“Should I File Bankruptcy?” 7 Tips to Help You Make the Decision

Filing for bankruptcy is not exactly the type of lunch break conversation you want to have with your colleagues, and for good reason. It is a measure of last resort that reveals to the whole world that you are so far deep in debt, even the bank is suing you. If you do not have a contingency plan, it will destroy your credit and debilitate your borrowing ability. If you are wondering whether or not to file for bankruptcy, here are a few tips to help you make the decision. 

  1. Negotiate with your creditors 

Creditors are always willing to negotiate a settlement rather than have the debt discharged in bankruptcy. This is especially true if you have already missed a few months’ payments and the creditor stands to lose a lot of money if you file for bankruptcy. 

  1. Seek Credit Counseling

A consumer credit counselor can come in handy if you are unsuccessful in negotiating with your creditors. Oftentimes credit counselors can be able to get you reduced monthly payments and interest rates. Chapter 7 bankruptcy law actually mandates 6 months of credit counseling before filing for bankruptcy, so it is just as well to use it as a bankruptcy alternative. 

  1. Consider your wages 

Sometimes creditors may get judgements against you and have your wages garnished. In this case, it would be a good idea to file for bankruptcy in order to stop the wage garnishment and possibly get back some of the garnished money. 

  1. Consider your medical bills

A good percentage of bankruptcy is actually caused by medical bills. When medical costs become exceedingly more than you can afford, you may have to file for bankruptcy to avoid losing your assets. Filing for bankruptcy can get the bills completely discharged, or help you negotiate a repayment plan. 

  1. Consider your assets

If your debt is more than the value of your assets, you may need to file for bankruptcy. This also applies to assets that are tied up to a loan, for example a car or a house. Filing for bankruptcy will keep you from losing these assets. 

  1. Consider your savings 

Unlike certain public benefits, child and spousal support, and other similar assets, general savings are not protected. If you don’t have any savings that can be used to repay your debt, you might have to file for bankruptcy. 

  1. Consider your case

If you have been served with a court summons, you should consult your attorney. It is ill-advised to ignore the summons, as this means that the plaintiff will get a default judgment and probably obtain permission to seize some of your assets or garnish your wages. 

The decision to file for bankruptcy requires putting several factors into consideration. An experienced attorney can help you learn what your options are and whether filing for bankruptcy is the best solution. For any assistance, feel free to contact us anytime.