Should I File for Bankruptcy?

 US News columnist Kimberly Palmer offers these helpful suggestions to consider before making the decision:

  • Take a close look at your budget to see if there is a way to resolve your financial issues through various lifestyle changes, etc.
  • Prioritize your house and car payments. These are usually your most important assets.  Don’t make the mistake of paying your credit cards first just to stop the annoying collection calls.  Your credit cards should be paid only after you have taken care of keeping a roof over your head and/or a vehicle in which to drive to work.
  • Exhaust your other options, such as trying to negotiate other payment plans your creditors, such as loan modification.
  • Consider your credit score. Although it is true that bankruptcy can be reported on your credit report for up to 10 years, most people who are considering bankruptcy already have low credit scores, and bad credit typically appears on your credit report for seven years.
  • If it’s the right decision, don’t wait. If you can’t afford to pay your bills now, there’s no reason to keep getting further behind.
  • Seek professional help. Bankruptcy attorneys usually offer free initial consultations and then arrange payment plans.
  • Stay away from scams. Companies that promise to cut your debt in half for free are often just scams.  They offer a quick fix, but require large upfront fees.  The next thing you realize is that your debts aren’t being paid and the situation quickly becomes unmanageable.
  • Try to keep your car and house after filing.
  • Be patient. Learn as much as you can about managing your finances responsibly, how credit cards work, how to bank online and how to monitor your credit report.

When is it time to file bankruptcy?

According to the article “What You Need to Know About Bankruptcy” posted on September 22, 2014, by Denise Pritchard of WZZM 13 ABC On Your Side, the most common errors people make in trying to avoid bankruptcy include: (1) taking out a home equity loan or refinance their home to pay off credit card debt; (2) borrow or withdraw savings from their retirement funds; (3) use tax refunds to pay debts; and (4) borrow from family and friends. Author and television personality Gail Vaz-Oxlade once said, “If you can’t keep a roof over your head … if you have assets, sell your assets to pay off your debt.  If you can’t keep body and soul together, then you declare bankruptcy.”  In other words, if you can’t handle your bills and you’re running out of money before the end of the month, it’s time to consider bankruptcy as an option.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Should I File For Bankruptcy?, or any other Bankruptcy matters, please feel free to contact Joel E. Sannes at 480.461.5307, or log on to,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.