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When Is Bankruptcy Right For Me?

A while back, I wrote a blog titled “What Chapter of Bankruptcy is Right for Me?” This blog is meant to supplement, or even precede that blog as we explore whether someone should even file bankruptcy. The determination on whether to file is largely based upon the debtor’s income and non-exempt assets.

We are unable to think of every fact pattern and every instance where Chapter 7 or Chapter 13 may be a good or bad choice. The lists below is meant to include basic examples. You should review your specific situation with an attorney to determine if liquidation or reorganization is best for you given your circumstances.

Bankruptcy is a good choice in the following circumstances:

  • The borrower is unable to repay the debt, or the debtor has an inability to catch up that debt over a short period of time;
  • The borrower is facing foreclosure;
  • The borrower is facing garnishment of wages;
  • The debtor is facing a repossession or replevin of assets;
  • The debtor has huge medical bills (unless those bills are related to a personal injury case); or
  • The debtor was laid off and is either unable to find a new job, or found a new job at a lower salary.

Bankruptcy might be a bad choice in the following circumstances:

  • The debtor owns 100% of a business that is valuable or profitable;
  • The debtor owns some other expensive asset (like jewelry, multiple cars, multiple investment properties, etc.);
  • The debtor is entitled to a personal injury judgment;
  • The debtor is entitled to a large inheritance;
  • The debts are related to commission of a crime, or the debts are related to some intentional act of the debtor (like theft, vandalism, fraud, etc.) because such debts may be non-dischargeable;
  • Some other method to eliminate the debt is appropriate.

In situations where bankruptcy is a bad option, we can explore other means of resolving outstanding debt with the creditors – like debt settlement, a drop in interest rates, payment plans, or some other option. Maybe the borrower is “judgment proof” and has a “thick skin” where doing nothing is also an appropriate option.

For more information on bankruptcy, please subscribe to the Yesner Law Podcast, on iTunes and Stitcher. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at

Shawn M. Yesner, Esq., is the founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate debt by providing options, so they can live the lifestyle of their dreams. We assist clients with asset protection, bankruptcy, Chapter 7 liquidation, Chapter 13 reorganization, foreclosure defense, debt settlement, landlord/tenant issues, the sale and purchase of real property, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.

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