Why should I file for bankruptcy?

bankruptcyIf you are like most people, filing for bankruptcy is something you do not want to do. You take your obligations seriously. However, many people, through little or no fault of their own, find that they have simply run out of options. If you are considering filing, you probably find yourself able to relate to several of the reasons listed here.

  • If you are like most people, you have already attempted to negotiate a repayment plan without success.
  • You have more money going out than coming in, and this will most likely continue for some time. Even simply trying to service the debt is financially impossible. If you are in this situation, the longer you hesitate, the deeper the hole will become.
  • You have worked hard to put money aside for retirement (savings, 401 (k), IRA, or pensions), and you are afraid you will lose it.
  • Continuing harassment from bill collectors is ruining your life. Every time the telephone rings you get a sick feeling and look to see who is calling.
  • Due to the loss of your job or an illness, your have little to no income, yet the bills keep piling up.
  • As hard as you look, you see no other way out.

There are many contributing factors that may influence your decision. These include:

  • Your age. The older you are, the less likely you will be able to make up lost income or fully recover from illness. Additionally, the nearer you are to retirement, the less you can afford to sacrifice your savings.
  • The number of people depending on you. If you have many people in your household or your family, it may be in their best interests for you to be able to make a fresh start.
  • Your debt may just be too large to overcome. Although this may seem obvious, the more you owe, the less likely it is that you can forge a path out of your debt.
  • If you have already tapped into your savings or retirement in an attempt to pay off the debt, STOP! Continuing to dip into this money will only make things more difficult for you and your family in the future.
  • If a significant portion of your debt is non-dischargeable, i.e., you will still owe it after bankruptcy, you need to eliminate as much dischargeable debt as you can so you may continue to meet these obligations. Non-dischargeable debts may include:
    • Child support and alimony
    • Student loans
    • Criminal fines, penalties and restitution
    • Certain tax obligations

If you find yourself at the end of your rope, let us give you a hand.