I might tell you not to file a bankruptcy, if you had a three hundred dollars in debt, and a hundred thousand dollars of income a year; that just wouldn't make any sense!
Now, there are some guidelines to help you make your decision.
One is the Joseph C. McDaniel Rule of Bankruptcy Inevitability, which says that if you have unsecured debt (like credit card debt and medical bills) that are the same amount as your yearly income, you're a walking bankruptcy case, whether you know it or not.
The reason is that you can make minimum payments, and work extra jobs, and burn through your retirement funds (I hate it when you do that!!!) for a while, but eventually, you'll get sick, tired, depressed, divorced, sued, or run over by a truck.
And then you get to file a bankruptcy, even though you've struggled against it for years.
Most of my clients tell me that they experience a fair amount of peace after resigning themselves to a bankruptcy. My high-income professional clients often tell me it was the best decision they ever made for their mental health.
Some people like to watch videos instead of reading, which is simply a personal preference, so if you like videos best, watch these and then give us a call.
But if you are confused about filing a bankruptcy, consider the following issues, which should help make the decision easier for you:
1) do you pass the means test, or can you pass the means test by the time we file for you? For that analysis, you'll need a median income calculator and maybe a means test calculator.
2) do you have more unsecured debt than your yearly income? For that, you just need a pocket calculator!
3) could you ever, if you lived forever, pay off your unsecured debt? You probably want to consult a free, online credit card payoff calculator.
4) do you ever want to retire? Ask yourself, if you ever want to retire, and you can't put money in a retirement vehicle, do you need to file a bankruptcy? And how long will it take you to save money to retire? For that, you'll need a free, online retirement calculator, I think.
5) The above issues will probably help a lot, but if you are still teetering, consider this: will you, with your current debt load, ever be able to put your kids through college? And if not, will they thrive asking the question of the ages: "Would you like fries with that, sir?"
6) And for those of you who still can't decide if they should file a bankruptcy, you might want to check and see how much underwater your house is right now, because some people have a foggy idea that they can just sell their houses when it's time to retire. That's probably wrong, for the next twenty years. But check Zillow.com to see how much your house is worth today.
7) After that, if you want to talk about filing a bankruptcy, do your bankruptcy homework, and then, well....
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