Debt burdens could prove impossible to pay. A Texas resident might struggle for months and months to figure a way out but might not readily consider bankruptcy. Some may worry about the stigma associated with filing for bankruptcy while not thinking about the potential benefits. Bankruptcy offers a means to put collectors at bay and presents a chance at a fresh start. While bankruptcy might not be necessary for everyone, some could benefit from its protections.
Bankruptcy might be the right option
Constant calls from collectors could put someone into a terrible state of financial stress. When a fiscal situation becomes mentally and physically exhausting, bankruptcy may be worth considering. Continually paying the minimum balances on credit cards or falling behind on various payments might not seem tenable. Perhaps changing strategies would work.
Struggling to pay debts likely makes saving even a small emergency fund challenging. Someone over age 40 might be worried about retirement savings, and building a retirement nest egg would become massively difficult when their income goes towards paying credit card interest without ever touching the balance. “Tips and tricks” to pay down debt don’t seem to work, so something more effective might be worthwhile.
Struggling to pay for life’s essentials
When money becomes tight, people don’t only cut back on discretionary purchases. They may struggle to pay monthly health care premiums and housing expenses. Even purchasing food and household items may be difficult. Using credit cards or other borrowing sources only works for so long, resulting in financial devastation. When financially struggling this severely, filing for bankruptcy might be a workable solution.
Individuals may file for either Chapter 7 or Chapter 13 bankruptcy, depending on means-testing and other criteria. Hopefully, once bankruptcy ends, people will live a less financially stressful life.