Many people find themselves struggling with debt or bills at some point in their lives. How to know when you should seek legal aid? It is not always easy to gauge just when you need to hit the brakes on your current financial situation and take time out of your busy life to consult a bankruptcy lawyer. At Groce & DeArmon, P.C., we have seen all the mistakes out there when it comes to seeking legal aid too late, and we can help you read the warning signs on the wall.
Remember, consulting legal aid does not contractually bind you to file bankruptcy. You can spend your consultation discovering what type of bankruptcy could work for you. You can also discuss the warning signs of serious debt that can lead to filing.
What Kind of Debt Leads to Bankruptcy?
It’s important to understand what kind of debt bankruptcy can help you with. There is a common myth out there that bankruptcy will wipe clean any and all debt. Sadly, this is not true. If you consult any bankruptcy attorneys, they will tell you that two different types of debt exist: secured and unsecured. Even if you don’t know what these are, you probably have both.
The court considers any debt secured when a creditor can reclaim an item in order to recuperate some of what the debtor owes them. Your car loan and mortgage are typically secured debts because the bank can repossess your car or foreclose on your home. The sale of the car or home helps to repay your debt. Filing bankruptcy does not eliminate secured debt, though it helps you keep up with payments by eliminating unsecured debt. Unsecured debt, like credit card debt, is any debt that cannot be repaid by the repossession and sale of any object.
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So When Should You Start Talking to Legal Aid?
When you believe your debt is becoming a problem, you should seek out some help. This does not mean that you wait until you are two months behind on your mortgage and car payments. Though two months behind is better timing than four months behind, you should seek legal aid when you foresee your debt becoming a problem in the near future. Will your income decrease in the coming months? Will you soon have to choose between your car payment and your credit card payment? Sadly, bankruptcy cannot yet help relieve student loan debt, but reducing other debts can free cash for those big three: your home, your car, or your student loans.
Better Safe Than Sorry
If you are unsure of whether you should get legal aid, contact Groce & DeArmon. With our free initial consultation, you have nothing to lose! We will help you navigate any potential debt dangers ahead by laying out what a bankruptcy can or cannot do for you.