3 Questions You Should Ask Before You File Bankruptcy

When a debtor is trying to decide whether or not they should consider bankruptcy there are a few questions they should ask themselves.

  1. Have you filed bankruptcy before?  If you are considering Chapter 7 bankruptcy , you are prohibited from filing for bankruptcy if you filed a Chapter 7 bankruptcy within the last 8 years.  If you are filing for Chapter 13 bankruptcy , you can file if you have not filed a previous Chapter 13 bankruptcy within the last 2 years or a Chapter 7 bankruptcy within the last 4 years.
  2. Will a significant amount of your unsecured debts be discharged?  The type of debt you have could make a big difference in the type of bankruptcy you choose or even be the deciding factor for whether or not you should file bankruptcy. If most of your debt consists of nondischargeable debts such as student loans , certain types of taxes , child support etc., then filing a Chapter 13 bankruptcy may be the best option.  But if your debts consist of mostly unsecured debts such as credit cards and private unsecured loans, then you may want to discharge those debts in Chapter 7 bankruptcy.
  3. What assets do you want to keep?  If you have a home, car or other assets that you want to keep which may not be exempt, then filling Chapter 13 bankruptcy could be a good option for you.  But if you have few or no assets, a Chapter 7 bankruptcy might be the most effective choice.  Also, those who are unemployed are obviously good candidates for Chapter 7 bankruptcy.