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When You Should Think Twice About Filing for Bankruptcy

Many people who have encountered financial difficulties believe that bankruptcy is the best possible option. While it is true that bankruptcy is often a good choice, there are a number of reasons why people should think twice before filing for bankruptcy in certain situations. The following will discuss some of the reasons why you might not want to file for bankruptcy.

You are Able to Pay Your Debts

Some people are able to still pay their debts, but believe that bankruptcy will offer a quick option to walk away from any debt that they have accrued. If your monthly expenses subtracted from your monthly income still leaves a fair amount of money, there is a possibility that you might not qualify for bankruptcy. Instead, it is a better idea to make arrangements to pay off your debt. If you are not able to repay your debts, however, bankruptcy is often a good option.

Your Debt is Primarily Tax Debt

Some types of debt are not capable of being discharged through the bankruptcy process, which includes many kinds of tax debt. For example, to be discharged in bankruptcy, income tax must be at least three years old and a person must not have had anything assessed against him or her in 240 days. As a result, if the majority of your debts are income taxes, there is a possibility that bankruptcy might not be a good idea for you.

Your Debt is Primarily Student Loans

Much like taxes, student loans are difficult to discharge through the bankruptcy process. A person who is able to successfully show a hardship, however, is often able to discharge a student loan debt. The challenge is that establishing a hardship is particularly difficult. In situations in which student loan debt is a person’s primary debt, it is often a better idea to research the numerous organizations that help people with student loans who are going through financial difficulties.

Bankruptcy Will Negatively Impact Your Credit Score

In the short run, filing for bankruptcy negatively impacts a person’s credit score. It can be difficult, however, to determine how much bankruptcy will lower a person’s credit score. For many people who have credit scores of 550 or lower, it is common for the bankruptcy process to not lower a person’s credit score much more. For individuals with good credit scores, however, a credit score is often severely impacted. Even though many people witness their credit score increase within a 12-month period after their bankruptcy is discharged, people with good to excellent credit scores often want to consider pursuing other types of debt resolution.

You Will Lose Assets

With numerous types of bankruptcy including Chapter 7, a person’s assets are at risk of being sold to pay off debts. If you have assets that do not qualify under any bankruptcy exemption, a bankruptcy trustee will likely be able to sell these assets and give the money to creditors. For some people who are afraid of losing property, this can be a reason to not file for bankruptcy.

You Recently Received an Inheritance

If you have received an inheritance recently or are entitled to receive an inheritance, it is possible that filing bankruptcy right now or in the immediate future might not be the best option for you. If a person who recently received an inheritance decides to file for bankruptcy, there is a possibility that a bankruptcy trustee will take that money and use it to pay creditors. Instead, it is often a better idea to wait until assets are received from an inheritance and then use this amount to pay off any debts.

You are Interested in Making a Large Purchase

Some people believe that filing for bankruptcy will enable them to purchase a large item by eliminating the individual’s debt, which often includes either maxed out credits or a debt on which the individual is behind. Bankruptcy, however, does not exist to eliminate debt so a person can acquire more material goods. Instead, a person often is able to obtain a substantial loan for the months or even years immediately following the discharge of a bankruptcy. Also, in situations in which a debtor only has bills but still has an income, it is difficult to qualify for certain types of bankruptcy.

Speak with an Experienced Bankruptcy Attorney

If you are interested in learning whether the bankruptcy process is right for you, contact attorney Melanie Tavare today to schedule a free initial consultation.


"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."


"I can't thank Melanie enough for helping me through a challenging process and doing so with incredible knowledge, professionalism and tenacity! She went to great lengths to keep me informed, she responded quickly to my questions, and communicated in terms that I could understand. I highly recommend getting in touch with Melanie should you have the need."


"Choosing to work with Atty. Melanie has been one of the best decisions I've ever made. She was a very patient professional to work with and attentive while providing valuable solutions to all of my concerns. If you are searching for of an Attorney who is knowledgeable, transparent, and diligent - well that's Atty. Melanie."


"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."