Many of our clients approach us asking questions like, “Should I file for bankruptcy?”, “What are good reasons to file for bankruptcy?”, and even “Is bankruptcy bad?”
Here at A People’s Choice, we are not attorneys. Therefore, we cannot provide any type of legal advice nor do we prepare bankruptcy documents. However, we can answer some of our clients FAQs and address their concerns about bankruptcy.
Q: Should I File Bankruptcy?
A: There are many reasons to file for bankruptcy; however, the decision to file is an extremely personal one. Remember that no one else is living your life or experiencing your stress. Although there are certainly some legal concerns that come into play when considering filing bankruptcy, the decision is up to you.
Q: What are Reasons to File?
A: When an individual files for bankruptcy, there is no set amount of debt they need to have incurred. Believe it or not, some people file for bankruptcy for as little as $5,000. This may seem a small amount of money to some, but to others the pressures of $5,000 in debt are just as debilitating as $50,000. In this way, filing bankruptcy is a largely personal decision.
Individuals must evaluate their entire financial situation when assessing their reasons to file bankruptcy. In fact, once an individual files a Chapter 7 bankruptcy, they will not be able to file again for eight years. Therefore, consider all possibilities and future financial situations when making this decision.
Questions to ask yourself before filing:
- Do I pay more than the minimum requirement on bills?
- Is my debt increasing due to accruing interest, even with minimum payments?
- Do I foresee myself paying off my debt within the next five years?
- Am I employed and making a stable income?
- Has a recent life situation, such as a divorce or an injury, seriously affected my finances?
- Is my financial situation affecting my health and family life?
- Do I expect to file bankruptcy in the future?
- Am I concerned about the ramifications to my credit?
- Will my debts “go away” if I file bankruptcy?
- Will all my property be “protected” if I file bankruptcy?
- Does filing bankruptcy affect my reputation in any way?
- Do I have any other realistic options to resolve the debt?
- Am I eligible to file?
If you are considering filing bankruptcy, take the time to think it through. Your pros and cons of filing may be completely different from those of a neighbor or friend. Examine all options and seek out the opinions of family members and friends who will offer a listening ear and another perspective.
Q: Is Filing Bankruptcy Bad?
A: Remember, there is life after bankruptcy, and you can re-establish your credit over time – and yes, even buy a house. The stigma of filing bankruptcy is not so important. Instead of worrying what others will think, focus on what lessons you learned throughout the process, and how you will handle your finances in the future.