When Filing Bankruptcy Is Your Only Choice

Filing bankruptcy is a big step and its records are growing day by day. It is a step which requires careful planning. So if you are going to file a bankruptcy then you need to consult a bankruptcy attorney.

Laguna Beach, CA (prHWY.com) December 22, 2010 - Bankruptcies rose to record highs this year, surpassing even the levels in 2005 when new laws supposedly restricted bankruptcy filings. But it doesn't change the fact that filing bankruptcy is a big step, and one that requires careful planning. Many of those who file for bankruptcy today are actually perfectly qualified for other alternatives, such as debt settlement or a simple reorganization, but were simply unaware of their choices.

So when is filing bankruptcy a good step? There's no single rule that tells you when or when not to file for bankruptcy. Every situation is the result of various circumstances, and one has to take these circumstances into account when choosing whether or not to file. That's why it's a good idea to consult a bankruptcy attorney before taking any steps--they can provide valuable insight and see whether you have any alternatives.

The first thing that bankruptcy lawyers look at is usually the person's total debt. While any amount of debt can prompt one to file for bankruptcy, it's usually worth the trouble only for excessive amounts. As soon as one starts feeling constrained by credit card or insurance payments, or a hardship strikes and makes payments more difficult, it's a good time to start looking for solutions, whether it's filing bankruptcy or something else.

Your ability to pay back your debt is also a major consideration. The means test, a method introduced in 2005 to gauge a debtor's capacity to repay debts, can help you find out whether or not filing bankruptcy is a good option--and if it is, which chapter you should file under. Consult a bankruptcy attorney or go to your local bankruptcy court to get more information on completing the means test, and how to file for bankruptcy.

You should also consider the possible effects of filing bankruptcy on your credit, finances, and tax obligations. Sometimes, getting your debt written off isn't worth the trouble of having limited credit options, not being able to buy a home, or having to pay taxes on certain forgiven debts. Work with your bankruptcy lawyer or a financial advisor to see how much a bankruptcy will cost, and whether you're better off paying your creditors.

If you're not sure how bankruptcy works or how to begin, visit BankruptcyBalance.com. This site offers information on the bankruptcy process, requirements, chapters, and state-specific rules. It also explains the pros and cons of filing bankruptcy and provides tips on successful, hassle-free filing. You can also get in touch with experienced bankruptcy lawyers who can help you figure out your options and guide you through the filing.

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Tag Words: filing bankruptcy, bankruptcy lawyers, bankruptcy, bankruptcy filings

Categories: Finance

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