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I can’t pay my debts. Can I file for bankruptcy?
You may be able to file for bankruptcy, but make sure it’s your last resort. Filing for bankruptcy takes a financial and emotional toll for years to come. Every time you apply for a loan, a credit card, or even a job, the bankruptcy on your credit report can come back to haunt you. In addition, the new federal bankruptcy law makes it harder to file for chapter 7 bankruptcy, the provision of the bankruptcy that lets you wipe the slate clean. The new law establishes "means testing" so that if you have some ability to pay off creditors, you will be required to file for Chapter 13 protection.Before you file for bankruptcy, seek help getting your finances back on track. For example, the Consumer Credit Counseling Services is a national nonprofit group that offers debt-repayment plans and advice at little or no cost.MSN Money’s "Guide to Personal Bankruptcy" offers more information on the topic.Return to Questions
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