I am having money problems. Should I file for bankruptcy?
Question & AnswerI am having money problems. Should I file for bankruptcy?
Bankruptcy is a legal process that allows you to get rid of your if you cannot pay them off. Bankruptcy can give you a fresh start. But it will affect your ability to get cards, mortgages, or other loans in the future.
You can only file for if you are insolvent. Insolvent means that:
- you don't have enough money to pay your debts, and
- you have more than $1,000 in .
An unsecured debt is money that you owe that doesn't have . For example:
- credit cards
- payday loans
- cell phone bills
- lines of credit
Before you file for bankruptcy
Most people can fix their debt problems without filing for bankruptcy. Instead of bankruptcy, you can:
- try to work out a repayment plan with your creditors. You can talk to your creditors on your own, or with the help of a non-profit credit counsellor. This kind of repayment plan is called an informal restructuring.
- talk to a financial advisor at your bank. An advisor can help you make a plan to pay off your debts. They can also help you apply for a .
- talk to a Licensed Insolvency Trustee about your financial situation and what you can do. And a trustee can help you file a , which is another option.