The idea of filing for bankruptcy is intimidating and, unfortunately, the process is designed that way. Lawmakers don't want to make walking away from debt the easy option.
After all, everyone has some amount of debt. If we could all easily shed that every time it accumulates, it would seriously damage how credit works. But sometimes debt gets out of hand, which is what bankruptcy is for.
But when is there enough debt to file for bankruptcy? That depends on the kind of debt you have and how much you've accumulated.
Some Debts Aren't Forgiven in Bankruptcy
Not all debt is created equal. Bankruptcy will help with unpaid bills and personal loans, but there are some kinds of debt that can't be cancelled.
Student loans generally won't be discharged; neither will court judgments against you. Tax debts, alimony, and child support are also debts that won't go away.
But even if your debt includes some non-discharagable amounts, that doesn't mean bankruptcy won't help.
A big beneft of the process is that creditors have to stop calling while the bankruptcy is ongoing. It also helps you restructure the debts that remain so that the payments are more manageable.
Bankruptcy is for Rebuilding Your Life
The time to declare bankruptcy is when your debt has taken over your life. But the first thing courts will want to know is why you aren't just paying it off or figuring out some kind of payment plan.
If you haven't considered alternatives already, do it before you file.
But for some people, their debt is so high that repayment is effectively impossible. Those people are often getting constant calls from creditors as well.
When debt is actually stopping you from answering the phone or is causing serious stress because you are unable to repay the amounts owed, bankruptcy could be the answer.
At that point, it's good to seek out an attorney who can help you decide what steps to take next. Not only will it help your case, it will also help your sanity.
Each person's bankruptcy case is different just like each person's debt is different. But if debt is ruining your life, then it's time to start rebuilding.