Why Should I File for Bankruptcy?

If you are like most people, filing for bankruptcy is something you never thought you would do. You take your obligations seriously. However, sometimes bad things happen to good people, and you find that you have run out of other options. If you are considering filing, you probably find yourself relating to the following:

  • You have attempted to negotiate different payment terms with your creditors (Mortgage Co. Credit and IRS/DOR etc.) without success.
  • You have tried to pay your bills through a debt consolidation program and realized you are making little to no progress.
  • You are struggling to pay child support and/or alimony because there are simply too many other bills.
  • You have more money going out than coming in.
  • You can no longer meet all the minimum monthly payments on your credit cards.
  • You have worked hard to put money aside for retirement (savings, 401 (k), IRA, or pensions), and you are afraid you will lose it, or worse you have no money saved for retirement.
  • Harassment from bill collectors is stressing you out and home and work.

  • The IRS, DOR or other creditors are suing you or threatening to put a lien on your assets, attach your wages or shut down your business.

Other contributing factors that may influence your decision:

  • Your age. The older you are, the less likely you will be able to make up lost income or fully recover from financial setbacks due to illness. Additionally, the older you are, the less time you have to save for retirement when all your money is just servicing debt.
  • 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 put it back in a timely manner without further damaging your credit.
  • You have already tapped into your savings or retirement in an attempt to pay off debt, STOP! Continuing to dip into this money will only make things more difficult for you and your family in the future. Most retirement accounts are fully protected in bankruptcy.
  • 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 include:
    • Domestic support obligations;
    • Student loans;
    • Criminal fines, penalties, and restitution;
    • Most tax obligations.

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