Should I File for Bankruptcy? A Philadelphia Chapter 7 Bankruptcy Lawyer Answers Some Common Questions
Bankruptcy is the legal procedure that allows people who are struggling financially to discharge debt and move on with their lives. Filing for chapter 7 bankruptcy with a Philadelphia lawyer can potentially come with some costs including a hit to your credit score, however, if you are struggling to make ends meet saving your credit score may be the least of your concerns.
Assess Your Situation: Are you Able to Pay?
“Are you able to pay?” is a deceptively simple question with a potentially complicated answer. The answer to the question relies on the answers to the following:
- How much you owe?
- Do you use credit cards to pay for the basics?
- Can you only afford to make the minimum payments?
- Are bill collectors hounding you?
- Do you spend a lot of time worrying about your financial future?
If you owe a large amount and answered yes to several of these questions, filing bankruptcy could be the right option for you. If you have a smaller amount of debt and answer yes to only one or two of the questions then you may be able to reassert control without filing bankruptcy.
What are Your Alternatives? Reassert Control Over Debt
Before you file for bankruptcy, you can try renegotiating the terms of your debt with your creditor. Most creditors will avoid pushing you into bankruptcy because they would collect pennies for every dollar they lent you. You, therefore, have some bargaining power to extract concessions such as lowering monthly payments, forgiving penalty fees, and reducing interest charges. In some cases, strict budgeting over time is enough to pay down debts, however, your credit will also be damaged by delinquencies.
While most financial professionals advise against withdrawing funds early from retirement accounts, doing so can be a way to reassert control. The downside of using retirement funds to reassert financial control is the tax penalty, sometimes as high as 10% of the amount withdrawn. Contact a professional, such as a Chapter 7 bankruptcy lawyer before making any large financial decisions and educate yourself on the repercussions.
Is Bankruptcy the Choice for You? Weigh the Options
Being under the strain of overwhelming debt is a source of great stress, and anyone can find themselves in a tough financial situation. Bad decisions, medical costs and other unexpected large expenses can cause debt to mount quickly.
Whether you try to dig yourself out of debt or file for bankruptcy, your credit will be impacted. A professional will help you decide the best course for you. One big benefit of consulting a Chapter 7 bankruptcy lawyer in Philadelphia is that if you decide bankruptcy is the right choice, he will guide you through the often confusing process, helping with paperwork and court appearances, and within a few months, you will be in a position to begin anew; you can begin rebuilding your good credit right away.
Let a Philadelphia Chapter 7 Bankruptcy Lawyer Help
Bankruptcy can be intimidating, but allows a fresh start. Upon completion, your debt will be discharged or reorganized, debt collector calls will cease, and you will have the relief of knowing that your finances are back under control. A Chapter 7 Bankruptcy lawyer in Philadelphia at Alfred Abel Law Offices will answer your questions about bankruptcy and help you move forward. Contact us for a consultation today.