When Should I File For Bankruptcy?

Generally speaking, one should file for bankruptcy only when they have excessive debt and no other means of paying it off. But it’s a bit more complicated than that. For one thing, you have to consider what types of debt you have—if you have mostly credit card debt, then you may be able to get most of it discharged in a bankruptcy. If your debts are secured by your home or some other asset, you can file bankruptcy to protect them, although you also risk losing them to creditors in the process.

Is There A Minimum Debt Required?

You don’t have to meet a certain amount of debt to be able to file bankruptcy. It’s more a matter of your ability to pay them off in a reasonable time frame. For example, if you have the means but just need more time to get back on your feet, you may qualify for a repayment plan under Chapter 13 bankruptcy. If you’ve lost your job and don’t have any cash reserves to fall back on, liquidating some of your assets under a Chapter 7 bankruptcy may be your best bet.

How Do I Know If It’s A Good Time?

Your best bet is to consult a bankruptcy attorney, even if you’re not sure that bankruptcy is your only choice. The best attorneys can help you find other possible solutions, such as debt settlement and debt consolidation, and even refer you to colleagues who can help out. Talk to a lawyer as early as possible, as your options run out the longer you wait to file.