SIGNALS TO CONSIDER REGARDING FILING FOR BANKRUPTCY

Signals to Consider Regarding Filing Bankruptcy

Bankruptcy is often not something at the forefront of people’s minds.  In fact, many people only consider bankruptcy when it is obvious that it is the only option. 

Obvious indicators we all know are things like death of a loved one, disability, divorce, prolonged unemployment, or a medical disaster.  It is easy to say bankruptcy is my only option once you have defaulted on your loans and cannot make monthly debt service payments regardless of how hard you try.  Most of my clients come to me at this stage.  The real problem is that they should have come earlier.

Many people have high amounts of unsecured debt they carry because they “can afford” the debt service payments.  The problem is they are not making any headway.  If they are not able to aggressively lower their debt and/or they are unable to contribute to their retirement, they are setting themselves up for failure to ever be able to retire or build wealth.  These individuals are often called living paycheck to paycheck.  One disaster can cause them to never be able to recover.  At that point, they may not be able to even afford to file a bankruptcy proceeding.

Some signals you should consult with an attorney about your financial distress:

-         You cannot afford to save for retirement regardless of your age.

-         You are pulling from savings or retirement accounts to pay debts.

-         You do not have a plan to be free of unsecured debts within three years.

-         Your total unsecured debts are equal to or exceed your annual income.

-         You are paying interest only or minimum payments on unsecured debts.

-         You are forgoing medical care to pay unsecured creditors.

This is a simple cost benefit analysis that an attorney can help you navigate.  These are not rules of thumb, but rather markers to have a conversation about your options.  The best part is the consultation is free.

If you are facing significant financial strain and want to explore how bankruptcy could provide you relief, then we invite you to contact McFerran Law, P.S. Our legal team has accumulated more than thirty-five years of bankruptcy law experience and is ready to help you explore your financial options during this difficult time. Call us at 253-471-1200 to schedule a FREE one-hour bankruptcy consultation at any of our offices in Tacoma, Seattle, or Kent.