As an experienced bankruptcy attorney having successfully handled thousands of bankruptcy cases in the Metro Atlanta and North Georgia area, I have been asked the question of “Should I file for Bankruptcy?” countless times. Here is my answer which embodies years of experience as a bankruptcy attorney.
Are there any debt related circumstances in your life that need to be dealt with immediately?
For example you may be facing a garnishment action by a creditor. If your wages or bank account is garnished, then you will not have enough income to pay your regular living expenses like your rent or car note. If that is the case, then bankruptcy may be necessary to protect you from immediate harm. You can learn more details about this subject by reading my Stopping Garnishment article.
You may be facing the foreclosure of your home, and the foreclosure of your home will cause serious harm to you and your family. If that is the case, bankruptcy may be necessary. Remember, bankruptcy is the only sure way to stop foreclosure. Don’t be fooled by these “loan modification specialists” out there. You also may be facing the repossession of your vehicle. If your vehicle is repossessed, you will not be able to go to work, and if you don’t go to work, you are likely to lose your job. In this type of situation, you may have to file bankruptcy, since bankruptcy will stop the repossession process. If your situation resembles one of the above explained situations, I would contact a competent bankruptcy lawyer. If not, then go on to the next step.
Second, look at your current disposable income and debt.
Now that you have established that you are not dealing with an emergency situation, consider the next question: Can you pay all your debt, if you lived in a frugal fashion without harming yourself and family within a reasonable time? If the answer is yes, then you do not need to file for bankruptcy. Just pay your debt. In making these calculations, you should look factor interest rates your creditors charge. You can use online calculators such as the one on bankrate.com to figure this out. If the answer is no, then go on.
Look at your projected future disposable income.
If your current income is not enough to pay your debts, then you should evaluate how much income you will be making in the future. You may be in a situation where you are not earning the income you can or had been earning. For example, you may be a laid off engineer that has been forced to get a lesser paying job working in a Best Buy store. So, with your current income you may not be able to pay your debt back, but what are the chances of increasing your income in the near future enabling you to pay off your debt? If the chances are low, consider consulting with a bankruptcy attorney.
If you do not have enough income to pay off your debt within a reasonable time, and you are not likely to have an increase in your disposable income anytime soon, then I would consider bankruptcy as an option. Bankruptcy is a mechanism devised by the U.S. Congress to help out individuals that cannot afford to pay their debt back. If you are in this position, then I recommend consulting with a bankruptcy attorney. If you live in Metro Atlanta or North of Macon, GA, give me a call at (678) 507-1590 for a free consultation. I will be happy to discuss your situation with you.