Bankruptcy relieves most of your debts and gives you a fresh start. It is the last option you should consider after trying everything else. However, before you file, carefully consider whether bankruptcy is the right option for you, as it can affect your credit ratings in the future. Some good reasons to consider filing for bankruptcy include:


If you are saddled with family debt in your name only, you may want to consider bankruptcy to start fresh. Talk to a bankruptcy lawyer first to understand whether your situation qualifies you for bankruptcy. Nevertheless, make sure that you are not using bankruptcy to avoid your responsibility to pay debts.

Creditors are harassing you

If creditors constantly call you and send threatening letters, bankruptcy can stop the harassment. As soon as you file for bankruptcy, an “automatic stay” is implemented. Creditors must stop all collection activities, including phone calls and letters. The automatic stay will remain in place until your bankruptcy case is over.

Job loss, pay cut, or a medical condition

If you have lost your job or suffered a significant pay cut, you may find it challenging to make ends meet. Bankruptcy may be a good option if you struggle to pay your bills. Medical bills can quickly add up, especially if you have severe injuries or a chronic illness. Bankruptcy may be a good option if you cannot pay your medical bills. Understandably, a medical condition prevents you from working and earning an income. As a result, you may find it challenging to keep up with your debts.

You are facing foreclosure

If you are behind on your mortgage payments and facing foreclosure, bankruptcy may be a good option. Filing for bankruptcy will stop the foreclosure process and allow you to catch up on your payments.

Most often, you will be able to keep your home if you can catch up on your payments within a certain period. If you are considering filing for bankruptcy, you should contact a qualified chapter 13 bankruptcy lawyer to get the best advice and guidance.

You owe the IRS

If you owe the IRS, you may be able to discharge your debt through bankruptcy. However,  you must meet specific requirements before discharging the debt. Some of the conditions are:

  • You didn’t willfully try to evade paying your taxes
  • The taxes are at least three years old
  • You filed your tax return on time
  • You didn’t commit fraud

Speak with a bankruptcy lawyer to see if you qualify.

Unsustainable debt

If you can only pay your bills and sustain your life through credit cards, you may want to consider filing for bankruptcy. Credit card debt is unsecured debt, which means that the creditors can’t take your property if you don’t pay your debt. However, they can still sue and get a judgment against you.


If you have tried everything else and nothing has worked, filing for bankruptcy may be your best option, especially if you face foreclosure or your wages are about to be garnished. Once you file for bankruptcy, an automatic stay will go into effect and stop the foreclosure process or wage garnishment. Filing for bankruptcy gives you a fresh start, which might be the best financial decision you have ever made.


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