Deciding to file for bankruptcy is a major financial decision that you should not make lightly. People sometimes put off filing for bankruptcy for many reasons, when bankruptcy could be the best option.
Why people do not file
You might worry that bankruptcy will impact your credit score. It is true, a bankruptcy will. However, the effect may not be as bad as you think.
Your credit score will initially take a hit after your bankruptcy, but there are plenty of ways you can slowly rebuild your credit after bankruptcy.
Some people also have moral or ethical concerns over filing for bankruptcy. They see it as a sign that they are a failure or poor with money.
These things are typically not true of most people who file for bankruptcy. Many bankruptcies are the result of unexpected events that ruin someone’s financial life, no matter how good they are with money.
For example, you could sustain a serious injury that results in thousands of dollars in medical bills that you cannot pay. You could lose your job through no fault of your own, such as in a mass layoff situation, and have to rely on credit cards to survive.
When you should probably file
There is no exact moment when you will know that it is time to file for bankruptcy. However, if your debt becomes so overwhelming that you cannot fulfill your basic needs, you start ignoring creditors or are defaulting on your financial obligations, these are all signs that bankruptcy could be your best option.
In fact, sometimes waiting too long to file and hoping you can fix the problem yourself can cause you even more financial problems.
You can sometimes shield certain assets from your bankruptcy, such as retirement accounts or your home. It is usually better to file bankruptcy rather than use these assets to try to pay debt you could otherwise eliminate with bankruptcy.
Bankruptcy has helped many West Virginia residents make a fresh start and get out from under crippling debt. An attorney can review your situation and advise you on if it is time to file.