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Bankruptcy Doesn't Need To Be Stressful
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Signs That You Should Consider Bankruptcy

Question: I have never been someone who spends a lot of money. Luxury items are just not on my list. About three years ago, I got a new job that seemed very promising and stable. Finally, we had enough cash to get some new items around the house that we had needed.

We used credit cards, knowing that we could make the payments. Suddenly, from nowhere, there were layoffs and I have been without a job for over a year. Now we are struggling to pay not just the credit card bills, but basic necessities. When do you go from strapped to filing for bankruptcy?

Answer: You are not alone in being blind-sided by a job loss. Many people like you who are financially prudent have found themselves in the same place you are. When basic necessities are difficult to meet and credit card payments are impossible, it is a good time to start reviewing whether filing for bankruptcy makes sense.

There is no shame in filing for bankruptcy. Many people are embarrassed that their financial situation has gotten out of hand. It’s important to remember, however, that the bankruptcy code was developed with your specific situation in mind: It was created to help people who had unexpected financial difficulties get a fresh start in life.

The process is fairly straightforward; in your case, it sounds like your liabilities far outnumber your assets. You would therefore most likely qualify for Chapter 7, which is a complete discharge of all your debt. This would allow you to eliminate your credit card debt.

Once you find a new job, you would be free to start building a nest egg again.  Credit may be obtained after filing for bankruptcy, with secured cards often being offered only one year later and unsecured credit often being obtained after about five years.

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