When is bankruptcy a good idea

Bankruptcy should not be approached casually. After all, it’s not a simple, easy cure-all for out-of-control spending.  Bankruptcy used in the right way at the right time can save you money, preserve your peace of mind and get you back on your feet financially. So when is bankruptcy a good idea?

I ask my clients to do a little self-analysis if they feel like they are in financial danger.

Here are a few questions to ask yourself:

  • Are you unsure how much you actually owe?
  • Do you only make minimum payments on your credit cards?
  • Does the thought of sorting out your finances make you feel scared or out of control?
  • Do you use credit cards to pay for necessities?
  • Are you considering debt consolidation?
  • Are debt collectors calling you and/or your family?

Next honestly look at your financial situation:

If you answered yes to two or more of the questions above, you at least want to give your financial situation a little more thought. Simply put, bankruptcy is when you owe more than you can afford to pay.

To determine where you are financially, inventory all of your assets. Don’t forget to include retirement funds, stocks, bonds, real estate, vehicles, college savings accounts, and other non-bank account funds. Add up a rough estimate for each item.

Then, collect and add up your bills and credit statements. If the value of your assets is less than the amount of debt you owe, declaring bankruptcy may be one way out of a sticky financial situation.

Declaring bankruptcy can be expensive, time consuming, and may have other financial consequnces.    This, in turn, can have far-ranging effects on other aspects of your life, such as buying a new car or home, or even applying for jobs. Also, waiting to declare bankruptcy until you are completely broke can actually work against you. When you file for bankruptcy, the court will look not only at your current income, but also your income over at least the past six months. If you’re currently having a financial problem, but have historically paid your bills on time, consider waiting a few months to see if or by how much you can improve your situation.

Working with an experienced attorney can help you determine when bankruptcy is a good idea.  In Utah the Law Office of Douglas Barrett,  LLC offers free consultations in consumer bankruptcy cases.  Call today at 801-221-9911.

Leave a Comment





Utah County Backruptcy Attorney Services

Bankruptcy discharge paperwork
Utah Homestead Exemption Law
Is bankruptcy the only option?
Bankruptcy with medical bills
https://utahbankruptcyguy.com/are-bankruptcy-cases-public-record/