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How do I know if it's time to file for bankruptcy?

If you are struggling to pay your bills, your head may be swimming with potential solutions to your insolvency problem. It's a good idea to try to resolve your debt delinquencies. However, "solutions" can cost you money and offer very few real routes out of debt.

What's a debtor to do? People with mounting bills often take on extra jobs to cover their debts, but there are only so many hours in a day that a human being can work. Often what they earn pushing themselves to the limit is not worth the stress and strain on their bodies and personal relationships.

Budgeting and belt-tightening are also recommended. Go over your finances with a fine-tooth comb and see where you are bleeding money. Cut the cable, the food deliveries and any subscription services until you are once again in the black on your financial ledger.

If you still can't see the light at the end of your financial tunnel, you may need to evaluate another option -- filing for bankruptcy.

Higher-wage earners will not typically pass the Means Test for filing a Chapter 7 liquidation bankruptcy. Often, their best option is filing for Chapter 13 debt reorganization. This gives debtors much-needed breathing room to pay off their debts over a three- or five-year period.

Then, at the end of that period, if they have held up their end of the court-ordered repayment program, the remaining debts are usually discharged by the bankruptcy court.

Debtors will also have to receive credit counseling. The information they glean from these sessions can help them avoid getting into serious financial jams in the future. Speak to a Tampa bankruptcy law attorney if you believe a Chapter 13 bankruptcy could be beneficial.

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