A bankruptcy filing should be considered when all of your disposable income is going to pay unsecured creditors (credit cards, medical debt, unsecured personal loans). Many clients think they can dig out of the hole that was created with these loans. Oftentimes the individuals are just paying interest and fees on the cards, and will need to make payments for ten years or more just to pay off the balance. By making all these payments individuals are not saving for retirement.
What ends up happening in many cases is that people struggle for years making payments on the unsecured debt, and wind up with no savings of any sort for retirement, when they are thirty, then forty, then fifty, and eventually they reach retirement age with no savings. This can be solved if individuals would address their debt issues early. The debt issues can be resolved by filing for bankruptcy or negotiating the debt. Once the unsecured debt has been discharged the person can begin to save for the future. The earlier people are able to get rid of the unsecured debt, the better off they will be in the future. In many cases the longer a person waits to consult a bankruptcy attorney, the worse their situation becomes. The absolute worst mistake is to use exempt retirement funds to pay down unsecured debt without consulting an attorney to determine if you have other options.
Write a comment
- Required fields are marked with *.