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In 2018, the American household debt hit an all-time high of <\/span>13.21 trillion dollars<\/span><\/a>.\u00a0<\/span><\/p>\n It\u2019s no wonder so many people find themselves in financial hardship, struggling to pay off the overwhelming amount of debt they have accumulated. Fortunately, those who are drowning in debt can give themselves a second chance at a successful financial future by filing for bankruptcy.\u00a0<\/span><\/p>\n While filing for bankruptcy is an option, it\u2019s not a decision to take lightly as there are <\/span>pros and cons<\/span><\/a> for filing. If you are considering bankruptcy but are not sure it\u2019s the right one for you, read on for a guide on when to file bankruptcy.<\/span><\/p>\n What Is Personal Bankruptcy?<\/strong><\/p>\n Personal Bankruptcy<\/span><\/a> is an option for when you have too much debt and cannot meet your obligations to your creditors.\u00a0<\/span><\/p>\n There are two types of personal bankruptcy you can file:<\/span><\/p>\n Chapter 7:<\/b> you will use your liquid assets to pay what you can and the rest of your debt is discharged. This type of bankruptcy stays on your credit for 10 years.\u00a0<\/span><\/p>\n Chapter 13:<\/b> you agree to pay some debt by following a 3-5 year repayment plan. After you have completed the repayment plan, any remaining debt is discharged. This type of bankruptcy stays on your credit for 7 years.\u00a0<\/span><\/p>\n Filing bankruptcy will impact your financial standing and your borrowing abilities for many years so it\u2019s important to file only if necessary. Here are 8 reasons why filing may be the best choice for you.\u00a0<\/span><\/p>\n You Cannot Catch Up On Your Bills<\/strong><\/p>\n Skipping a payment every so often is one thing but if you cannot seem to catch up on your bills, you are dealing with financial hardship. If you are not able to pay your bills or keep up with payment arrangements, you will be faced with late fees, shut off notices and collection calls.\u00a0<\/span><\/p>\n Filing bankruptcy will put you back on track so you don\u2019t have to live in fear of the essentials, like utilities, being shut off at any moment.\u00a0<\/span><\/p>\n You Can\u2019t Afford Minimum Payments<\/strong><\/p>\n One sign of when to consider bankruptcy is if all of your cards are maxed out and you cannot afford to pay the minimum payments. By missing the minimum payments, you are putting yourself in a deeper hole that will harm your credit, which affects your financial future.\u00a0<\/span><\/p>\n Filing for bankruptcy will take care of all of those bills so you can move forward and start rebuilding your financial life.<\/span><\/p>\n You\u2019re Getting Daily Calls From Collection Agencies<\/strong><\/p>\n If your phone won\u2019t stop ringing from all the calls from your creditors, it may be time for a change. Once your financial situation gets to the point where you are being hounded by collection agencies, you may find it is too deep a hole to climb out of.\u00a0<\/span><\/p>\n