How do I know if bankruptcy’s right for me?

To file, or not to file? That is the question where bankruptcy is concerned.

If you are struggling - seriously struggling - with debt, you might be considering a bankruptcy filing. Bankruptcy is a big decision. Here are some signs that bankruptcy might be right for you.

You're facing debt collector harassment

If you're afraid to answer the phone or head to the mailbox because of debt collector harassment and threats, you are not alone. Debt collectors are notorious for their shady and relentless collection techniques. A Chapter 7 or Chapter 13 bankruptcy filing will put an end to this harassing behavior. Bankruptcy's automatic stay means that all collection actions must cease immediately. This means no more phone calls at home or at work, no more threatening letters, and no lawsuits.

You can't cover basic expenses

If your debt has grown to the point that you are having to choose between making payments on it and covering basic expenses, bankruptcy might be a good idea. This is true even if you are putting utilities, gas for your car and groceries on your credit cards. You are simply racking up more debt in an attempt to get out of debt; it's a vicious cycle. Thankfully, bankruptcy can help.

You're facing wage garnishment

If you've been subject to a debt collection lawsuit, there's a chance your wages have been garnished. Without that extra income, you might be having trouble making your other bills and payments on other outstanding debts. Bankruptcy can remove most wage garnishments, freeing up the money to make payments on your mortgage, your auto loans, and debts that wouldn't be dischargeable in bankruptcy.

It is important to note, however, that student loan garnishments, tax liens and domestic support obligations (garnishment to cover alimony or child support) are generally not removable through bankruptcy.

You fear foreclosure

Mortgage lenders are cracking down about missed payments. Miss just two or three mortgage payments, and you might reasonably fear that foreclosure proceedings are in your future. You can put a halt to foreclosure with a bankruptcy filing; the automatic stay for bankruptcy also applies to foreclosure collection actions. You will need to keep making your mortgage payments, but bankruptcy can literally help you save your home.

Most of your debts are unsecured

Credit card debt and medical expenses (which often go hand-in-hand) are two of the most common reasons that people file for bankruptcy protection. If the majority of your debt is unsecured, there's a good chance that it is dischargeable through bankruptcy. If you have a steady income, you can work to pay down your unsecured debt through a Chapter 13 repayment plan. You'll make payments for a period of time determined by the court, and at the end, remaining debt is wiped clean.

If you are seriously considering filing for bankruptcy, an experienced bankruptcy attorney can help you decide if it's the right move for you.