Even though bankruptcy is not the answer for every consumer, sometimes an individual needs to file bankruptcy to find some kind of peace in their financial life. As you get prepared to contact a bankruptcy attorney to determine if filing would be the right option for you, you may want to take some time to assess your financial situation more thoroughly. Certain attributes of your financial status can determine what type of bankruptcy you can file and what you can expect as you move through the process. Here are four things to examine before you make the call.
1. Your Income
Your income will determine a few things about your bankruptcy:
- Whether you actually qualify to file bankruptcy
- Whether you can file Chapter 7 or 13
- What repayment terms may be with Chapter 13
The bankruptcy attorney may ask for proof of income, such as pay stubs, statements from an employer, or even tax returns to get a verification of how much money you actually make. Therefore, it is a good idea to gather these things on your own, examine your actual income, and look at the income laws in your state associated with filing so you know what to expect.
2. Your Assets
Your car, your home, your real estate property—your tangible assets will be closely examined during bankruptcy, even if you are not filing on monies owed to creditors for these items. Certain tangible assets with high values can make it hard to file for certain types of bankruptcy.
3. Your Debt
Not all types of debt can be addressed through bankruptcy, and you may even have certain debts that you are capable of committing to paying. In any case, you will want a full understanding of your debt as a whole before you contact a bankruptcy lawyer. The attorney will be looking at your total debt and discussing your personal financial objectives, so the more you know, the more you can get a clear understanding of what creditors may be included in your filing.
4. Your Co-Signers
Co-signers are often overlooked when deciding to file bankruptcy, but they are an important aspect to consider. If you have credit that was initially extended to you because a co-signer helped, that person may be held liable for repayment in the event that you file bankruptcy. The laws can vary depending on the type of bankruptcy. For example, if you file Chapter 7, the co-signer on a loan may be wholly responsible or they may face negative repercussions on their credit.
