Chapter 7, Chapter 13
State Action 128
Attorney Paul Strouse - Debt Relief, Asset Protection, Debt Restructuring

When Should a Person File Bankruptcy?

Deciding whether or when to file bankruptcy requires significant thought. A person needs to look at where they are in life in regards to work/income, age, family status, cash reserves, retirement goals and other factors. If a person is looking at unconquerable debts, bankruptcy may be the only solution.

Unsecured (credit card) debts are frequently the target of bankruptcies. Many times people get in financial trouble through excessive balances on their cards. When a person is deciding whether to pursue bankruptcy to wipe out debt, this could be coupled with an investment strategy for a person to redirect funds that would have been used for debt repayment to fund a retirement account. Or, if a person feels that they cannot afford important educational, family or other important expenses without debt relief, bankruptcy cold be the solution.

Filing bankruptcy is a tough and emotional decision. However, when a person is backed into a corner because of insurmountable debts, he or she may need to choose a bankruptcy plan that either eliminates debt or restructures it into affordable payments. It all depends on what assets a person has and what his or her goals are.

Outside of filing bankruptcy, a person could contact a consumer credit counselor (CCC) to try and restructure and/or renegotiate debts. This would include making a monthly budget. The counselor could get a person's interest rates reduced in order to help make payments more realistic.