Filing for bankruptcy is not a decision that you should take lightly as it could impact your life for years to come. For instance, it’s possible that you could lose equity in your Tennessee home or other assets that you currently own. Therefore, while you can file for bankruptcy regardless of your current debt load, it may not be the best option in your case.
The types of debt matter
There are debts such as recent income tax, child support and alimony payments that cannot be discharged in bankruptcy. Student loan debts are also difficult to discharge in a personal bankruptcy. Therefore, if you’re behind on payments to the government or your child’s other parent, it may not be worth it to file. Instead, you may want to work out a payment plan or find other ways to make your current payments more affordable.
When your debt is less than $10,000
If you owe less than $10,000, it may be easier to seek out a consolidation loan or a payment plan to repay outstanding balances. You may be able to obtain more time to pay, a lower interest rate or other adjustments that make it easier to get caught up with your bills. Of course, if you’re already behind on your payments, the hit to your credit score might negate the potential benefits of paying your debts in full.
Other factors to consider
Seeking protection from creditors may make it difficult to get a security clearance or to qualify for jobs in the financial sector. It might also make it harder to rent an apartment or find affordable insurance policies. In addition, if you have a credit account with a bank or credit union, you could also lose your checking or savings accounts there after filing.
Seeking protection from creditors may enable you to eliminate debts without losing property even if it is secured by collateral. Furthermore, the automatic stay means that you might be able to get a discharge without having to speak with or otherwise interact with your creditors.