As the economy continues to move sluggishly and unemployment rates remain high, business owners and employees alike have asked “should I file for bankruptcy”? Since I have no idea where the nearest bankruptcy court is, I enlisted the help of Irvine bankruptcy attorney Jeffrey Hsu to guest blog here today.
“When should an individual file for bankruptcy? That is a difficult question to answer because the decision to file for bankruptcy is specific to the individual contemplating bankruptcy relief.
The decision to file bankruptcy should always be one of last resort. That means other options should always be completely exhausted before one decides to file bankruptcy. Most importantly, filing bankruptcy is fact specific and depends on the issues a person is facing.
The most common factors for those filing bankruptcy include issues related to credit card debts, lawsuits, wage garnishments, or tax liabilities. When an individual faces such issues, the likelihood of filing for bankruptcy is still not certain. Factors that can influence the decision to file for bankruptcy include, but are not limited to:
- Property the individual may lose as non-exempt property in the bankruptcy case.
- Repayment of monies from future earnings if the individual is subject to a chapter 13 or chapter 11 where payment plans are instituted typically over a period of years compared to a chapter 7 filing where no repayment is necessary.
- Any transfers of assets before or after the bankruptcy including the sale of assets, gifting of assets, or creation of a trust. These asset transfers may be improper in the context of a bankruptcy case.
There are clearly many factors that can shape a person’s decision to file for bankruptcy protection. When facing mounting financial difficulty, an individual should contact a bankruptcy attorney as soon as possible. Oftentimes, this allows the bankruptcy attorney to offer other options aside from filing bankruptcy to remedy the person’s financial situation. However, bankruptcy is often the most powerful source of financial relief for the “honest but unfortunate debtor.” For those with no other viable recourse, the decision to file for bankruptcy may be the best available option.”
If you have questions regarding bankruptcy or alternatives to bankruptcy, you may contact Mr. Hsu here or call him at 949-407-5049.