When Should I File Bankruptcy?

Making the decision to file for bankruptcy is never an easy one. It certainly wasn’t for me when I filed. But taking that first step can be just what you need to free yourself from overwhelming debt and get a fresh financial start. One of the biggest reasons behind these fears has to do with the countless myths that surround bankruptcy. Trust me when I say as a bankruptcy attorney, I have heard them all. The problem is these lies, and misconceptions only delay you from getting the help you so desperately need.

I have a TV commercial that says, If you OWE more than you MAKE, you may already be bankrupt. Okay I know that sounds pretty dramatic but it makes sense. If you, like I did, are spending more that you make, and you cannot keep up with the monthly bills, then it is time to talk to a Bankruptcy Attorney. There are also a ton of people that are able to make their minimum payments and are just getting by, sometimes getting an Amscot pay advance loan, borrowing money from mom or dad, or worse of all, pulling money from their 401k to make ends meet. STOP. I recently had a client that came in and thought that they could not file bankruptcy because they had a 401k with $250,000. I told them yes you can file and I can protect every dollar of their retirement!

Many times, the key is knowing when to file for bankruptcy. Timing comes into play in numerous aspects of bankruptcy planning. Fortunately, we can help you with that decision by taking a quick review of your current financial situation. A good rule of thumb is if you can answer yes to several the following questions you should consider filing for bankruptcy:

  • Are you only able to make the minimum payments on your credit cards?
  • Are you using credit cards to pay for daily living expenses?
  • Are your credit cards maxed out?
  • Are your wages being garnished?
  • Are you on the verge of losing your home?
  • Are you fielding multiple calls a day from debt collectors?
  • Are you being sued by your creditors?
  • Are you unsure how much you actually owe?

Another tip to keep in mind is if you owe more than you can afford to pay, bankruptcy may be right for you. To determine this, inventory all of your liquid assets, bank accounts, retirement funds, investments, real estate, vehicles, and any other assets you have. Next, take all of your bills and debt statements and add these to get a total amount of debt you owe. If what you owe ends up being more than what you own, bankruptcy may be the best choice for you.

Additionally, if most of your debts are unsecured debts, meaning an asset is not connected to the debt as collateral, bankruptcy can be an excellent option to eliminate these debts. Commonly discharged unsecured debts include credit card debt, medical bills, and personal loans. If you are struggling with these types of debts, you are likely only making the minimum payments each month. Ultimately, you are only paying interest on what is owed and never truly making progress on paying down the principal. It can be an endless cycle, one that is very difficult to escape without help.

Filing for bankruptcy is no longer a stigma.  The age-old stigma that bankruptcy is a bad thing and only for the financial irresponsible is no longer.  If you have questions on this topic or are struggling with debt, call our law firm today to schedule a free consultation. Having debt makes you stay up at night. It stresses you out. It ruins relationships. I went through it. I found the courage to call a bankruptcy attorney and I pressed the restart button in 2008. I never forgot what it did for me and how it helped me start over.

So to summarize the answer to When should I file bankruptcy?

The answer is as soon as you feel bankruptcy may improve your situation and you want to learn all the alternatives of bankruptcy and want to know what will happen if you file bankruptcy. Sometimes, the last option is the best option.

To date, The Benenati Law Firm  has eliminated nearly a billion dollars of debt for its bankruptcy clients. Our firm is the largest filer of consumer bankruptcy cases in the nation. Go to https://www.407bankrupt.com/ or call 407-777-7777 to set up a free private consultation. Because Life Has a Restart Button.