When you are facing monumental financial challenges, bankruptcy often becomes the only option. Yet, individuals and families sometimes don’t understand the full process and implications of filing for bankruptcy before diving into it. An experienced bankruptcy attorney will be able to explain the entire process fully to you, but it is important to know when it is time to file.
The first thing you should do when you are feeling underwater with your unpaid bills and other debt is to try to negotiate with your creditors. Oftentimes, filing for bankruptcy, especially chapter 7, can leave your creditors unpaid, making it a lose-lose situation. Therefore, they will sometimes negotiate with you to make sure you can pay back the debt. If this doesn’t work, however, it may be time to file.
Next, consider your assets and liabilities. This includes what’s in your bank account, your monthly income and any other money you have access to. Then, consider all the debts you have, such as a mortgage and a car note. This is often the easiest way to figure out if you can pay off your debts on your own. If you can’t, filing for bankruptcy is often the solution.
Finally, think about your future. If you have an IRA fund set up, filing for bankruptcy can save that. A Supreme Court ruling from 2005 protected personal retirement funds from creditors in the event of bankruptcy. If you do not file, you could find yourself drawing from your IRA to pay off the debt.
If you are considering filing for bankruptcy in Ohio, it is often wise to consult an attorney. They can navigate you through the process and could help you save some of your assets.