Choosing To Change Your Finances

5 Questions to Ask Before Filing for Chapter 7 Bankruptcy

by Luis Hawkins

Filing for bankruptcy is not something you should rush into, as it has consequences. To determine if you should file, you should first talk to a bankruptcy lawyer. Next, you might want to ask yourself the following five questions.

1. Are You Eligible?

The first question to ask your lawyer is if you are eligible to file. This branch of bankruptcy is not open to everyone who needs help with their debts. It is only available to people who meet specific income requirements. If you earn too much money from your job or other sources, you will not be eligible to file.

2. Is There Another Way Out of Debt?

Two, you should determine if there is another way out of debt. You can find a variety of debt relief programs to use for assistance with debt. Is bankruptcy the right option? Well, you should consider some of the other options before deciding. If there is another way out of debt, you might want to try that first.

3. How Will It Help?

Next, you should talk to your lawyer about the relief it offers. Chapter 7 will not offer relief for all the debts you have unless they are all qualifying debts. Most people do not have all qualifying debts, though. They may have some other debts mixed in, too. You must have a lawyer review your debts to find out precisely how Chapter 7 would help.

4. Will You Lose Any Assets?

The next question to ask is if you will lose any assets. The risk you take with Chapter 7 is the potential to lose some things you own. For example, you could lose your house, car, or cash in the bank. Your lawyer may want to evaluate all the assets you currently have to see how filing for Chapter 7 would affect them.

5. Is It Worth It?

The final question to ask is if it is worth it. Is filing for Chapter 7 bankruptcy worth the benefits and consequences? Answering this question is not always easy, but your lawyer can help you find the answer. The best way to know if it is worth it is by making a list of pros and cons and comparing them.

Talking to a bankruptcy lawyer about these five questions can help you find the answers you need. To discuss your situation, contact a bankruptcy law firm in your town.