Deciding whether or not to file for bankruptcy can be a major, life-altering decision.  Some people are so scared of taking that plunge, they avoid considering it completely–which could be a big mistake.  Bankruptcy may not be for everyone, but there’s certainly no harm in at least considering it in your specific situation.  Who knows?  It just might be the financial fresh start you need to get your life back on track!  Here’s a list of questions to ask yourself to make your decision easier.

Q:  Have I done my sincere best to negotiate with creditors?

If you’ve tried to work out a repayment plan with one or more of your creditors, but they’re not willing to budge on wanting the full payment now, bankruptcy may be your best option.  During bankruptcy proceedings you’ll have the benefit of an automatic stay prohibiting your creditors from making any collection attempts while the court oversees your case.  Just think–no more harassing telephone calls or dealing with inflexible people unwilling to negotiate a practical payment plan you can actually afford.

Q:  Do my liabilities outweigh my assets?

This is often the bottom line question when it comes to deciding whether or not to file for bankruptcy.  If your money out exceeds the money you have coming in, it’s only a matter of time before you find yourself drowning financially and bankruptcy may become your only option.  By considering it before things get completely out of control, you may find yourself with a little more control than if you wait until your hands are tied.

Q:  Are my wages being garnished?

If your wages are being garnished and you’re now having an tough time making ends meet, bankruptcy may help give you breathing room while you juggle all your financial responsibilities.  While certain types of debt–such as child support and alimony–are non-dischargeable in bankruptcy, you may be able to have enough of your other debt discharged that the wage garnishment won’t financially strangle you anymore.  Alternatively, if you don’t qualify for Chapter 7 bankruptcy, you may be able to work out a manageable payment plan through Chapter 13 bankruptcy instead.

Q:  Are most of my debts unsecured?

Unsecured debts are those like credit cards bills and medical bills that do not have some form of physical property securing them, like car loans or home mortgages.  In most cases, you are going to have to pay most if not all of your secured debt like car loans or mortgages if you wish to retain possession of your car or home.

Q:  Am I more than 30 days late on more than one bill?

The more and more delinquent you become on multiple bills, the harder you’re going to find it to catch up, and the more damage that’s being done to your credit score.  Once this happens, you may well do less damage in the long run by filing for bankruptcy and then re-establishing responsible credit use than continuing to become more delinquent on your bills.

These are just a few questions to consider when looking at your bankruptcy options.  It’s better to look at the situation logically, and with as little negative emotion toward the thought of filing for bankruptcy, as possible.  Only then can you truly make the decision that’s best for you.