The decision to file bankruptcy is not one that should be taken lightly. While it can achieve debt relief, it’s not always the best solution for everyone. In some cases, it may make more sense to wait and do nothing. If you’re trying to figure out the most suitable approach for handling your own debt struggles, take the following considerations into account before determining which option is right for your financial situation.

Factors to Consider Before Deciding Whether or Not to File Bankruptcy 

1. Do You Have Assets That Creditors Can Take?

If you live a simple life, earning little income and owning a minimal amount of property, you may be considered judgment proof. This means that even if you are sued by your creditors, they won’t be able to collect on any judgments they are awarded because you don’t have anything they can legally take from you. The law prohibits creditors from seizing a debtor’s basic living essentials. Additionally, they are unable to collect any Social Security benefits or other forms of public assistance you may receive. You may not have a good reason to file bankruptcy if you’re judgment proof; however, this could change if your finances improve even slightly.

2. What Type of Debt Do You Have?

Bankruptcy can only help you eliminate certain types of debts. It will only be effective if the majority of your debt is unsecured, meaning it comes from credit card bills, medical expenses, or personal loans. Child support, income taxes, and student loans cannot be discharged in a Chapter 7 bankruptcy. On the other hand, a Chapter 13 bankruptcy can give you the chance to restructure these debts into a repayment plan that will give you three to five years to pay them off. 

3. Are You Facing Foreclosure or Repossession?

Although filing bankruptcy won’t get rid of mortgage payments or car loans, it can still help you avoid foreclosure on your home or repossession of your vehicle. Through a Chapter 13 bankruptcy, you’ll have time to get caught up on delinquent payments. Thus, if you’re at risk of losing your home or vehicle, bankruptcy will be the right step to take. 

The best way to know if you’re a good candidate for bankruptcy is to consult an experienced attorney. Mark Briden Law in Shasta County, CA, offers more than three decades of experience in this specific area of practice and can help identify if filing bankruptcy is the most viable solution for getting your finances back on track. They will carefully assess your current circumstances and advise you on what course of action to take next. If you are worried about your debt problems, don’t hesitate to call (530) 222-1664 to set up a free consultation that can be conducted over the phone or in the office. You can also visit their website for more information about your options and setting up a payment plan for services.