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3 signs you should consider bankruptcy

If you live in Lexington and have found yourself struggling with debt, you are not alone. In fact, you probably know a friend, neighbor or relative that has had trouble managing debt and maybe even declared bankruptcy. While the term "bankruptcy" tends to carry many negative connotations, in reality, bankruptcy is a very effective tool for reorganizing your debt and getting your finances in order. Not only that, but it could help you avoid foreclosure on your home or possibly save your car from repossession.

For some people, the signs that it is time to file for bankruptcy might be obvious. For instance, a stack of overdue payment notices and threats of repossession or foreclosure might lead them to begin the process. For others, it may not be so obvious. If you are wondering if you should declare bankruptcy, here are some signs you should look for.

No income and a lot of debt

If you have very little to no income along with a lot of debt and you are a senior citizen, it is probably time to file for bankruptcy. However, you will still have to pass an income test in order to qualify. If the pension you receive is too high, you might have to explore other debt relief options.

Unpaid medical bills

If you have health insurance and it is not covering your medical expenses and you cannot pay the bills, then bankruptcy might be right for you. While bankruptcy might be able to eliminate your medical bills, it will only apply to old debts. In other words, any medical expenses you incur after starting the bankruptcy process will not be eligible for discharge.

Overwhelming credit card debt

If you are only managing to pay to minimum on your credit cards and you are using them for necessities like grocery shopping due to a lack of available cash, it is probably time to take a hard look at bankruptcy. Before you do this, take a full inventory of all of your bank accounts and any other assets. Then, compare this to your total debt. If the debt is more than your assets, bankruptcy is probably the right decision.

If any of the above apply to your situation, then you should consider your debt relief options. If you choose to file for bankruptcy, be sure to follow Kentucky's requirements so that you can complete the process as smoothly as possible.

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