Is it time to consider a bankruptcy filing? | Cohn Lifland Pearlman Herrmann & Knopf LLP
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Is it time to consider a bankruptcy filing?

The decision to file for bankruptcy is an immensely important and personal one. It mustn’t be taken lightly, and shouldn’t be the “first resort” when it comes to debt relief. That being said, however, there are some situations where a bankruptcy filing offers the best chance for a fresh financial start.

So, how do you know when is the time to consider a bankruptcy filing?

You’re facing foreclosure

When your debt load is so high that you are skipping mortgage payments, it might be time to seriously think about bankruptcy. Mortgage lenders are notoriously trigger-happy these days when it comes to foreclosure filings, so missing just a few payments might be enough to put you at risk for losing your home. A bankruptcy filing can help, though, because it discharges debt, which will free up the funds you need to cover your monthly mortgage. Further, a bankruptcy plan may prevent foreclosure.

You can’t cover monthly expenses

If your debt payments are eating up the income you need to cover basic monthly expenditures like utilities, gas for your vehicle and groceries for your home, you should think long and hard about bankruptcy. Bankruptcy might also be the best option if you find yourself putting these expenses on your credit cards. There’s no need to run up even more debt you cannot afford when bankruptcy could discharge it all for you.

Debt collectors are harassing you

Debt collectors are well-known for harassing and threatening tactics. They call many times a day, both to your home and your work numbers, leave threatening messages and write abusive letters. If you’re afraid to answer your phone or go to your mailbox, bankruptcy might be the answer. A Chapter 7 or Chapter 13 bankruptcy filing puts into place an automatic stay that temporarily ceases all debt collection efforts.

Your wages are being garnished

If a debt collector has already won a judgment against you, they may have garnished your wages. This means that you’ll be bringing home less in your paycheck each week, which, of course, can lead to even more debt since you have less money with which to pay other expenses. A bankruptcy filing can put an end to garnishment in most cases.  

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Cohn Lifland Pearlman Herrmann & Knopf LLP
Park 80 West-Plaza One
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Saddle Brook, NJ 07663

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