If your credit cards have hit their maximum limit, and late fees and interest charges are making your credit card debt soar, you may be considering filing for bankruptcy. But before you take such drastic measures, it’s a good idea to make sure that’s the right solution for you.

Bankruptcy is a significant decision and one that can have an impact that lasts for years. There are three distinct signs that conventional wisdom says you can use as benchmarks to guide your decision, and we’ll review those below. But the smartest step to take, even if all of these signs are present – is to talk to an experienced bankruptcy attorney who can make sure you understand the ramifications of this decision, as well as the other options available to you.

If you’re considering filing for bankruptcy as a result of out-of-control credit card debt, you should ask yourself the following three questions:

1. Am I able to pay back the debt, or is it just going to be hard?

If you are able to pay off your credit card, then there’s a good chance you won’t qualify for a Chapter 7 bankruptcy. The bankruptcy court may steer you towards a repayment plan under Chapter 13, which will not eliminate your debt and does little to help. In fact, if you have enough money for a Chapter 13 repayment, you may be able to negotiate directly with your creditor, and they may even lower your debt or interest rate.

2. Am I getting harassing phone calls from bill collectors or notifications that I’m getting sued?

Bill collectors’ calls are often the last straw for people who are struggling with credit card debt – it’s what drives them to seek bankruptcy relief, just to stop the harassment.

3. Do I have nonexempt property that the people I owe money to can force me to sell if I file for bankruptcy?

When you own nonexempt assets and file for Chapter 7 bankruptcy, the administrator of your case can sell them to pay back the people to whom you owe money. Chapter 13 bankruptcy is handled differently, and lets you keep your property, but you have to pay the credit card companies back in an amount that is equal in value to the assets that you were able to hold on to.

One thing’s for sure – if you’re considering filing for bankruptcy you should stop making charges on your credit cards, and you might want to stop making payments too. For advice on your best course of action, contact the bankruptcy lawyers at Reinherz Law today.