Is it time for Greensboro bankruptcy?
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When considering Greensboro bankruptcy, timing is everything. Getting into unmanageable debt isn’t an overnight process but a downhill slide over time. It usually starts with a bill you can’t pay on time, then escalates into a bill you can’t pay at all. From there, it might be a missed mortgage payment (or more than one), maxed out credit cards, and then a debt spiral where debt collectors start hassling you.
When your finances are out of control, bankruptcy can be a useful tool to recover and get back on the right track. It can be difficult to acknowledge that you’re so deep in debt that you need an intervention. Then there’s the challenge of knowing whether your debt situation is dire enough for bankruptcy to be the best solution. So, how do you know if the time is right? Here are four signs that point to Greensboro bankruptcy as your best solution.
1 – Does your debt exceed your ability to pay?
You can have unaffordable debt at any income level. Many celebrities have turned to bankruptcy despite earning millions. If servicing your debt takes up 50% or more of your income, that’s a warning sign of disastrous debt.
If you can cut back on spending and gain control over your debt, you should be able to recover without turning to bankruptcy. Unless your debt will drop soon, or your income will rise appreciably, you might be on the brink of a financial fiasco and should consider bankruptcy.
2 – Do you pay debts by accruing more debt?
Ideally, your debt should go down every month as you chip away at principal balances on secured debt like your mortgage and auto loan. With unsecured debt like credit cards and medical bills, the best-case is to pay them down without accruing more debt.
But if you pay debt and bills by piling on more debt, it’s a red flag. For instance, if you pay your car loan using a credit card, that’s an issue. If you take cash advances on your credit card to pay your house payment, that’s troublesome and indicates you need another approach.
3 – Are you doing without?
Quality of life is essential. If your debt is so excessive that you’re living paycheck-to-paycheck, and doing without necessities, it might be time to consider Greensboro bankruptcy. People with money problems often neglect their health and even go without medical care or medications.
Are you scrimping to put food on the table, keep the lights on, and cover health insurance payments? These are all sure signs that your debt is out of control. Ditching your debt can take the pressure off and restore your peace of mind.
4 – Are your debts dischargeable in bankruptcy?
Another sign that bankruptcy is a good solution is that your debt circumstances are a fit for Chapter 7 or 13. With Chapter 7, unsecured debt like credit cards and medical bills can be fully discharged. If you’re behind on secured debt, Chapter 7 might not be a perfect fit.
With Chapter 13, you get on a three to five-year repayment plan to catch up on secured debt like your mortgage and car loan. You can also see a reduction of unsecured debt like credit cards and medical bills in Chapter 13. Does one of these solutions fit your debt scenario?
If you’re unsure about whether bankruptcy is a good fit for your financial dilemma, your best approach is to consult a reputable North Carolina bankruptcy lawyer about your situation. Bring in your debt documents, proof of income, and any collection notices to your consultation.
To get started with your get-out-of-debt resolution, contact the Law Offices of John T. Orcutt. Read reviews from our clients, then call 1-888-234-4181 to schedule a free Greensboro bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.