For debt-ridden consumers, taking the first steps toward filing Chapter 7 or Chapter 13 bankruptcy is often the best way to get a fresh financial start since personal bankruptcy serves to "...reduce or eliminate your debts, save your home and keep those bill collectors at bay..." according to Investopedia .
While doing your best to settle debts according to the original terms is always best if possible, there comes a clear point at which such a course of action is no longer feasible, and avoiding bankruptcy past that point is likely to wreak havoc on your financial future. As the Federal Reserve Bank shares, "...individuals who go bankrupt experience a sharp boost in their credit score after bankruptcy, whereas the recovery in credit score is much lower for individuals who do not go bankrupt."
So how can you avoid an uncertain future by filing for bankruptcy in time? Here are 3 signs that it is time to reach out to a bankruptcy lawyer.
1. You Tried to Negotiate with Creditors: If your creditors have refused to spread out of reduce your payment schedule your unpaid debt will only continue to increase as interest piles up.
2. You Called Your Mortgage Servicer: If you are unable to make timely mortgage payments and a loan servicer has determined that you are not eligible for the Home Affordable Modification Program (HAMP) or the Home Affordable Foreclosure Alternatives (HAFA), this debt is not going anywhere, and unpaid principal will simply beget more interest. The end result if you take no action? Foreclosure.
3. You Contacted the IRS: The IRS is a feared entity by those people indebted to it for good reason. They can garnish your paycheck, contact you at your place of business, and even prosecute you in criminal court in some instances. If you have been unable to arrange a payment plan or settlement that is financially comfortable for you, it is time to redirect your course.
To talk about how to get started making your financial future more secure, please contact us. Thank you.