Considering Bankruptcy? Common Questions

Many clients call our law firm who are considering bankruptcy but don’t know if they are a “candidate” for bankruptcy, meaning they are not sure if bankruptcy make sense for them, and also don’t know if they are eligible. This article is written to address these 2 very common questions and provide the reader with some direction and timing for commencing a bankruptcy action.

Should I File Bankruptcy?

This is probably the most common question we receive from potential bankruptcy clients. The average individual may know something about bankruptcy and may feel that bankruptcy is an option but often want to know if there are other alternatives or if they should just “bite the bullet” and hire a lawyer to get their bankruptcy started. Every case is different, but generally speaking, if your circumstances are similar to the following, it may be time for you to file.

First, if you are facing an emergency situation in which a creditor is taking pending legal action against you, your best option may be bankruptcy. Such situations may include a garnishment that has left you with little income, a pending foreclosure and you would like to save your home before it is actually foreclosed upon, or a situation in which you know a creditor has received a judgment against you and may begin acting on it through means of property lien or other judicial process. To resolve emergency situation, or at least temporarily prevent them, you should speak with a bankruptcy lawyer as soon as possible.

Second, for individuals who have reached a point in which they cannot pay their bills as they are coming due, it is likely time to consider bankruptcy as an option. Many of us live pay check to pay check. Still, many other of us are actually not living pay check to pay check. These people are going further and further into debt by acquiring new debt to pay for old debt. It is a vicious cycle and often the only way to stop it and get a fresh start is to file bankruptcy.

Get Informed: Who's a Good Candidate for Bankruptcy?

Am I Eligible to File for Bankruptcy?

Whether or not you are eligible to file bankruptcy depends on a number of factors. First, your total gross income will inevitably factor into your eligibility to file for a Chapter 7 or a Chapter 13 bankruptcy. Which chapter you choose to file under often has to do with your income and your desire to keep certain assets. For many people, if your total combined gross yearly income is less than $50,000.00, you may be eligible to file for bankruptcy.

To find out more about your specific case and if you are eligible, you should speak to a qualified bankruptcy attorney as soon as possible.

When Should I File Bankruptcy?

This answer to this question is different for everybody. The simple answer that applies to everyone is that if you are even considering bankruptcy, you should speak with a bankruptcy lawyer to determine when the right time to file for you would be. Most bankruptcy lawyers will provide free consultations so you have nothing to lose by simply sitting down with a lawyer and finding out your options.