The decision to file for bankruptcy does not often come easily. Someone in South Carolina may wait until all other options are exhausted, such as when the house is in foreclosure or his or her family is ready to fall apart, before realizing the benefits of bankruptcy. While everyone’s situation is different, there are some signs that may help a person decide it may be time to consider whether Chapter 7 or Chapter 13 debt relief is the best option.

Senior citizens who have considerable debt may have no resources to pay it down. Pensions or other income may disqualify a senior from bankruptcy, but if someone has no income or very little, he or she may find help through bankruptcy. Seniors and others may have debt that is primarily medical bills. In fact, 78 percent of those who seek bankruptcy protection do so because of medical expenses. Medical debt is fast replacing credit card debt as the most common debt burden.

If a divorce left two former spouses sharing debt responsibilities, one may be surprised when the other spouse declares bankruptcy. This may be another indicator that both ex-partners are ready for bankruptcy protection. In fact, a former spouse who files for bankruptcy may have his or her debts discharged, and the other spouse could be held liable for debts in the names of both individuals. Both former spouses may wish to consider filing for bankruptcy jointly to avoid this situation.

Having unmanageable debt and little or no income is a common reason why people seek Chapter 7 or Chapter 13 protection. While many in South Carolina worry about what a bankruptcy will do to their credit, continuing in a pattern of late payments and overextended credit may already be damaging one’s score. Discussing the options for debt relief with an attorney may be the first step to a fresh financial start.

Source: gobankingrates.com, “When to File for Bankruptcy”, Morgan Quinn, Accessed on Feb. 24, 2017