Is Bankruptcy the Right Step? Here Are 5 Signs
Are you drowning in debt and wondering how you’ll ever get free? One option available to you is to file for bankruptcy. While this is a great tool that can truly help you get free of debts, it is definitely a very significant step with many big consequences to consider. How do you know if bankruptcy is right for you? Here are five signs that you should consider this tool for getting out of debt in New York City:
It Would Take You Years to Pay Off Your Debt
If it would take you more than five years to pay off your debt at a rate you could afford, you’ve signed yourself up for a lot of problems for the next portion of your life. Unless you get a pay raise, or find a way to drastically cut your expenses, you’ll be unable to get any new credit, to cover emergencies, or to enjoy any hobbies or fun activities with your extra income. In other words, your quality of life will be drastically diminished over a long period of time.
There’s no reason to live this way. You can pay off your debts sooner. Bankruptcy filings generally set up a payment schedule for you that lasts between three to five years, and the payments are designed to make it easier for you to remain living comfortably.
You Owe the IRS Money
Unfortunately, there’s no way to get out of paying back taxes. The IRS is exempt from settling with bankruptcy filings, so you won’t be able to have this debt wiped away or lowered. However, if you haven’t been able to pay the IRS due to all your other debts, getting the rest of your debts settled and free up your ability to pay is a very good idea. Not paying the IRS can lead to major legal troubles. It is far more affordable and less of a hassle to have the rest of your debts settled, and then begin paying your back taxes in earnest.
Creditors Are Harassing You
If you’ve ever had creditors calling you, sending letters, or even contacting family members non-stop, you know that this level of harassment can have a severe impact on your life. If you dread the mail, the phone, or even knocks on your door, then you are definitely being harassed. Unfortunately, what creditors can and can’t do legally is a bit of a gray area, and many times they can get away with threatening behavior.
However, when you file for bankruptcy, courts send your creditors a cease and desist letter during the proceedings. Until you get your bankruptcy ruling, and after, if the bankruptcy is awarded, you won’t be getting any more phone calls, letters, or other harassment.
You Are About to Lose Your Home
If are in arrears on your mortgage and are about to lose your home, you are likely panicking. This can happen if you get behind on your mortgage, and not every type of bankruptcy will require that you sell your house to pay back the mortgage. In fact, a Chapter 13 bankruptcy will help you catch up on your mortgage payments over a five-year period.
You Are Only Making Minimum Payments
Finally, if you are only making minimum payments on your debts, then bankruptcy could be a great tool for you. At minimum payments, most debts will take decades to pay off. You can get these debts paid off in just a few years with a bankruptcy filing. To learn more or to schedule a free consultation, call our office at 212-244-2882.