Think about the following questions. If the answer is yes to one or more you might be in need of filing for bankruptcy relief.

Are you receiving collections calls every day?
Have you lost your job and have no employment income or savings left?
Are you struggling to make minimum payments on your credit cards and utility bills?
Do you currently owe back taxes (either income or property taxes)?
Are your wages being garnished?
Are you receiving threats of foreclosure from your bank?

If you answered yes to one or more of these questions you are in deep financial trouble or on the brink of deep financial trouble. You should seriously consider bankruptcy to help your situation.

What kind of bankruptcy should you file?

There are three types of bankruptcy relif: Chapter 7 (liquidation), Chapter 13 (debt repayment) and Chapter 11 (or reorganization).

Chapter 7 (or liquidation). This is where debtor’s assets are sold off to pay creditors. Some states require all the debtor’s assets to be sold, while others (like Florida) offer limited exemptions for homestead property, cars, and certain personal items. This type of bankruptcy is usually completed within three to four months.

Chapter 13 (or debt repayment). This kind of bankruptcy allows debtors to pay off creditors over a period of three to five years, while protecting property and certain possessions. The debtor must have a steady source of income for this type of bankruptcy to work.

Chapter 11 (or liquidation). This type of bankruptcy is used by individuals and business who do not meet the requirements for chapter 7 and chapter 13 bankruptcies. The debtor retains the assets and continues with the business and pays the creditor according to a plan approved by the bankruptcy court.

How to file for bankruptcy

You may file for bankruptcy on your own. However, it is best to use a competent bankruptcy attorney to help you navigate the complicated bankruptcy process and achieve the best outcome for your scenario. Before deciding whether bankruptcy is right for you, talk to a bankruptcy attorney.

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