Is Bankruptcy The Right Option For You?
With most recent news showing growing unemployment and more home foreclosures on the horizon, you may be assessing your personal financial situation looking for options.
The median home price has eroded by 11.3 percent since October 2007 to $183,300 last month, according to a report issued by the National Association of Realtors. That is bad news for millions of homeowners across the United States who used the equity in their homes to finance their lifestyles. Refinancing your home to access the equity to pay of credit card bills may no longer be an option.
Many Americans are now underwater in their homes, which means that they owe more than the home is worth. If they were to lose their job, or get transferred to another city for work, selling the house would not payoff the debt that is owed on it in most cases.
Getting to the heart of your financial situation should be a priority. Building a budget that attempts to pay off your debt in a relatively short time is the first step.
First, list your debts and the minimum payments expected each month. Add this amount to your current monthly living expenses (i.e. car payment, mortgage payment, utility bills, grocery bill), then compare to your monthly income. Is there enough money to pay all the bills? Is there extra to begin paying off your debt faster?
You should also remember that some debt is not dischargeable. Back child support, student loans, judgments stemming from a wrongful act and most back taxed must be repaid. Filing bankruptcy will not get rid of these debts, but it could restructure the payments so that you can afford to pay them back more quickly. It can also limit interest and penalties on some of these debts.
Understanding the types of debts you have can be difficult. Consulting a bankruptcy attorney can help you untangle your maze of debt and clear the way for a debt-free future.