How To Decide If You Need to File Bankruptcy

by Susan Paige
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Buying a home or other large expense can make your life more enjoyable and fulfilling. However, life doesn’t always go as planned, and your picture-perfect home or life-long wished for purchase you put on a credit card can end up haunting you if your bills get to be too much. You can end up over your head financially with too many expenses and not enough resources leading you to consider filing bankruptcy in Michigan. However, weighing your options and current financial situation is key to ensuring you’re making the right decision. Here are four steps you should take to figure out if you need to file a bankruptcy claim or not.

1. Analyze your financial correspondence from the bank.

Sometimes the communication from banks or creditors can be confusing. Are they letting you know you’re behind on your payments and need to get current, or have they actually opened a case against you and are looking to act ASAP? Before you contact a lawyer or take the necessary steps to file, you have to fully understand the paperwork. Call the lender with questions if you’re confused, or talk with a trusted family member or friend who may be better at understanding legal financial correspondence. Whatever you do next starts with making sure you fully understand your current situation.

2. Look at whatever financial resources you have.

Take a deep look at your current financial status including your salary and liquid cash. Do you have enough money to keep paying on your home’s mortgage, or are your resources depleted? What can you cut out of your lifestyle for the time being while you figure out how you can make up lost payments and try to get back on track? Be very honest with your current situation to see if there’s a way to maintain ownership or if you have to find a way out.

3. Seriously consider filing bankruptcy.

If you have more debts than resources, you have to deeply analyze if filing bankruptcy is your best option. It’s possible you could file bankruptcy on your credit cards and keep your home, depending on your financial situation. However, if you end up deciding bankruptcy is your only option, getting in touch with a lawyer will help you better understand each and every type of bankruptcy you can file for your specific situation.

4. Figure out if you’re going to fight or settle.

Once you decide to work with a lawyer, you’ll have to figure out if you’re committed to trying to pay your back payments and get caught up to keep your home or if you want to get into a legal battle with the creditor. A lawyer can argue on your behalf the creditor failed to follow the proper protocol, doesn’t actually own the loan or the company is incorrect about how much money you owe. Winning a case with one of these defenses will be the best outcome for your credit score.

Everyone hopes they will never have to be in the boat where filing bankruptcy is their only option out of a financial mess. However, finding ways to move forward, whatever your decision is, will get you one step closer to getting past the unexpected hurdle and back on track to living your best life.

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