Bankruptcy can be an effective way for an individual to obtain relief from credit card, student loan or other debts. However, it should generally be seen as a last resort for those seeking a way out from a crushing debt load. What are some signs that bankruptcy may be in your best interest?
Your Debt-to-Income Ratio Is Above 50 Percent
If your debt-to-income ratio is higher than 50 percent, you are likely a candidate for bankruptcy. This is because an inordinate amount of your income is going toward lenders, and it may stifle your ability to save for emergencies or for retirement. When you first consider filing for protection from creditors, talk to bankruptcy lawyers Rockford IL. Doing so will help you determine if there are any other options that can help you get control of your finances. If not, they can talk more about the process of filing and the benefits of doing so.
You Don’t Have a Lot of Assets
Bankruptcy can be a great option for someone who doesn’t own a car, have a house or have money in the bank. This is because creditors won’t have anything to seize in a liquidation bankruptcy. If you have equity in a home, it may be protected under state or federal law.
Bankruptcy lawyers Rockford IL may be able to help you learn more about your right to protect assets during a bankruptcy. In the event that you do qualify for Chapter 7 bankruptcy, the case could be resolved in a matter of weeks without paying anything to creditors. However, if you do have assets like a home or a car, filing under Chapter 11 or Chapter 13 may be in your best interest.
Learn more about how the Crosby Law Firm can help with your case by going to TheCrosbyLawFirm.com.