Am I a Good Candidate For Bankruptcy?

by Gary Foreman

Am I a Good Candidate for Bankruptcy photo

Bankruptcy is not the right financial solution to all debt problems but it might be for yours. Take a look at these guidelines to find out if you are a good candidate for bankruptcy or if there are other options you should consider.

Our purpose with this post is not to qualify you for bankruptcy.

Our goal is to help you decide whether it would be a good idea to contact a counselor that can help you make a final decision.

Let’s look at some bankruptcy facts and then you can decide whether filing for bankruptcy could be a good solution to your debt problem.

Bankruptcy protection does offer some advantages.

Among them are:

  • you’ll eliminate your credit card balances
  • you’ll eliminate any medical bills
  • you can stop a foreclosure on your home
  • you can stop wage garnishment
  • collection calls will be stopped

Some of your possessions are protected in bankruptcy. That means the creditors can’t take them from you. They include your home, car, furniture and wages.

It’s important to remember that all of your bills are not automatically included in the bankruptcy filing. You can choose to exclude certain bills and continue to pay them. You also run the risk of overlooking bills that you wanted to include in the bankruptcy but didn’t.

There are some debts that will not be discharged in bankruptcy.

They include:

  • Most taxes
  • Child support
  • Alimony
  • Most student loans
  • Court fines and money owed due to criminal offenses
  • Money owed others due to personal injury caused by driving under the influence of drugs or drink

Are you a good candidate for bankruptcy?

Consider these items:

Good Candidate for Bankruptcy:

  • your debts would take more than 5 years to repay
  • you cannot meet all your commitments on your present income
  • you have assets you want to protect from creditors – like your home
  • your creditors are threatening or have started taking legal action to collect
  • dealing with your debts is having a negative effect on your emotions or effecting your relationship with your spouse

Bad Candidate for Bankruptcy:

  • you can pay off your debts in 5 years or less
  • it could affect your job. It is illegal to fire someone for declaring bankruptcy, but some companies will check your credit score if you apply for a job with them
  • you’ll have trouble getting over feeling like a failure if you file for bankruptcy
  • some or many of your debts cannot be discharged in bankruptcy

If you think that you may be a good candidate for bankruptcy contact a debt counselor. They’ll be able to get your specifics and recommend a course of action. TDS recommends the professionals at Debt.com. You can contact them using the form below.

If you have significant debts, but feel that filing for bankruptcy clearly isn’t for you, then you might want to consider credit counseling as an alternative. TDS recommends that you contact the Financial Counseling Association of America (FCAA) to find a trust-worthy counselor. Their standards ensure that consumers with problem debt will receive expert help from experienced organizations they can trust.

Take Action Now:

  • If you think you are a good candidate for bankruptcy help, contact Debt.com now. Don’t put your finances in further jeopardy.
  • If you are not a good candidate for bankruptcy, or simply do not feel comfortable pursuing bankruptcy, see if you might be a good candidate for credit counseling.
  • Understand what the future may have in store for you if you decide not to do anything about your debt.

If you’d like help outside of bankruptcy

If you’d like to consider other debt payoff options before considering bankruptcy, or if it does not look like you will qualify for bankruptcy, take a look at the TDS ebook How to Conquer Debt No Matter How Much You Have.

We will walk you through the creation of your own personalized debt payoff plan tailored to your debt burden, budget and lifestyle. You can read more about it here.

Reviewed August 2020

About the Author

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.

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