Filing for bankruptcy can help alleviate debt and provide individuals with a fresh financial start. However, bankruptcy is not for everyone. Determining whether to file is contingent on a variety of factors as well as your individual situation. If you are considering bankruptcy as a means to combat extreme debt, bankruptcy law attorney, Donna C. Crooks Attorney At Law in Daleville, AL, will help you determine whether filing is right for you.

What Is Bankruptcy Law?

Bankruptcy law refers to a legal process initiated by an organization or individual who is unable to pay their debts and seeks to have them reorganized or discharged by the courts. The three most common bankruptcy filings are Chapter 7 (individual petitions), Chapter 11 (business reorganization and rehabilitation), and Chapter 13 (wage earner’s plans).

When Filing Makes Sense

When it comes to bankruptcy law, there are a few scenarios where filing may be beneficial: 

• You Have Already Attempted to Negotiate: Suppose you have failed to negotiate or work out a repayment plan with your creditors. Should they demand full payment, you may be left with little choice other than to evaluate your bankruptcy options.
• Your Liabilities Exceed Your Assets: If your monthly debt payments exceed your monthly income, bankruptcy may be right for you. For instance, consider a debtor who owes $600,000 to a financial institution and whose monthly debt service is $5,000. If this individual only has $90,000 in assets and a monthly income of  $2,000, filing may be an option worth considering.
• You Want to Keep Your IRA: Some people believe that their IRA savings may be liquidated if they file for bankruptcy. This is no longer the case. Back in 2005, the Supreme Court ruled that federal bankruptcy law would protect IRAs from creditors moving forward, which will likely afford you the ability to retain your savings, despite filing for bankruptcy.

To learn more about bankruptcy law as it applies to your own unique situation, contact Donna C. Crooks Attorney At Law. Serving Enterprise, Troy, Geneva, Ozark and Dothan, AL, area clients for more than 20 years, attorney Donna Crooks provides expert legal counsel across an array of case areas, including bankruptcy law, personal injury, military divorce, child custody, child support, wills and probate matters. Visit her practice online or call (334) 598-9534 to schedule an appointment.