When do you know it is time to file for bankruptcy?

There is no magic formula. You can keep doing whatever it is you are doing and not file. You may consider the amount of money you are paying out every month in credit card payments, and conclude this is money down the drain with no end in sight. But this is a fair amount of debt, and you should not ignore the option of starting all over again with a bankruptcy fresh start. Consult an attorney or several in your area. You can find one on or use the link below to find one.

With the limited information supplied, it appears that chapter 7 may be needed. However, the best way to answer your question is to take advantage of a free initial consultation with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases even if you think you need to file under chapter 7. Become educated on all the issues involved and related to your current economic situation, find out the advantages and disadvantages for filing under each chapter and use an attorney that can help you make the right decision for you. Most bankruptcy attorneys will meet with you at no charge for the initial appointment. You can use the "Find a Lawyer" link at the top of this page to search for an attorney. Some of the factors that the attorney will consider are: 1) total amount of unsecured debt such as credit card debt, medical bills, personal loans, old utility bills, etc.; 2) total amount of secured debt such as auto loans, house mortgages and loans that have other items as collateral; 3) for loans made to purchase autos and other personal property in which the collateral are the purchased items, did you purchase the auto more or less than 2.5 years ago or did your purchase other personal property more or less than one year ago; 4) what is the interest rate on you secured loans and would a reduction to around 5.0% help you significantly; 5) for the tax debt is the debt dischargeable in a chapter 7 or chapter 13, and if not, would discharging the penalties in a chapter 13 and stopping the interest from running on the tax be a significant savings; 6) your projected income and expenses and you means test income and expenses, which considers your average income over the past 6 months; 7) what assets do you own that are exempt and what assets that you own that are not exempt; 8) is your income subject to being garnished by a judgment creditor if you decide not to file; and 9) your current credit score, which if it is already extremely low now, your score could be helped by filing and doing the right things to rebuild your credit after entry of the discharge order in your case.

Before a court enters a judgment to garnishment or to place a lien against your property, I would think. When you owe half your annual income in debt, bankruptcy is virtually inevitable. Hope this perspective helps.

There is no magic formula. You need to look at your entire financial situation, including possessions and money in the bank. There are other considerations: are there pending lawsuits against you? are your accounts or wages being garnished? is your salary going to increase in the future? The only way to fully answer your question is for you to review your situation with a local bankruptcy attorney. Most will offer free or reduced cost consultations. Good luck.

Timing is important. Your question is a difficult question to answer without knowing all your circumstances, assets, credit and financial history, and future prospects. The decision whether to file bankruptcy and, if a filing is advisable, when to file, depend on more than just your income and amount of debt. You should consult with a local bankruptcy attorney to discuss your options and the best course of action.