When should I file bankruptcy?

First of all, I want to clearly state that bankruptcy is not something to aspire to achieve. Almost no one wants to file a Chapter 7 or a Chapter 13 and get a discharge of debts. Nearly everyone I talk to would rather have the means with which to pay their creditors. So, if you are reading this post, you have likely already tried everything you can think of to make things work and you are considering bankruptcy as a last resort. I can appreciate that. And I know that also means many of you have already gone past the point where wisdom would have you go. And that is why I hope to lay out some general principles as to when one should file bankruptcy. Everyone’s situation has its own unique twists and turns, so you should find a lawyer who will provide a free consultation to see if it is time for you to file.

If a creditor has filed a lawsuit against you to collect a debt because you have not had the means to pay it, then you likely should file.

If the only way you can pay all your bills next month is to take a loan out from your retirement account, you likely should file.

If your house has been sold at a foreclosure auction, you likely should file.

If your car has been repossessed and sold at auction for less than you owed on it, you likely should file.

If you are seriously considering utilizing a payday loan provider in order to stay afloat, you likely should file.

If you feel crushed by debt and you do not see an end in sight unless you win the lottery, you likely should file.

If your employer notified you that they just received a wage garnishment order, you likely should file.

The main thing is to not wait until you are right up against the wall. It takes time to properly assess a persons financial situation and make sure that a petition and schedules are accurately completed. This means that you have to pull together a lot of documents in a very short period of time. It is far better to seek counsel when the crisis is still off in the future a bit.