When Should I File for Bankruptcy?

When Should I File Bankruptcy?

For many people, bankruptcy is a last resort after they have exhausted every other way of dealing with debt. Waiting too long to file bankruptcy, however, can end up putting you in a deeper hole than you need to be in. Don’t squander and use up assets that can be protected by filing bankruptcy. Don’t lose your house by waiting for the mortgage to get so far behind that it is not practical to try to catch up the arrears. Don’t borrow from Peter to pay Paul. Don’t take unsecured debt and make it secured if this is not in your best interest. Call us to help you decide if now is the right time to file.

At the law firm of Gross & Patterson, LLC, in Pittsburgh, our lawyers offer a free initial consultation to evaluate your situation and discuss when you should file bankruptcy.

Stop-Gap Measures That Don’t Work

Many of the stop-gap measures that people use to get out of debt often result in further debt and the loss of assets that you could have saved by filing bankruptcy. Here are some examples:

  • Dipping into retirement accounts: Withdrawing money from your 401(k) or IRA account to pay off debt is a bad idea. Bankruptcy laws allow you to discharge debts and keep your retirement savings. Once you have accessed money from these types of accounts, you may be required to pay penalties and additional taxes all of which may be avoided if you can file for protection under the Bankruptcy Code.
  • Borrowing money from relatives: Robbing from Peter to pay Paul is not a way to get out of debt. By filing bankruptcy, you can get rid of debts and stay on good terms with your relatives. If you do borrow from relatives, and ultimately have to file bankruptcy, your obligations to family members are treated no differently than obligations to any credit card company you owe. This may further harm your family relationships.
  • Participating in debt consolidation schemes: Debt consolidation usually amounts to sending good money after bad. While you are paying money to a third party, your credit card company will continue to charge interest and penalties with no guarantee that it will ever negotiate your debt. By filing bankruptcy, you stop any additional interest and penalties from accruing to credit card companies and you fix the amount that is owed on the date that you file. Debt consolidation companies cannot fix your liabilities nor stop penalties and interest from running on your credit cards while you are in a debt consolidation plan. Learn more about the pitfalls of debt consolidation.

Bankruptcy laws give you protections that no other form of debt relief can offer. If you have significant debt problems and your situation is not getting better, you would be in a better position if you filed bankruptcy now rather than later. Filing bankruptcy puts an immediate stop to creditor harassment and allows you to take charge of your financial future.


To schedule a free initial consultation with our Pennsylvania bankruptcy attorneys, call 412-553-0140 or fill out the contact form on this website.