Finance & Investment Articles - 5 reasons to delay filing bankruptcy

by CECILIA HOLMES - Date: 2009-06-26 - Word Count: 452 Share This!

Bankruptcy has helped many families out of overwhelming debt by giving them a fresh financial start. However, there are many situations in which bankruptcy is not the best solution available. Bankruptcy may be the wrong solution for you, and you need to study your situation closely. Here are five cases in which bankruptcy is not the best option:

1. You can pay off your debts within a few years while maintaining a reasonable standard of living

Sometimes having some discipline and setting a budget is all you need to do in order to pay off your debts within a reasonable time. You don't need to starve yourself, but if you can stick to a simple plan and eliminate your debt within the next few years, then bankruptcy may not be necessary after all.

2. Your most worrisome debts will not be eliminated in bankruptcy

You should be aware that some kinds of financial obligations do not usually go away when you file bankruptcy. If you are most concerned about student loans, child support obligations, or criminal fines, then bankruptcy is not the solution. In most cases, these financial obligations will remain.

What about federal income taxes? That depends, but be aware that in many cases they will not be discharged.

3. You don't want to lose your assets.

When you file Chapter 7, you will need to liquidate any nonexempt assets in order to help pay for your debts. You may not want to give away these assets, such as a second house or an expensive car. Finding a way to pay off your debt without bankruptcy can help you keep these assets safe from creditors.

4. Most of your debts are secured by collateral.

If your unsecured debts are only a small portion of your total obligations, then bankruptcy doesn't make sense. Chapter 7 will not eliminate your responsibilities such as paying off your mortgage or car loans. If you want to keep the house, you'll have to keep making the mortgage payments. Otherwise, you can just lose the house without having to declare bankruptcy.

Chapter 13, on the other hand, can help you reorganize the debt and catch up on your mortgage payments over the next few years.

5. You don't really owe creditors the money.

This may not occur in those cases, since so many people have legitimate debts. Still, if you do not think you owe something, by all means fight it instead of giving up and declaring bankruptcy.

Don't let the fear of your debt take over your life. Get the facts about bankruptcy and learn how to get control of your debt. To learn more about reasons to delay filing bankruptcy visit us at

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