How Do I Know When It’s Time to File for Bankruptcy?

Filing for BankruptcyFiling bankruptcy is scary, difficult and not fun. But when it’s time to file, it’s time to file. Ask yourself a few simple questions. First, do you feel out of control regarding your finances? Is this causing you stress and discomfort, or affecting your family, relationships, or work? If the answer is yes, you may need to file bankruptcy. Next, ask yourself if your debt is steadily increasing, rather than decreasing, each month. Are you making minimum payments on your credit cards, because your income is stretched to its limit, but not seeing any significant reduction in balances owed? If so, then you may need to file bankruptcy. Also, ask yourself if creditors are calling you at home or work? Are you being sued for debts you simply cannot pay? If so, then you may need to file bankruptcy.

Bankruptcy means different things to different people: failure, hopelessness, and even a sense of “wrongness”. However, it also can be an OPPORTUNITY to turn your life around and prepare a better financial future for you and your family. Answering these additional questions also may help you decide if now is the time to file for bankruptcy:
1) Will you resolve all your outstanding short-term debt (not a mortgage or student loans) in the next five years?
2) Do you owe more than you are worth? To determine your worth, add up the value of all your property, including your home equity, vehicle equity, financial accounts, savings, and any other valuable property.
3) Are you prepared to live without credit for a short time (usually 2-3 years)?
4) Are you just D-O-N-E with the merry-go-round of credit cards, collections, and debt and want to take control of your situation?
5) Is your income declining, or have you experienced a drop in income over the last few years?

If you answered “No” to the first question and “Yes” to the last four questions, at least take time to learn what filing for bankruptcy really means, and how it can change your life and provide a better and more secure financial future for you and your family. The consultation is always free, and it doesn’t hurt to think about whether it’s time to file for bankruptcy.

Leticia “Letty” Martinez Evans,
Managing Bankruptcy Attorney, Bailey & Galyen