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"Should I File Bankruptcy?"

Deciding whether or not to file bankruptcy—or even whether bankruptcy is your best option—can be a difficult decision. There is no easy formula for deciding when bankruptcy is the right choice. You should consider bankruptcy as an option if you are unable to pay your bills for an extended time and especially if:

● Creditors are threatening to repossess or foreclose on your home or other assets, especially if you are threatened with the loss of your family home or vehicle.

● You have been sued and a creditor has a judgment and is garnishing your wages or bank accounts.

● You have had a severe financial setback, such as a divorce, an uninsured illness or accident, the loss of your job, business failure, or other catastrophic financial loss.

● You can’t come up with and stick to a budget that will get you out of debt within five years.

In general, if you are facing garnishment, foreclosure, or repossession that is affecting your home, job, or family security, then bankruptcy is probably the right option. But not always. Sometimes filing bankruptcy is a bad option, even if you are having financial difficulty.

There are alternatives to filing bankruptcy, including:

● Consolidating your debts to reduce your monthly payments and interest rates.

● Working out payments with creditors to lower or skip payments or settle debts to pay off balances for less than you owe.

● Seeking the help of a reputable credit counseling agency to help you negotiate with creditors reduce payments. But watch out for scams!

All of these options require that you create a realistic budget, and that you stick to it! Consolidating credit card debts will do you no good if you go right out and charge up your credit cards again. Also, these options may negatively impact your credit score, although if you're considering these options your credit rating may already be impacted.

Some people think cashing out their retirement savings to pay debts is a good idea. It isn't! Those assets are protected from creditors by law, and you may create tax liability in the process, so this should be a last resort.

It's best to find out your options before it's too late. Don’t wait until your bank account is garnished or your home is in foreclosure to find out if bankruptcy is the right option. By then, it may be your only option.

If you need advice regarding bankruptcy and potential options, contact Westwood Law attorney Jeff Smoot at (206) 420-2466 or Jeff has extensive experience representing consumer and non-consumer debtors in bankruptcy and other debt-related matters. His book, Making Bankruptcy Work for You, is available on Amazon.

This blog is intended for informational purposes only and does not constitute legal advice or an offer of representation. No attorney-client relationship is intended or created by this article. If you wish to obtain legal representation, please contact Westwood Law Group PLLC at (206) 420-2466 or

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