Many people scowl at the idea that they might have to file for bankruptcy protection. Many people connect bankruptcy with someone who only knows how to spend, and do not know one single thing about the importance of saving. You will suffer low credit score for up to 10 years post bankruptcy process. If you are in desperate financial situation with mountains of debt and with no power to pay it back, you should not let something like the credit score stop you from filing bankruptcy. If you are looking to start fresh and become debt free overnight, then bankruptcy is within your legal right and you should not be scared to exercise it. Is there a certain situation that can indicate that you should be filing for bankruptcy shelter?
It will be nice if there is a certain rule that dictates when you can or should file for bankruptcy shelter. You can choose to file bankruptcy at your own discretion and depending on your personal life at the time. If there was a general rule if you should be filing bankruptcy or not, it should depend if you can survive the next 3-5 years without filing bankruptcy.
Can you pay back your debt within 3-5 years and yet still live a comfortable life (by no means excessive like before)?
If you can scrap by and yet still afford to pay back the creditors within 3-5 years, then bankruptcy might not be right alternative for you. If you have to vary your lifestyle around 360 degrees like giving up on the necessities in life such as substituting real food with bread every single meal in order to pay back your creditors, and you will need to do this for the next 5-10 years, then bankruptcy is for you.
Let us give you a numerical example. If you owe $50,000 in debt, for argument’s sake, they are all credit card debt. If the credit card accrues the interest at 20% APR, that means that you will need to pay $500 per month for 8+ years in order to pay off the entire credit card debt. If paying $500 per month for the next 8+ years is going to make a serious dent in your lifestyle, then you should consider bankruptcy as an alternative out of this financial debacle. If you choose the bankruptcy route, you can effectively save that $500 per month and use that as your cushion for future expenses. Do not hesitate to seek help with bankruptcy just because you worry about your credit history. Currently your credit history is already not the most ideal, so why not take advantage of it and start anew with absolutely no debt under your belt?
Do not let the thought that your credit history will be ruined deter you from filing bankruptcy. If you can stick to a good financial planning strategy, it is possible to restore your credit score 2-3 years after you have filed for bankruptcy. Some people have even achieve high 600 or low 700 credit score several years after their bankruptcy filing. Not only will your credit score go up post bankruptcy, it is even feasible for you to qualify for a FHA house loan 30 months past your bankruptcy filing. Bankruptcy is not a scary affair, it can be liberating if you select to do so. If you need help structuring your bankruptcy strategy, look for a bankruptcy attorney in san diego who can help you along the way. Take charge of your finances, file bankruptcy if you need to, and embark on a journey to be debt free for the rest of your life.