When Do I Know Its Right To File For Bankruptcy? 5 Top Reasons. Part I of II.

While the answer to this question is many times easier than one would expect, the acceptance of the answer is usually the most difficult part. This is because of the misconstrued social stigma associated with bankruptcy.

Generally, when I meet people for bankruptcy consultations, I always start with the general question of “do you think you can realistically pay off all your debts within the next two to three years?” If its an absolute “Yes,” (and I bring up the fact that they cant’ cheat and eat Top Ramen for the next 3 year) , then I say pay it and goodbye. If the answer is “No,” then I almost always recommend filing for bankruptcy relief.

Then the emotional roller coaster starts. I start to see mixed emotions. On the one hand, they are overjoyed with the good news of being debt free. They are immediately filled with happiness, and elated with the wonderful news of eliminating the 800 pound gorilla. Its almost like winning the Lottery! The  Kleenex comes out of my drawer.

But then I see them in turmoil with guilt. They are saddened and feel like their efforts never achieved success. They sense failure. Despite all their hard work, they were not able to keep their word on their financial responsibilities. Their friends, family, and co-workers all seem to make ends meet, but for some reason they can not. What would their parents or grandparents think? No one ever filed for bankruptcy in their generations!

And so the battle begins. Pride versus happiness versus common sense. The “Debt Free Angel” is on the right shoulder and the “Don’t File Debt Devil” is on the left shoulder. A war has begun. Its almost like I’m watching a cartoon, but this is real! Sometimes the battle is quick, lasting only minutes. Other times, I see the individual many times over time and it takes years. It is this struggle that is usually the biggest hurdle to overcome in deciding to file for bankruptcy relief.

Inevitably, most people that need to file end up filing. And unfortunately, the few that don’t voluntarily file after my recommendation, are eventually forced to file after a wage garnishment or bank levy. And so the file is either opened that day with immediate relief, or it is opened at a later date when the debt free Angel conquers the Debt Devil.

So to ease the Angel and Devil War, I have come up with my Top 5 Reasons to File Bankruptcy.

Click here to read about them in Part II of II.

Written by Michael Doan

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