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Ask yourself these 3 questions before filing for bankruptcy

On Behalf of | Jun 2, 2022 | Chapter 7 Bankruptcy

For many Florida residents struggling to stay atop of their finances, filing for bankruptcy brings welcome relief. However, it may not be appropriate for everyone in all situations. If you count yourself among the many looking to make a financial fresh start through bankruptcy, there are certain things you may want to ask yourself before moving forward.

Per NerdWallet, it may serve you well to ask yourself the following three questions before making the decision to file bankruptcy.

1. Is it worthwhile?

How much bankruptcy is going to help you depends to some degree on the types of debts you are managing. Certain debts, such as student loans, among others, are not dischargeable through the bankruptcy process. So, you need to find out of the debts you have are dischargeable via this method before moving forward.

2. Are you eligible?

Different forms of bankruptcy have different eligibility requirements. If you want to file for Chapter 7, you have to pass a means test and prove that you have limited means. Qualifying for Chapter 13 depends on how much you have in terms of secured and unsecured debts.

3. What format makes sense?

If you do decide to move forward with a consumer bankruptcy filing, you need to figure out whether a Chapter 7 or a Chapter 13 bankruptcy makes more sense – and if you qualify for each type. The processes involved in discharging debts through Chapter 7 and Chapter 13 bankruptcies are quite different. It also takes much longer to do so through a Chapter 13 filing than a Chapter 7 one.

While bankruptcy may help you iron out your financial issues and get your head back above water, it is not a decision to make without first devoting careful consideration to it.

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