We often talk about the benefits of bankruptcy in our blog, as a filing can have a positive effect on those who are struggling financially. 
Some of the most common questions we receive about bankruptcy are about when the best times to file are and when it would be considered the right move. The first thing you should know is that a filing for bankruptcy will have a negative impact on your credit score. However, this may be better than continuing to have to pay off never-ending debts.
Often, bankruptcy is your best option when:
- Your liabilities outweigh your assets (for example, if you are paying for a house that is continually falling in value and your mortgage payments remain high, and you have assets/properties that are hemorrhaging money).
- You have attempted to renegotiate loan terms, or have looked into debt settlement and it has not worked.
- You have experienced a job loss or life event such as an illness that makes it impossible to pay bills
Make Sure Your Bankruptcy Filing Is Right For You
Keep in mind, there are a few different options for individuals when it comes to a bankruptcy filing, as there are major differences between filing a Chapter 7 bankruptcy and a Chapter 13 bankruptcy.
A Chapter 7 bankruptcy filing allows debtors to dismiss certain unsecured debts such as medical bills and credit card debt; however, in order to do so, a person must qualify by passing what is known as the “means test”, which measures your income-to-debt ratios.
A Chapter 13 bankruptcy filing allows debtors to enter into repayment plans, where they are allowed to keep certain assets, while eliminating certain debts after the repayment plan ends. This is a preferred form of bankruptcy for people who do not want to damage their credit as much and want to keep properties.
Source: http://www.wisebread.com/3-times-bankruptcy-is-the-right-move
