A common misconception is that the only reason to file for bankruptcy is if you’re behind on your payments. This is simply not the case. Although you may be current on your payments now, anticipated circumstances such as divorce, job loss or medical expenses may render you unable to make payments in the future. Instead of it being a last resort, bankruptcy can be used as a strong preventative measure to keep your life intact. Here are a few reasons why:
1. Won’t Take On More Debt
Typically when you’re in debt, you borrow money to stop from falling behind on your credit card or mortgage payments. A recession or job loss may keep you hopeful that the tides will turn, but then a few months become several years and suddenly you’re more in debt than you wanted to be, you’re now behind on your payments and you’re even at risk of losing your home. Filing for bankruptcy while you’re still current on your payments can prevent further troubles like these from arising.
2. Less Stress
Financial stress doesn’t just impact your wallet—it also affects your mental and physical health. High blood pressure, depression, insomnia, risk of heart attack and a weakened immune system are just some of the serious effects of stress. Stress, and the underlying effects, can in turn cost you more in medical bills and put a strain on your relationships, which are the last things you want while you’re going through tough financial problems. Prevent the stress by filing for bankruptcy before your financial troubles become insurmountable.
3. Keep Your Savings
Many deplete their savings when trying to keep current on payments. You may not know this, but the money in your savings account (or some of it) may be exempt if you file for Chapter 7 bankruptcy. Depending on the state, you may be able to keep a good amount of your savings instead of wasting it on payments you’ll eventually fall behind on.While bankruptcy isn’t always the answer, it’s a good option to have on the table even if you’re current on payments. A consultation with our Northbrook bankruptcy lawyers can help you figure out whether bankruptcy is the solution to your problems. Contact us today!