Deciding Whether to Seek Bankruptcy Protection

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Many people ask me whether they should try to avoid bankruptcy
at all costs. "But of course," I tell them, "if you have money to pay
your creditors you should pay them. After all, you promised to do
that when you asked for credit."

When you are in dire financial circumstances you cannot ask
yourself whether you should avoid bankruptcy at all costs. Instead,
you should ask yourself: "Based on my financial resources what
choices do I have?" That is a question you can work with in order to
determine whether you should file for bankruptcy.

The first thing you have to do when you are in financial difficulties
is to know your circumstances. Sit down at the kitchen table and
make a list of all your monthly expenses; rent, utilities, food,
transportation, etc., after you have accounted for all of your monthly
expenses, add them up and look at the total: do your expenses
exceed your income? Is your situation likely to change for the
better any time soon?

If you are uncertain, maybe you should consult a financial planner
or a bankruptcy attorney. Sometimes we need someone to help us
clarify an issue.

Thnking About Filing for Bakruptcy

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If you are reading this blog, you are probably exploring ways to improve your financial situation. Many people today have lost one of their jobs, or the one job they had. Others have seen their full time jobs reduced to part time employment. Some have experienced health problems and, not having health insurance coverage, they have spent their savings on medical treatment. There are many different ways someone can experience financial distress.

Misery loves company, they say. But it is hard to find consolation in being one among many who are unable to pay their debts and are having trouble covering their basic necessities. Like most people, you want to make your payments on time, and you do not want to deal with collection agencies on the phone.

If you are in a dire financial situation, you could probably find relief by filing a petition for bankruptcy. Individual consumers often seek protection under Chapter 7 of the Bankruptcy Law. To qualify under Chapter 7, your income must be insufficient to pay for your monthly expenses. There are many other issues that require consideration and the particular circumstances of your case will determine whether or not bankruptcy is the answer to your problem.