How to Know When You Should File for Bankruptcy

How to Know When You Should File for Bankruptcy

Bankruptcy laws are in place to help people who are in difficult financial situations obtain firmer financial footing. In other words, bankruptcy laws are intended to help people – and are not a symbol of financial incompetence, recklessness, or desperation – as they are often depicted. Whether or not you are in a situation in which filing for bankruptcy is a good option depends on a number of factors, but understanding the bankruptcy basics can help you determine what’s best for you. If you have concerns regarding your finances and bankruptcy, consulting with an experienced Michigan bankruptcy attorney is well-advised.

Concerns about Bankruptcy

While there might be some social stigma associated with bankruptcy, there needn’t be. Bankruptcy offers a financial do-over for those who need it, and it is a legal tool that can help you get your finances back in shape over time. If you are in a situation for which bankruptcy is a viable option, it can offer you a valuable financial opportunity.

Job Loss

While bankruptcy can have any number of causes, one of the events that is most closely associated with bankruptcy is job loss. Losing your job can take a financial toll that is difficult to overcome, and if finding a new job becomes a lengthy process, serious financial difficulties are almost a certainty. The recent pandemic contributed to considerable job loss, and bankruptcies are increasing as a result. If you’ve lost your job, it might be time to consider bankruptcy.

Healthcare Costs

Another life event that often goes hand and hand with bankruptcy is illness or injury. Because being injured is often accompanied by job loss or decreased wages, it can act as a double-edged sword. As your medical expenses mount and your earnings dwindle, bankruptcy could prove to be a lifeline.

Other Common Causes of Bankruptcy

Healthcare concerns and job loss are both serious events that can disrupt your life in serious ways – one of which can be the need to file for bankruptcy. Life, however, has a way of throwing plenty of hurdles our way, and any one of the following can also tip the scales toward the need to file for bankruptcy:

• Divorce can leave your finances in tatters and with few options for rectifying the matter, which means that it can lead to bankruptcy.
• If creditors are threatening to sue you – or are suing you – for back payments, bankruptcy may help.
• If your home is underwater and in danger of foreclosure, it’s time to discuss the matter with a dedicated bankruptcy attorney.
• If you are living off credit cards – and are using one card to pay for another – seeking the financial help you need is well advised.
• If you are preparing to dip into your 401k to help with your current financial difficulties, you may be experiencing a financial setback that is worthy of bankruptcy.

Don’t Wait to Consult with an Experienced Michigan Bankruptcy Attorney

The resourceful Michigan bankruptcy attorneys at Lucido & Manzella, P.C. understand the serious nature of your financial situation and have the experience, drive, and legal insight to help. For more information, please don’t wait to contact us today.