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Determining whether to file for bankruptcy: What not to consider

Colorado residents deep in debt may find themselves stuck between a rock and a hard place. With monthly payments mounting up and a limited income to meet those payments, it can seem impossible to find a way out of debt.

Fortunately, individuals who find themselves in this situation have some options to eliminate debt, starting with the option of filing for bankruptcy. An individual bankruptcy can wipe out the debts carried by the person, such as credit card debt or medical debt that has accumulated over the years.

Yet, for all of its benefits, some individuals still hesitate in deciding whether bankruptcy is right for them. To be sure, bankruptcy is not for everybody, as certain individuals may not meet the eligibility requirements or may simply not have enough debt to make it worth the process of going through bankruptcy.

While there are real factors that should be considered in deciding whether to file for bankruptcy, individuals should also be careful they do not let outside influences make the determination for them, particularly when those outside influences may or may not even have any truth to them. For example, some may be fearful that they will lose their job or not be hired because they file for bankruptcy. While credit checks may be part of the employment hiring process, there are typically laws that prohibit discrimination against an employee because of the person's bankruptcy.

For example, the government may not discriminate against a person by terminating them from employment or with respect to hiring. Private employers, too, cannot typically discriminate against a person in the employment arena if the discrimination is based only on the filing itself. Accordingly, individuals have protections in these areas, and they should be careful to ferret out factors that are truthful, such as the eligibility requirements above, from those factors that should not play a part in making the decision of whether to file for bankruptcy.

Source: Fox Business, "Should I file bankruptcy for $12k debt?" March 7, 2014

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