Should I file for Bankruptcy?

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If you have any questions on whether you should file for bankruptcy – Contact Us at 303-625-6909    for a Free 30 Minute Consultation

It happens to a lot of people: they rack up debt and they can’t pay it off. Sometimes they think that if given enough time they will be able to get themselves back on their feet. But this raises the question: when should I make the decision to file for bankruptcy? There are no certain rules, but here are a few things to consider.

Bankruptcy can give you a give you a new beginning, but you should consider it a measure of last resort. Your credit will be impaired for 7 to 10 years after filing (though there are ways to establish credit during that period). You may have trouble getting an apartment, getting a car loan, and more and more employers are screening applicants based on their credit records. And finally there is the human toll. Some people feel like failures because of a bankruptcy, even though they should not.

Before you file for bankruptcy, you need to closely examine the state of your finances to see if there is anything you can do to rectify your situation. You could first try contacting your creditors and explaining your concerns to them. However, it is common knowledge that creditors will not negotiate fairly with the people who owe them money. As a rule, you will need someone to negotiate for you, ideally an attorney trained in finances and bankruptcy law. A Denver bankruptcy attorney can bring knowledge, experience, and authority to the negotiation table which the average person cannot.

Every person’s financial situation is different and there are no rules for determining whether you should file for bankruptcy, but your debt-to-income ratio is an excellent barometer. A rule of thumb is that no more than 20% of take-home income should go to one’s debt load. This is the indicator that mortgage lenders look at when deciding to make a loan. Can you only afford to pay the minimum amount on your debts? If so, it indicates that you are either in trouble or will be soon. If it is credit card debt, you are looking at decades in some cases to pay the full loan off. Finally, are your money problems long term, or do they arise from a temporary situation like unemployment. If the latter, you may not need to file for bankruptcy in the short term. But not being able to meet bills for, say, over one year may mean that you will never catch up, and filing will be the best thing for you.

As always, you should contact an attorney to help you make the right decision.

bankruptcy squad 1468 s pearl st, denver co 80210 303-625-6960

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