Signs It Might Be Time To Start Considering Bankruptcy
In an ideal world, individuals and businesses would not need to file for bankruptcy. However, we do not live in a perfect world, and life can be unpredictable. According to statistics, in the year ending December 2023, there were 452,990 annual bankruptcy filings. This is an increase from the number reported for the year ending December 2022. In the year ending December 2023, individual bankruptcy filings increased by 16%, whereas business filings increased by 40.4%. While bankruptcy is not a decision to be taken lightly, there are some signs that might indicate it might be time to start considering it. Below, we share some of the signs it might be time to start considering bankruptcy.
#1: Overwhelming Debt
The number one sign it might be time to start considering bankruptcy is if you are struggling with overwhelming debt. Whether it is medical bills, credit card debt, or loan repayment, bankruptcy may provide you with a fresh start.
#2: Debt Collectors Are Suing You
Failure to repay debts may result in a creditor turning the debt to a collection agency. If you do not respond to the debt collector’s calls or emails, they may resort to suing you. If debt collectors have filed a lawsuit against you, it may be time to start considering filing for bankruptcy. After you file your case, the automatic stay will go into effect, halting collection actions by debt collectors.
#3: You Are Facing Foreclosure
Another sign it might be time to start considering filing for bankruptcy is if you are at risk of losing your home due to foreclosure. If your financial situation has reached a point where you are having problems keeping up with mortgage payments and are at risk of foreclosure, filing for bankruptcy can help stop foreclosure or buy you more time. It can help you get caught up on your mortgage payments and keep your home.
#4: You Are Facing Repossession
In cases where a person fails to make timely payments of their auto loan, the lender has the legal right to take back the vehicle as collateral for the unpaid debt. If you have fallen behind on making payments on your auto loan and the lender is threatening to take back the vehicle, it might be time to start considering bankruptcy.
#5: Your Wages Are Being Garnished
If a creditor obtained a court order for wage garnishment against you, it might be time to start considering bankruptcy. After you file for bankruptcy, the automatic stay will halt the garnishment. This can provide some financial relief if a huge part of your income is being withheld. However, it is vital to note that the automatic stay does not apply to garnishment for domestic support obligations, such as alimony or child support.
#6: The IRS Is Threatening To Seize Your Assets
If the IRS is contacting you and threatening to seize your assets due to unpaid tax debt, you might want to consider declaring bankruptcy. Filing bankruptcy can pause enforcement activities on your unpaid taxes. Depending on certain factors, you might even be able to discharge your tax debts or include them in your Chapter 13 repayment plan.
Contact Us for Legal Help
If you need help determining if bankruptcy is the right option for you, contact a Deerfield Beach bankruptcy lawyer at the Law Office of Adam I. Skolnik, P.A. to schedule a consultation. We help clients throughout the State of Florida including Fort Lauderdale to Boca Raton and Broward and Palm Beach counties.
Source:
uscourts.gov/news/2024/01/26/bankruptcy-filings-rise-168-percent#:~:text=According%20to%20statistics%20released%20by%20the%20Administrative%20Office%20of%20the%20U.S.%20Courts%2C%20annual%20bankruptcy%20filings%20totaled%20452%2C990%20in%20the%20year%20ending%20December%202023%2C%20compared%20with%20387%2C721%20cases%2
