“How do I know when to file bankruptcy” was David Leibowitz’s topic on the Bankruptcy Law Network.  I don’t quibble with his list of ten events that say “it’s time to file”, but, my God, if you wait for those events, you’ve suffered far more than necessary arriving at the decision to get a fresh start.

My charge to clients is “don’t wait til it hits you over the head”.  Look, cold eyed, at your situation, before you are garnished, before you can’t pay your living expenses, before you endure the collection call gauntlet.

Once you can see that you cannot provide for yourself, your dependents, and your retirement and retire your dischargeable debt, that’s the time to decide to file bankruptcy. If you cannot pay off the debt in full outside of bankruptcy, then waste not another dollar making minimum payments.  Spare yourself the stress and worry of trying to do the impossible.

Long before the current financial meltdown, I have urged clients to dump the debt, and put the money that you’ve  been using to make minimum payments toward having a savings account and a plan for retirement.   Stop pretending that pounding your head against debt you can never repay is a sign of character.

Personal responsibility says that you are in charge of seeing that you are financially independent, now and into your old age.  A bankruptcy discharge may be the first step on that path.