The burden to repay debts can be overwhelming and gives a lot of stress, especially when you have the ability to repay your debts outside bankruptcy. Filing bankruptcy has some perks that will help you to suspend any debt collection proceedings by the lender. Also, in some cases, all of your debt can be eliminated after bankruptcy, but how much debt do you need to have to file for bankruptcy?
As per bankruptcy laws, debtors don’t need any minimum debt amount to file for bankruptcy, but it is your decision when is the right time to file bankruptcy. The amount of debt is an important factor to consider before filing bankruptcy. Here are some factors that will help you to decide when to file bankruptcy.
Factors That Will Help You Decide When To File Bankruptcy
1. Unsecured debts
If you own unsecured debts and since there is no minimum debt amount, you can file for bankruptcy anytime if you are incapable of repaying your debts outside bankruptcy. Since the amount of debt doesn’t matter, you can eliminate your debts by bankruptcy. Though filing for bankruptcy will cost you some extra charges. But if it’s less than your debt amount, then filing for bankruptcy is a better option. Examples of unsecured debts include credit card debts, medical bills, etc.
2. Secured debts
Secured debts include loans that are secured against your property and assets. If you are due to pay your secured debts, then consider filing for bankruptcy before your property gets seized by the lenders. Filing a bankruptcy against secured debts will let you keep the ownership of your property, and you still may get a couple of years to repay the debts with reduced interest rates.
Before filing a case, you can reach out to debt consolidation companies that aid you in negotiating with the lenders and extend your time to repay the debts in easy installments. You can even get a reduction in some percentage of the total debt amount and also get a reduction in interest rates. Visit Credit Associates review and get complete details on how to get out of debt with the help of the best debt consolidation company.
3. Facing employment crises
Employment crises are amongst the important concerns forcing people to stay at home due to lack of employment. If you are unemployed and have a debt to repay, and having difficulty making your payments, then it is the right time to file for bankruptcy. You get a chance to retain your property, and depending on your financial situation, you can either choose to continue paying your debt or pay them later.
By considering these factors, you can decide the perfect time to file for bankruptcy. Filing for bankruptcy can help you get rid of some burden. You can repay the lenders later by earning some extra money, cutting out unnecessary costs, and having potential savings to accumulate the money for the debt.