Most Americans carry some debt in the forms of student loans, credit card balances, and medical bills. It can be difficult to know precisely when to start seeking help for your debt. Not everyone is a good candidate for bankruptcy. Here are some of the signs that it is time to start seeking help for your debt issues and what steps to take next.
If your debt load becomes so high that it begins to impact your ability to pay your family’s monthly expenses, it is time to start considering what steps you can take to remedy it. Sometimes, the issue is a short-term one. If you have experienced a job loss, finding a job quickly can help to alleviate the situation. Taking an extra job or driving for Uber might be able to pay off some unexpected expenses.
However, suppose you repeatedly face challenges paying for your mortgage, utilities, food, or gas, and these other circumstances do not apply. In that case, it might be time to consider taking a more radical approach to managing your debt. This could include working with a financial advisor, consolidating debt, working out new terms or repayment plans, and filing for bankruptcy protection.
As you fall further behind on your debts, creditors will begin the process of repossessing assets. There are rules on how they can recover assets to pay your debts. If they have reached the point where your creditors are preparing to take your assets, it’s time to consider bankruptcy.
Depending on how you file bankruptcy, your assets will be protected. That way, creditors cannot take them while you work out a payment system.
Being too far in debt is also a reason to consider bankruptcy. There is a point where you will owe so much that you cannot pay it back. If your debt, excluding your mortgage, is worth more than you earn in a year, it is time to consider bankruptcy.
At that point, your debt may be too much to recover from. This is especially true if you don’t have assets that you can liquidate. You could consider downsizing your vehicle and home if they are more than you need and are high value. However, those are assets you may be able to keep if you file for bankruptcy.
Getting out of debt and starting over can be difficult, but the most challenging part is getting started. Take the first steps toward dealing with your debts by contacting Kain + Henehan by calling (612) 438-8006 or filling out the online form. We work with people like you to get out from under the mountains of debt and start over.