Although the very thought of declaring bankruptcy is enough to cause some people to have panic attacks, choosing to file for bankruptcy is not always a negative thing. In fact, when people ask can I declare bankruptcy, they do not know that the legal process may be the saving grace they need when they are facing financial distress.
Unfortunately, there are some downsides to filing for bankruptcy. Some of these downsides include having problems obtaining lending and financing as well as a low credit score. It can also be a time consuming legal process.
There are several circumstances where you may wonder can I declare bankruptcy.
Higher Interest Rates
It may be difficult to pay off your debts when you have a lower interest rate, but if you missed a few payments your interest rate may increase. These rates can go as high as 30% after you have made several late payments.
This ultimately means that more of your payment is going towards the payment every month, and less of the money is going towards the principal. The time it will take to increase the amount of time that it takes for you to pay off these increased interest rates. If you are not able to negotiate a lower rate with the creditor, you may want to consider declaring bankruptcy.
Too Much Credit Card Debt
Another reason why a person may want to file bankruptcy is if they do not have enough money available to them to pay their daily expenses. When you have to pay all of your expenses such as food, gas and bills on a credit card, you may be under more financial distress than you realize.
If you are paying one credit card debt with another credit card, you may also want to schedule a consultation with a bankruptcy lawyer. You are accumulating debt while also increasing the interest rates on all of your credit cards.
Typically during a recession, the number of bankruptcy cases greatly increase. A dwindling economy makes it difficult for many people to pay off any loans or debts they may have. In fact, this is one of the most common reasons for people to file for bankruptcy. As bills pile up and are left unpaid, filing for bankruptcy may the only way out of your situation.
Meeting with a bankruptcy lawyer will be the best way to get the answer to your question, “can I file for bankruptcy.” A reputable lawyer will inform you of your options so you can make the best decision for your situation.
Contact us today to schedule a consultation and to learn how we can help you find the best debt relief program for your financial needs.