Making the decision to file for bankruptcy is not one that anyone takes lightly. It’s usually considered as a last resort when debts are unaffordable and someone is evaluating all options that may allow them to better take control of their situation.
As you weigh up the pros and cons of bankruptcy, you’ll need to be sure it’s the right step for you before you start. Below are a few of the reasons why bankruptcy might not be the right choice for you. Because, while bankruptcy is a life-saver for hundreds of thousands of Americans each year, it isn’t the best fit for all circumstances.
If your debt is largely comprised of unpaid tax or child support
Both of these types of debt cannot be discharged at the conclusion of a bankruptcy case. If these debts are the primary struggles that you can’t seem to overcome, filing for bankruptcy won’t solve your issues. Other debts you cannot include in a bankruptcy include unpaid alimony and most debts to government agencies.
You may earn too much money
If you’re considering a Chapter 7 bankruptcy because your debt is unaffordable, you may find that you’re ineligible because your income is too high. The other option, however, if you’re not eligible for a Chapter 7 bankruptcy is Chapter 13 bankruptcy, as long as you can reliably make a manageable debt payment monthly on your debts that have been temporarily consolidated by the court.
If you’re considering filing for bankruptcy, it’s important to be aware of all the information you need to make the best choice for your unique circumstances. Speaking with a legal professional who practices this area of law can help you navigate your options.