Filing for bankruptcy is a difficult decision and one that shouldn’t be taken lightly. Bankruptcy is a legal process that can help individuals and businesses manage their debts, but it can also have a long-term effect on their financial situations. In the guide below, take a look at why you might consider filing and whether you qualify.

What Are Some Reasons to File for Bankruptcy? There are several reasons why someone may decide to file for bankruptcy. One of the most common is financial hardship, such as unemployment or a medical emergency. Filing for bankruptcy can give someone a fresh start, allowing them to restructure their financial obligations so that they can better manage them.

Another reason for filing is to protect assets from creditors; filing for bankruptcy can prevent creditors from taking certain types of property, such as a home or a car. Additionally, filing for bankruptcy can stop collection activity, giving someone a chance to catch up on their payments without the fear of harassment or legal action.

Finally, it can help those with unmanageable debt to lower the total amount they owe. This can be done through a variety of methods, such as debt consolidation, or through a debt settlement.

How Can You Tell If You Qualify? To file for bankruptcy, an individual or business must meet certain criteria. Generally, individuals must have a regular income, owe more than their assets are worth, and be unable to pay their debts. Businesses must also meet certain criteria, such as having a legitimate business purpose, being insolvent, and being unable to pay their debts. Bankruptcy also requires individuals and businesses to disclose all of their assets and liabilities. In addition, individuals must complete a credit counseling course and a financial management course before filing for bankruptcy.

If you’re thinking of filing for bankruptcy, the helpful staff at We The People of NY are ready to help you ensure your documentation is ready. For over 25 years, this legal service has helped New York residents achieve the most favorable outcomes from situations of all kinds, including major financial planning efforts, divorce, and more. Call (212) 633-2200 to schedule an appointment today, and visit them online to learn more.