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Is filing for bankruptcy right for you?

On Behalf of | Mar 23, 2020 | Bankruptcy

When Arkansas residents fall into debt, there are several ways back out. Bankruptcy is a viable route for some to go. But there are some people or situations where bankruptcy may not be the answer. How can you tell if it will work for you?

Debt.org takes a look at some of the requirements needed to file for bankruptcy. They highlight the fact that bankruptcy is not meant to be a move made in desperation. It has helped countless people get back on their feet after financial disaster.

There are some things to consider before filing for bankruptcy. First, how permanent is your current situation? Do you expect it to change soon? Have you tried negotiating a lower debt? Is this something that budgeting or increasing income could fix? For some, these other solutions work. For others, they are not enough.

If you still wish to proceed with bankruptcy, understand there are requirements. For example, you may not be able file for Chapter 7 if you make above a certain level of income.  You will have to pass a “means test”. A bankruptcy attorney can help you determine if you qualify for Chapter 7 and if Chapter 7 is your best option. If you wish to file for Chapter 13 instead, there are still requirements to fulfill. You must have a steady income source. You also need unsecured debts less than $394,725 and secured debts less than $1,184,200.

Many people do not expect so many rules to be in place when filing for bankruptcy. If you wish to file, see if you qualify first. From there, you can decide what options are best.