Should I File Bankruptcy? When Should You File?

This is a common question and it’s a question that you’ve probably typed into Google searching for an answer. Someone to help you decide whether or not you should file bankruptcy. Frankly, the answer is probably yes because something prompted you to do that search whether it was creditors calling and harassing you, a lawsuit, a wage garnishment, a judgement, something caused you to search Google, Is bankruptcy the right answer? Should I file bankruptcy? All of these things are very good reason to file a bankruptcy. So that’s why I say the answer is probably yes. Creditors calling is probably the most common scenario. The purpose of their call is nothing important other than to harass you for money.

They don’t have any news or program or anything like that. Their job is to just try and collect any money that you may have at the moment. It’s not a pleasant scenario and frankly it’s not something that you want to deal with long-term. If you are not able to make a meaningful payment to reduce debt substantially each month other than making minimum payments, bankruptcy is probably a very good option to consider. There are some exceptions of course, if you are expecting a windfall or you are expecting a large bonus or a new job with a substantial increase in the salary, maybe put up with creditor calls and put off filing bankruptcy.

But for most people if you’ve gotten to the point where you’ve got collection agencies chasing after you, your phone is blowing up constantly and potential lawsuits and wage garnishments and all the other nasty things that creditors can do, those are very good reasons to file a bankruptcy and yes you should file bankruptcy. The biggest objection to bankruptcy or what makes people hesitate is “Is it going to damage my credit?” If it’s gotten to the point where the creditors are calling you and you’ve got collection agencies on your back, lawsuits, judgments, those sort of things, your credit has already been damaged significantly and substantially. Bankruptcy is not going to fundamentally change anything. In fact, it will probably improve your credit score because before the bankruptcy you have damaged credit and all this debt outstanding, unpaid, late on your credit report.

However, after filing bankruptcy all that debt goes away and now you have zero balances. It’s all included in bankruptcy so the one bad thing or the only bad thing is the bankruptcy itself. Other than that you have no other debt on your credit report which is going to give you a much stronger ability to rebuild your credit score faster and much more effectively than if you just continued struggling with the debt, month after month, year after year. So yes, bankruptcy is a great way to get a fresh start, get out of debt, eliminate that debt and get rid of creditors. I’m always in favor of a fresh start. Unless there is a very clear path to getting out of debt, bankruptcy is usually a great option.

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