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When does it make sense to file for bankruptcy?

A resident of Salem, Massachusetts, who is struggling to feed his or her family under the weight of mounting debt may not want to file bankruptcy, seeing it as kind of a last resort for someone who is truly desperate.

It is true that bankruptcy will affect a person's credit score which means, in turn, that a person will have a much harder time getting that all-important loan that is often vital to maintaining a good standard of living.

However, no one should feel the need to wait until things are truly dire before seeking out debt relief through a Chapter 7 or Chapter 13 bankruptcy. There are many situations in which it is not advantageous to delay filing for bankruptcy.

For example, should a family realize that its debts exceed all of its assets combined, then bankruptcy may be the best available option for debt relief. This is especially true if the family's income comes up short of necessary expenses, a situation that effectively digs the family deeper and deeper into a financial pit.

Sometimes, a family may be willing and able to pay off a debt or even multiple debts, but a creditor gets greedy and demands a payoff that will effectively mean the family won't be able to function financially. If a creditor isn't inclined to flexible, even the credible threat of a bankruptcy might get the creditor to change its position.

Finally, Massachusetts residents should feel no shame in filing for a bankruptcy in the event of an unforeseen financial catastrophe that could happen to anyone. An unexpected loss of employment or a significant medical problem can affect any family, and bankruptcy is there as an option for those families.

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