No matter how fiscally responsible you try to be, a temporary job loss, medical emergency, or simple mistake can make keeping up with bills impossible. If careful budgeting or negotiating with lenders can’t help you find solid financial ground, bankruptcy law provides several options to help you reclaim your life from debt. The following guide outlines a few common signs that filing for bankruptcy might be your best option.

How Do You Know When You Should File for Bankruptcy?

1. Creditors Are Unwilling to Work With You

If you’re unable to make the minimum payments on your bills, you may be able to negotiate a grace period or lower interest rate with your creditors. In most cases, lenders would rather receive a portion of what they're owed than nothing. However, some creditors may be unwilling to work with you to find a solution. In this case, discharging the debt through bankruptcy may be in your best interests.

2. Your Debts Are Larger Than Your Income

bankruptcy law

If your monthly income is $4,000, but you have $5,000 in expenses, you may have no choice but to file for bankruptcy. Many borrowers in this situation attempt to juggle debts, but this will only leave you perpetually behind. Bankruptcy law allows you to discharge most unsecured debts—like credit cards, medical bills, or utility bills—freeing up resources that you can put toward building a more stable financial future.

3. You Don’t Qualify for a Consolidation Loan

Consolidation loans can help lower monthly expenses by combining all owed payments into one lump sum and lowering the interest rate. Unfortunately, if you’ve been struggling to keep up with your debts, your credit score may be too low to qualify for a loan. Filing for bankruptcy protection can eliminate these burdens and allow you to start rebuilding your credit.

4. You’re Using Credit to Pay for Necessities

If you’re putting all of your funds toward debt payments, you may have no choice but to put groceries, utility bills, or gas on credit cards. This usually grows your balances faster than you can pay them down, prolonging your financial stress. It also lengthens your repayment time, potentially costing you thousands of dollars in interest.

5. You Can Only Make the Minimum Payments

Minimum payments on credit cards and store charge accounts are designed to maximize your interest, not help you get out of debt. Following those schedules, it could take years to get out of debt. If you don’t have the resources to pay down the principal, filing for bankruptcy gives you a chance to start over.


Since 1984, Riley, Resar & Associates PLL has been helping struggling borrowers throughout Lorain County, OH, get the relief they need. With their extensive background in bankruptcy law and commitment to their clients, you can rely on their team to help you lighten the burden of unmanageable debts. Call (440) 244-5214 to consult with an attorney, or visit them online to learn more about their bankruptcy law services.