Should I file Bankruptcy?

“Should I file for Bankruptcy?” or “What would you do if you were me?” are two of the most common questions I get. They are also two questions I will never answer. Why? Well because I’m not you. The decision to file a bankruptcy case is not a decision that should be answered by your lawyer. After all, it’s in the bankruptcy attorney’s best interest for you to file the case.

There is another more important reason I don’t answer the “should I file” question. Bankruptcy is a personal decision. I don’t know your background, your state of mind, or any number of other things about you that could influence my decision. However, I won’t leave you completely in the cold on this question. There are a few tell-tale signs that you should strongly consider filing a bankruptcy case.

If you are being sued by a creditor and know that you have no ability to make payment arrangements or settle the suit, then it’s just a matter of time before the creditor get’s a judgment against you. The judgment will lead to a lien which then often leads to your wages being garnished. In Georgia, the creditor can take 25 percent of your take home pay with a wage garnishment. Most people can’t afford to lose this much money every month. In Georgia, short of settling with the creditor, bankruptcy is about the only option that will give you relief from the garnishment.

If you find yourself under stress to the point that you simply don’t know what to do or whom to pay because you can’t pay everyone, then you are a good candidate for bankruptcy. Stress from money problems often leads to bad decisions, not to mention the negative health effects. So if you find yourself seemingly unable to think clearly due to stress, it’s time to consider your bankruptcy options.

If you find yourself using credit cards to pay your living expenses or, worse, to pay other credit card bills, then you are a definite candidate for bankruptcy. We Americans are always hopeful and optimistic that things are about to get better. It’s one of those characteristics that make us great as a people. It’s also a characteristic that gets us deeper in the hole and in the case of bankruptcy, can make it more difficult for your bankruptcy lawyer to help you get out of the hole. Too many credit card charges immediately before a bankruptcy filing, can prevent you from eliminating certain debts if you find yourself in a situation where you need to quickly file a bankruptcy case.

One last item that is a huge flag red flag telling you it is time to consider seeing a bankruptcy attorney – taking money from your retirement savings to pay monthly credit card bills. I hate seeing people completely empty their retirement accounts only to still need to file a bankruptcy case when the retirement money is gone and all that remains is a big tax bill that bankruptcy can’t eliminate.

So if you find yourself in any of these situations, I certainly won’t tell you that you should file for bankruptcy, but life may be sending you a message.

by Rick Palmer

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