When Is It Time to File Bankruptcy?

As a Huntsville area bankruptcy lawyer, I see people throughout northern Alabama ask three very understandable questions when the idea of filing for bankruptcy comes up:

  1. Isn’t bankruptcy a bad thing?
  2. Why should I even consider bankruptcy as an option?
  3. How much debt do I need to have to qualify for bankruptcy?

Let’s cut right to the chase. “Bankruptcy” is a scary word to most because they associate it with financial failure. In truth, though, the bankruptcy process only exists to give everyday people the power and the means to eliminate crippling debt from their lives. Don’t think of bankruptcy as a sign of defeat. Think of it as a tool to get a well-deserved fresh start.

As for how much debt you need to qualify for bankruptcy, there is, unfortunately, no magical number that fits every situation. Each case is unique, and the best way to know for sure whether bankruptcy is a route worth pursuing is to schedule a free one-on-one consultation with a local attorney. Generally speaking, I advise my clients against bankruptcy if their unsecured debt (that is, credit card bills, medical bills, personal loans, and other debts not tied to property) add up to $10,000 or less.

So, How Do I Know If I Should File for Bankruptcy?

As I’ve already said, bankruptcy is nothing to be ashamed of — especially if you, like so many others, came to feel your financial strain because of something outside your control. To put things in perspective, consider this: a 2019 CNBC report revealed that approximately two-thirds of bankruptcy filers cited unpaid medical bills as the leading cause of their financial issues. Many others cited foreclosure, financially assisting others, and divorce as their top contributors.

Regardless of the events that led to your debt, the most important thing now is getting proactive about beating it. If any of the following scenarios applies to you, bankruptcy may be a solution worth exploring further:

  • You have over $10,000 in unsecured debts, such as credit card debt, unpaid medical bills, or personal loans
  • You’re being sued by a creditor or bill collector
  • You’re facing foreclosure
  • You’re behind on car payments or your vehicle is subject to possible repossession

Heavy debt is one of the leading stressors in Alabama today, but you can make a choice here and now to attack it head-on rather than letting it control your life. I encourage you to take advantage of a free consultation with me if you’re seriously considering the possibility of filing for bankruptcy. After reviewing your specific situation, I’ll explain your best options so you can start taking steps toward a debt-free future.

Huntsville, Alabama Debt Relief Solutions

At my law firm, Jeffrey B. Irby, P.C., we like to think of our approach to debt relief as a two-part service. Part 1 is strictly about discharging your debt (that is, eliminating your debt) whether it’s through Chapter 7 bankruptcy, Chapter 13 bankruptcy, or another debt relief solution. Part 2 is all about rebuilding your credit score so you can get lower interest rates in the future.

Though the second part of this mission isn’t a bankruptcy requirement in the state of Alabama, I believe that my clients deserve every advantage to not only get past their current debt, but to rebuild their credit and learn how to avoid such situations in the future. For these reasons, I offer my clients a credit counseling course called “7 Steps to a 720 Credit Score” — a $1,000 value that I provide free of charge.

If you live in northern Alabama and are feeling overwhelmed with debt, please don’t hesitate to give my office a call. It would be my pleasure to sit down with you and discuss whether filing for bankruptcy is the right option for you.


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