How can an individual or married couple best determine if bankruptcy is the right solution to deal with an unmanageable debt load? Frankly, the very best way is to make an appointment to discuss the facts with an experienced consumer bankruptcy attorney. For those here in Arkansas or those located elsewhere who cannot do that immediately, there are a few things to look at.
It is recommended that a single person or married couple take a look at the total financial picture first. Get all bills, income records, evidence of assets owned and monthly expenses owed for keeping a household going. The key issue is the ability to pay in light of current and projected income weighed against the total amount of expenses owed.
To find the answer, determine whether all household monthly income available is sufficient to pay the household expenses, such as utilities, taxes, insurances, medical expenses, improvements, fees, food, school or educational expenses and the like. Add to that the consumer bills that one must absolutely pay each month, i.e., mortgage and car loan payments. If there are no funds left, bankruptcy is a definite subject to look into further.
In other words, if one can't pay for all household expenses, and for the cars and the house, or if it is an extremely tight squeeze each month, then a private debt relief plan through an agency will not work, no matter how much the agency or the consumer wants it to work! If your budget does not leave any excess income to pay something on unsecured consumer debt each month, then bankruptcy is possibly the best solution because the unsecured debt is wiped out permanently in a Chapter 7 bankruptcy. The issues currently involved in making such a decisions deserve taking a little bit of time to meet with a consumer bankruptcy lawyer versed in federal consumer bankruptcy procedure as practiced in Arkansas.
Source: santaclaritafree.com, "Is Bankruptcy Right for You? 5 Questions to Ask Yourself", Ray Bulaon, Oct. 14, 2016