In this day and age, just making ends meet is a tall task for many Michigan residents. Unfortunately, it doesn’t take long for debt to pile up. Being buried under mounds of debt can make any person feel stressed, worried and overwhelmed. However, when there seems to be no way out, filing for Chapter 7 bankruptcy can erase many types of consumer debt. Here’s how to know when it may be time to consider bankruptcy protection.
Assess the situation
Although bankruptcy can help an individual eliminate debt, it does not come without consequences. These parameters can help a person determine if he or she should consider filing for bankruptcy:
- When credit cards are needed to pay for necessities.
- When the individual is unable to make credit card payments or only able to make minimum payments.
- When the amount of debt owed is actually unknown.
- When finances have become uncontrollable.
Take inventory
Gaining a better understanding of finances can also help determine whether to pursue bankruptcy protection. The best way to do this is to take inventory of all liquid assets. Include things like stocks, bonds, retirement accounts, savings and real estate. Then, collect and add up credit card statements and other bills. If the value of assets is less than the amount of debt owed, bankruptcy may be a legitimate thing to consider.
Basically, bankruptcy could be the best option when a person owes more than he or she can pay. However, before filing for bankruptcy, it is recommended to speak with an experienced lawyer. A knowledgeable attorney can assess the situation and help any person in Michigan figure out the best way to proceed.
