Reasons NOT to File BankruptcySaturday, December 15th, 2018, 9:01 am
If you’re thinking about filing bankruptcy, you may want to take a moment and rethink your decision. While bankruptcy can help you regain your financial footing, it’s not always the best option. It all depends on your circumstances, of course. However, if you find yourself in any of the following reasons, you may not want to file for bankruptcy just yet.
Can You Pay Your Debts?
Are you still able to pay your debts? Even if you’re behind on some of your payments, if you can still pay most of your monthly bills and have a chance to catch up, it might be too early to consider bankruptcy. Instead, you should contact your creditors, especially those you’re behind on, and discuss payment arrangements. Many are willing to help you get current if you are honest about your situation.
You’re Mainly Behind on Student Loans
There are some debts that bankruptcy won’t erase. If you’ve recently graduated from college with a lot of student loan debt and simply can’t find a job, you might be thinking about using bankruptcy to get rid of this debt. Unfortunately, changes made in 2005 made student loan debt non-dischargeable. That means it will remain even if you file bankruptcy.
You Have a lot of Tax Debt
Another type of debt that is non-dischargeable is tax debt. If you’re behind on your taxes, bankruptcy won’t clear that debt in most cases. It might if it’s over three years old, but most people who are considering bankruptcy due to tax debt have incurred the debt more recently.
You Have Significant Assets
Even if you don’t have a lot of money, you may still have some assets. While some things such as your home and your vehicle are protected from bankruptcy, some assets are not. If you’re going to file Chapter 7 bankruptcy, you could potentially lose many of these unprotected assets. They could be seized and sold to pay off some of your debts. If you don’t want to risk any of your assets, you may want to look for other options.
Seek Professional Help
If you’re thinking about bankruptcy and aren’t sure if it’s the right choice or not, you need to talk to a licensed attorney. Michael F. Kanzer & Associates are bankruptcy experts and can help you determine if it’s the right option.