Should I file for bankruptcy? That is a question a lot of people are asking themselves nowadays. The economy has been on a decline, the job market scarce, and the signs of improvement are very slow. We all have hope that things are beginning to get better, but in the meantime there are immediate solutions needed in our daily lives as individuals.
If you or your spouse (or other provider) has lost a job and income, bankruptcy is not the first thing to consider. The first thing to look at is, of course, filing for unemployment. If you were laid off, you have a good chance of being an eligible candidate to collect for a certain period of time (usually up to 6 months at the max). These checks will only be a certain percentage of the income you had at your job, and you will need to demonstrate to the unemployment office that you are indeed seeking work. If you do not, they may opt to withhold until you do so.
Because unemployment doesn't offer the amount you need to truly stay at your preferred means of living, you'll need to adjust to cutting back and making sacrifices on your financial lifestyle until you find work. Filing for bankruptcy may wind up being necessary at some point, but you should consult a financial expert before doing so.
You may not be aware of this, but even losing hours or losing one of multiple jobs (hence, being partially employed or under employed) can still cause you to be eligible for unemployment. Check with your local state's unemployment office to verify this. Try making more than one phone call, too. Unfortunately, it is possible to get someone on the phone who doesn't know what they're talking about, once in a while! Request materials by mail so you can be 100% certain of what your rights are.
If you have not found work by the time your unemployment benefits expire, you may be eligible for the new unemployment extensions instituted recently by our federal government. Again, contact more than one unemployment official to get the most accurate information, and also request materials by mail when you call. If they say you are ineligible, politely request a packet with the information on who is eligible.
There are, as a last resort, multiple forms of bankruptcy for which you may opt to file. Remember that these options are not a sign of defeat and should be used to your advantage depending on whether they are appropriate. However, remember that finding work should be your first priority.
Don't listen to the naysayer: there are still jobs out there. If you go to a business and see people working, that is proof enough. Believe in yourself and keep going for your dreams!
Is filing for bankruptcy bad? Well, it will affect your credit score (of course). But if you can't keep up with your bills and other payments, this will also negatively impact your credit score. If you are in a bad financial spot, it may be time to enlist the help of a financial expert or debt consolidation officer.
If you are not sure where to turn, try asking at your local bank or credit union. Obviously, you have an established ongoing relationship with them, and they have a vested interest in ensuring that your financial status stays above board. If you are in the hole, that doesn't do much for the livelihood of their institution. So try asking for advice, for example, from the loans department at your local bank. Perhaps they offer a debt consolidation loan that can help you get caught up without losing your credit standing.
Bankruptcy is always something that should be considered a last resort. However, that doesn't mean that it should be considered not an option. Many people believe that this term means that they have nothing and are declaring that officially. Although in the most rudimentary sense that is true to a degree, there is a stigma that filing any form of bankruptcy constitutes giving up on one's financial well-being. This is not true.
If you need to file, that simply means you have recognized that your options are limited in terms of getting yourself caught up, and that you've tried just about everything else within your power to do so. Filing bankruptcy may have tax advantages and may help you escape from the clutches of financial despair. It could be a new start!
Before you file any form of bankruptcy, talk with a financial expert about what your options are. Perhaps there is another option that will have less of a long-term effect on your credit and so on. But don't believe that filing means defeat. This option is there for a reason and can really help in some instances.