Sometimes I get asked, “How can I know if it is a good idea to file for bankruptcy? The first thing I tell them is that bankruptcy isn’t for everyone, but there are some circumstances where bankruptcy does make sense. I’ve known people who have chosen to file bankruptcy for the following reasons:
They’ve recently been through a divorce and their ex-spouse has decided to file for bankruptcy. Now the creditors are coming after them, making unreasonable demands for payment and there is no way they can meet the creditor’s demands.
They’ve had health problems and the hospital bills have piled up into an insurmountable mountain, but health insurance won’t cover the bills.
Their wages are being garnished and because of this, they can no longer afford to make ends meet.
Here is a list of situations where it would be a good idea to discuss your situation with a bankruptcy attorney:
- Your debt is more than your annual salary, not including house and car debts.
- You have to buy basic items like food, clothes, gas, etc. on credit.
- Your medical bills total over $5,000.
- Your debt payments are more than 25% of your take-home pay.
- Your wages are being garnished.
- Your house is being foreclosed.
- Your debts continue to increase every month.
- You are considering getting a loan to pay debt.
- You are often late on your payments.
If you are facing any of the above situations, it is a good idea for you talk to an experienced bankruptcy attorney. It is always smart to know your options.
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