Is Filing for Bankruptcy The Right Decision?
Before you file for bankruptcy, there are some important initial considerations which may affect your ultimate decision on filing, and the form of bankruptcy you choose. Important initial considerations include whether or not your debts are dischargeable in bankruptcy, whether you want to keep part or all of your debt, the relative costs and benefits of bankruptcy, your financial future after bankruptcy, the possible effect on your employment and prospective employment, and how your credit record may affect your ability to rent or purchase a residence in the event that you move.
Are Your Debts Dischargeable? |
You may find that, due to the nature of your debts, filing for bankruptcy will not provide you any relief. Most debts in the following categories will not be discharged in a bankruptcy.
- Some Taxes;
- Customs Duty;
- Damages Awards Resulting From Your Actions While You Were Drunk Or Under The Influence Of Drugs (e.g., a verdict against you from a drunk driving accident).
- Court Fines & Criminal Restitution
- Child Support and Spousal Support;
- Student Loans;
A "secured debt" is a debt that is secured by collateral, such as a mortgage or car loan. Most consumer debts are "unsecured," such as most credit card debts, medical bills, legal fees, and utility bills. |
Do You Want To Keep Your Debt?
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As strange as it may sound, you may not want all of your debts to be resolved through the bankruptcy. For example, you may not want to give up your car, and thus may agree to continue paying your car loan, rather than seeking relief from that debt. If your debts are primarily for items that you consider indispensible, you may wish to pursue other options. |
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