Personal bankruptcy — is it your best option?

For some people, the monthly bills seem to accumulate slowly over time. For others, several unexpected expenses seem to hit all at once. No matter the reason a person finds him or herself so deeply in debt that it seems impossible to get out, bankruptcy can potentially be a viable option. But how can a person in Connecticut figure out whether personal bankruptcy is the right decision? Here are a few things to consider.

Depending on where a person’s income falls in relation the state’s average, he or she will have to file for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is for those who earn less than the state’s average income and can discharge most debts in as little as six months, but filers may have to give up some of their personal property. Those who earn more than the average can file for Chapter 13 and will have to create a repayment plan (for court approval) that lasts anywhere from three to five years, after which any remaining debts will be discharged. People can generally keep most of their personal property when pursuing Chapter 13.

Once a person understands which form of bankruptcy fits, he or she should look at whether the outstanding debts are eligible. Debts like alimony, child support and some tax debts cannot be forgiven through bankruptcy. If the majority of a person’s debt cannot be addressed through bankruptcy, then it might be time to look at alternatives.

Filing for personal bankruptcy can also leave co-signers on the hook for some of that debt, so it is important to consider this and other extenuating factors that go into making this decision. However, accounting for everything is difficult, especially when it comes to a complicated topic like filing for bankruptcy in Connecticut. However, most people can come to a decision regarding bankruptcy by speaking with an experienced attorney about their options.