Is Bankruptcy right for you

1. 
   

1. Unable to Repay Debts: If you see no feasible way to pay off your debts within the next five years, bankruptcy could be a viable solution1. It provides relief when you’re overwhelmed by financial obligations.

2. Debt-to-Income Ratio: If your total debt (excluding your mortgage) exceeds 40% of your income, bankruptcy may be worth considering1. This ratio helps assess whether your debt burden is unsustainable.

3. Collection Calls, Lawsuits, and Garnishments: Bankruptcy can halt collection calls, lawsuits, and wage garnishments. It provides legal protection against aggressive debt collection efforts2.

4. Types of Bankruptcy:

• Chapter 7: This type of bankruptcy involves liquidating non-exempt assets to discharge unsecured debts. It’s suitable for individuals with limited income and significant debt.

• Chapter 13: Requires a three- to five-year repayment plan. Although most people don’t complete Chapter 13 plans, those who do often see their credit scores improve after discharge2.

Remember that bankruptcy isn’t the end of the world. It can offer a fresh start and help you regain control of your financial situation. However, consulting with a bankruptcy attorney or financial advisor is crucial to making an informed decision based on your unique circumstances.