David John MarottaDavid John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com
Host: How do I know if I should consider declaring bankruptcy?
David Marotta: There are a few indicators to know whether or not you should declare bankruptcy. If paying off the debt would cause a long term harm to your family, if you are unemployed or you have been unemployed, if you are retired and you are living on a fixed income, if you have become disabled and your prospects of a quick recovery are not very good or if you have in surmounting medical debts. These are all indicators that bankruptcy maybe the right option.
If you are able to get out from under bankruptcy; if you take your total debt and if you can pay 2% of that debt every month, you have a hope of getting out of bankruptcy, but if you add up your total debt and you look at what 2% is and you can t afford to pay that every month, you are probably headed for bankruptcy.