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 February 16, 2016 |

There’s no doubt that many Americans are struggling with paying their bills, and Louisianians are no exception.

Sometimes events outside of your control, such as a catastrophic illness or accident that racks up heavy medical debt, are the root cause of your insolvency. A lost job can land families in hot water with creditors, too. But often the origin is far less dramatic and stems from a pattern of overspending over time that results in a crushing debt load.

Regardless of the reason, if you are at your wit’s end with struggling to meet your financial obligations, something has to give. Depending on the depth of the problem, sometimes some serious belt-tightening and credit counseling can get you back on track. Often creditors will agree to settle accounts for a fraction of what is owed if the consumer requests this option.

But other times, the debt load is just too massive for quick fixes. That’s when you know it might be time to file for bankruptcy.

In order to determine how far down the mountain of debt you have already slid, you must realistically assess your financial picture. Add up all sources of income in one column and all fixed expenses in another. In a third, write down your variable expenses, no matter how insignificant.

Now you are ready to track spending patterns and establish financial priorities. You can see how those daily Starbucks coffees actually add up to a lot of cash. You might realize that taking the dog to the groomers twice a month is unnecessary when he can get a bath right at home. Keep your priorities in mind.

Adding it all up gives you a fair assessment of where you stand. You can still try to negotiate with creditors, but ultimately if you are hanging by a financial filament, bankruptcy proceedings may be the best option for you at this juncture.

A bankruptcy attorney can help you decide whether filing for Chapter 7, Chapter 11 or Chapter 13 would be the best course in your circumstances.

Source: Federal Trade Commission, “Coping with Debt,” accessed Feb. 19, 2016

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