Certainly there are many other valid reasons, but these five are at the top of my list.
- You and your family are priority number One! If you can not realistically take care of yourself and your family, then the same rationale applies to your creditors. Eventually, you will not be able to take care of them. Of great importance, is the fact that in this country there is no involuntary servitude … slavery (whether racial or financial) is prohibited by our Constitution. Our Constitution emphasizes our natural and inalienable rights to life, liberty and the pursuit of happiness. We cannot pursue happiness, much less be possessed of liberty or really be said to be participating in anything resembling a “life”, when our blood, sweat, tears and toil accomplish nothing but paying the late fees, penalties and interest on debts which we undertook in good faith, but cannot now honestly pay.
- Your credit will be better! This is a tough pill to swallow. Yet, the reality is that when you eliminate your debt, you actual improve your credit score. Generally speaking, 1/3 of your credit score with all three bureaus is based upon the debt to credit ratio. Bad credit always improves with Bankruptcy. Only good credit drops, but usually not as much as you would think and only temporarily. Its not uncommon to be in the 600 to 700 credit range within 1 to 2 years, provided that, after your discharge, you get at least four main lines of credit and keep up your payments.
- Justice requires it! Bankruptcy actually has its roots in Biblical times. In the Old Testament, the “Book of Numbers” required a financial release every 7 years. For centuries, humankind has realized that the forgiveness of debts actually creates a productive society. Risk taking, entrepreneurship, capitalism, etc., are created with these “releases” and “fresh starts.” Our founding fathers found this so important that they actually set forth a “uniform set of bankruptcy laws” in our Constitution!
- There are no regrets! Of all the people I have known who have filed bankruptcy, I have never known ONE person who regretted it. There are, of course, costs to filing bankruptcy. But, I have heard time and time again that the decision to file bankruptcy was the best decision they had ever made. And, what is important to note is that you are always free to repay the debts discharged in your bankruptcy. If you come into money later, or simply change your mind, you can repay your former creditors (and with interest if you want)! The only difference is that you will control the repayment process and will not be hounded, harassed, have your wages garnished or your telephone rung off the hook.
- Garnishments, Liens, and Bank Levies will be avoided! I see this happen so many times. People think they can manage their debts, pay some, forget others, and just try to maintain. Then all of a sudden they go into work one day to find an earnings withholding order has been sent to their employer wherein 25% of their gross income will be taken at the next payday. Or they go to pay their rent and the money has been taken from their bank account. Bankruptcy provides the peace of mind that this will never happen!
While there are many other reasons to file bankruptcy, such as to save a house from foreclosure, save an automobile from repossession, protect a co-signor, structure a repayment plan with the IRS, remove a lien off one’s residence, etc., the fact of the matter is that there is always more good that arises from any bankruptcy than the bad you may have to suffer in the short term.
If you are considering filing for bankruptcy, and are in debt over your head, please take your most recent paystub and list of creditors to an experienced bankruptcy attorney. Ask for advice and be open minded. What you might hear at that consultation shouldn’t surprise you. While the decision to file is usually the toughest decision, once it is made, it is always the most gratifying decision you can make!