Bankruptcy

8 Reasons to File for Bankruptcy - Part 1

While difficult to do, the decision to file bankruptcy may be the best financial decision you can make for your long-term finances. There are several reasons why an individual decides to file bankruptcy. At First Source Law, we have compiled the top 8 reasons below. While the list covers the most typical reasons why an individual would file bankruptcy, it is not exhaustive. Each individual is different and you may still be a good candidate even if you do not fall into one of the reasons below.

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Even if you fall into the below categories, the timing to file bankruptcy may not be right or bankruptcy may still be the wrong decision. Please review the Top 5 Reasons to Not File Bankruptcy.

1. Debts are so unmanageable that you will not be able to repay

This is the ultimate question that must be asked when considering bankruptcy. Essentially, this is purely a financial decision. Setting aside all else, how long will it take you to reasonably pay back all your outstanding debt that qualifies for discharge under bankruptcy. Contact our office today so we can discuss the various factors that go into this analysis including the long-term effect on your credit.

2. Prevent Repossession

Clients often ask if they will have to give up their car after filing bankruptcy. Not only do many clients get to keep their car after bankruptcy, filing bankruptcy will stop creditors from trying to repossess your vehicle. During this automatic stay, you may then decide whether you want to keep your car or if it is best to let it go. This may also be true of other secured debts.

3. Reduce or Eliminate Medical Bills

Many people get in financial trouble because of their unexpected illness or an illness in the family. Despite your best intentions, bankruptcy protection may be your only option from getting out from underneath unexpected medical bills. If you have high medical bills and have been unable to pay them back, contact our office to see if bankruptcy is the right decision for you.

4. Stop Harassing Calls

Upon filing a bankruptcy petition, creditors can no longer demand payment for most outstanding debts. Further, it will ensure that creditors no longer engage in abusive behavior such as contacting you repeatedly or contacting you at your place of employment.