Are you considering filing for bankruptcy? Maybe you’ve gotten in over your head with bills, you’re accruing an enormous amount of interest, and you can’t seem to pay it down fast enough.

If you’re thinking about bankruptcy, you’re probably in a tough financial situation. If you’re never had to file for bankruptcy, take the following into consideration.
 
1. Can you afford to file for bankruptcy?
 
It might sound strange to ask yourself if you can afford to file for bankruptcy, considering filing is a way of saying you’re basically broke. However, you’ll need some money to pursue bankruptcy.
 
“Many debtors don’t realize the cost of filing for bankruptcy,” says Devin Sawdayi, a bankruptcy lawyer practicing in Los Angeles. “They’re often taken by surprise when they learn they need to enroll in credit counseling and debtor education classes before they can even file their petition with the court.”
 
Among the expenses you’ll incur when filing for bankruptcy are:
 
·  Court fees, including filing fees and administrative fees
·  Lawyers’ fees
·  Credit counseling
·  Debtor education classes
·  Possibly other fees
 
Before you file on your own or talk to an attorney, prepare yourself for some significant fees associated with your bankruptcy.
 
2. Avoid taking out a loan to cover bankruptcy expenses
 
If you don’t have the funds to cover bankruptcy expenses, you might be considering a loan. That’s almost never a good idea. When you take out a loan before filing for bankruptcy, it’s likely to be discharged with your other debt. Knowing you’ve taken out a loan can make the court look down on you and could possibly prevent you from being granted your bankruptcy.
 
In addition to making you look bad, if your loan is excluded from your discharged debt, you’ll have to pay it back in full. If you can’t afford to pay your current debts, you might struggle to pay back your new loan. If that happens, you’ll just end up in debt again.
 
It’s not worth using debt to get out of debt. If you must borrow money to cover your bankruptcy expenses, consider asking a supportive friend or family member who won’t charge you interest and won’t mind if you take your time to pay it back.
 
3. Do you qualify for bankruptcy?
 
This is a big question to ask. You might be under the impression that any amount of debt will qualify you to have your debt discharged, but that’s not the case. For instance, as an individual, there are two main types of bankruptcy you can qualify for: Chapter 7 and Chapter 13. Although you probably have Chapter 7 in mind, which discharges all debt, you might not qualify.
 
A Chapter 7 bankruptcy will discharge your debts and you will owe nothing. A Chapter 13 bankruptcy will discharge some of your debt and rearrange the rest of your debt with a repayment plan over three to five years.
 
Which chapter you qualify for will depend on a variety of factors. For instance, you need to meet specific income requirements to qualify for Chapter 7. If you make too much, you won’t qualify.
 
The amount of your debt also matters. While you can technically file Chapter 13 when owing just $5,000, it’s not recommended. You could end up spending that much money just to complete your bankruptcy. Also, under Chapter 13, you can’t get into debt or sell property, which means you couldn’t sell anything to cover your fees once you file.
 
4. Are you willing to pay back your debts?
 
Chances are, unless you meet the income requirements for Chapter 7, you’ll be entering into a new debt repayment plan through the court. Are you prepared to pay back your debts under a new repayment plan? If you struggled to pay your debt before, you’ll probably struggle in the same manner. However, that’s where your credit counseling and debtor education classes will help.
 
If you file for bankruptcy, be ready to apply what you learn in your classes to pay down your debt. You don’t want to get behind on your repayment plan and remain in debt.
 
Should you file for bankruptcy? That depends
 
Are you struggling with debt, in over your head, and trying to figure out if you should file for bankruptcy? Before filing, consider the points outlined in this article. However, always consult legal counsel before making any decisions. An attorney can help determine what’s right for you.