Should I File for Bankruptcy?

So you are sitting there in front of your computer and doing a search online as you contemplate hiring a bankruptcy attorney. You have decided it is finally time for you to file for bankruptcy. Now it is just a matter of deciding which bankruptcy route to take and which lawyer to hire. You stumble onto my web site. You call and make an appointment and then walk into my Alexandria, VA office, present your financial situation, and then ask me, “Do I qualify for bankruptcy relief? Which bankruptcy option is best for me?” At that point, you may very hear me say, “Hey, slow down there cowboy (Well, I won’t actually say that out loud). Who says it is in your best interest to file for bankruptcy in the first place?”  The fact of the matter is that just because you have some debt that is troubling you and have the ability to file for bankruptcy does not mean you should.

A few months ago, a young doctor met with me for a bankruptcy consultation (yes, even doctors have to rely on bankruptcy sometimes, as do lawyers for that matter).  She had seen two other bankruptcy attorneys in the Alexandria, VA area and wanted to know if she could indeed qualify for a chapter 7 bankruptcy.  One attorney had said yes and the other had said no.  I was the deciding vote. The doctor went on to inform me that she had one primary large business debt that she could no longer afford and was now being threatened by a lawsuit. Other than this one business debt, she was current with all of her other creditors. What was my diagnosis? Well, the doctor could indeed file for a chapter 7 bankruptcy. But what did I tell her? I said, “Doctor, while I would love to take your money, the fact of the matter is you may not need to utilize bankruptcy at this point.”

Filing for bankruptcy is something that you do as a means of last resort.  Filing for bankruptcy is like using the nuclear option; when you use it, you want to be darn sure that this is the only and best option at your disposal.  I went on to explain to the doctor that she may be better off hiring an attorney that does primarily civil litigation and who might be able to negotiate a reasonable deal with her creditor if a lawsuit was indeed filed. I went on to state that in my professional opinion, if she could reach a reasonable deal with her creditor, using the threat of filing for bankruptcy as leverage in her negotiations, then it would be in her best interest to take the deal rather than file for bankruptcy. If, and only if, the creditor was not willing to work with her, then she could come back and hire me as her bankruptcy lawyer.

I told the doctor that coming to a bankruptcy attorney is like going to a surgeon and asking him/her to perform open heart surgery without even considering other forms of treatment such as medication, exercise, and diet. Sometimes open heart surgery is absolutely necessary and vital, but not always.  Just because you are over your head with financial troubles does not always mean that bankruptcy is your best option.  Sometimes there are other options that will better serve you. Sometimes, you need to stop and ask yourself, “Do I even need to file for bankruptcy in the first place?”  And if the answer to this question is an indeed and emphatic, “Yes!” then by all means, do schedule an appointment to come and see me for a free consultation. 🙂