptcy cases. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.