Choosing To Change Your Finances

6 Signs Chapter 7 Bankruptcy Is The Right Choice For You

by Luis Hawkins

If you are struggling financially and your debts are really adding up, you may want to consider filing for Chapter 7 bankruptcy. Before you contact an attorney to start the process, go through this checklist to see if Chapter 7 bankruptcy makes sense for you right now.

Sign #1: Creditors Are After You

When you don't pay your bills or your loans and become more than three months behind, your bills will more than likely get sent to a collection agency.

If you find you don't answer the phone because you are afraid of who is going to be calling and asking for money, that is a sign you are so deep in debt that bankruptcy may be a good option for you.

Sign #2: You Avoid Opening The Mail

If you avoid getting your mail out of the mailbox or opening it up when you get the mail inside of your home, because you are afraid of the collection notices that you may face, you may need to consider filing for bankruptcy. You may need help if just getting your mail on a regular basis stresses you out.

Sign #3: You Are Taking Out Loans to Pay Your Utility Bills

You should be able to pay your utility bills using your regular paycheck. You should not have to take out payday loans or personal loans in order to just pay your basic utility bills. If you are taking out loans just get to by, it may be time to get financial help.

Sign #4: You Couldn't Pay Off Your Bills Anytime Soon

If you couldn't pay off your bills based on your current income over the next five years, even if you had the perfect budget, you are in the exact financial situation that Chapter 7 bankruptcy assists people with.

Sign #5: Your Debts Are Greater Than Half Your Annual Income

If your debts, excluding your student loans, taxes, and child support, exceed half of your annual income, then you are deep enough in debt to qualify for bankruptcy protection. When your debt is so large you couldn't pay it off if you put over half your income towards your debt, you are in a troubling situation.

Sign #6: You Have the Right Type of Debt

Finally, you need to have the right type of debt. Back child support payments, student loans, and recent taxes are three types of debts that typically are not discharged in Chapter 7 bankruptcy. However, if your debt includes payday loans, personal loans, credit card debt, or even medical bills, you have the type of debt that could be dealt with in bankruptcy.

If two or more of the signs above are something you can relate to, you may want to talk to an attorney and see if your situation would qualify for Chapter 7 bankruptcy. Chapter 7 bankruptcy is a chance for you to get your debt and financial life under control again.