Filing for bankruptcy is a big financial decision that should be carefully considered. When you have a lot of credit card debt and are in financial turmoil, it can be difficult to sort through all your options and figure out what is best. Bankruptcy is one possible route you can take.
Before you pursue bankruptcy to get rid of your credit card debt, consider the following questions. Your decision largely depends on your answers.
Are you able to pay off your credit card debt?
When you are contemplating bankruptcy, figure out if you have enough income to pay back your debt. If you have significant disposable income, you might be able to go through a Chapter 13 repayment plan. On the other hand, if you do not have enough to eventually pay it off, Chapter 7 bankruptcy might be right for you.
How much property do you have?
Considering your assets is crucial because Chapter 7 bankruptcy allows the trustee to sell off your nonexempt assets to pay your creditors. With Chapter 13 bankruptcy, you get to keep your property, but you will still have to pay unsecured creditors an amount equal to the value of any nonexempt assets you own.
Are you being harassed or sued?
If you have not made credit card payments for a while, you might start getting calls from your creditors. The longer you fail to pay, the more frequent the calls tend to become. Depending on how behind you are, the credit card company or debt collection agency may bring a lawsuit forward. In either of these cases, you might find it best to consider bankruptcy.
As you can tell, filing for bankruptcy is not a decision that you should take lightly. If you are still uncertain about what you should do, contact a bankruptcy attorney for counsel on debt relief.