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With the condition of today’s economy, predictions are out that more people will face longer periods without a job and even to the point where they exhaust their state unemployment benefits. Usually, when the unemployment occurred, most were deeply in debt owing on several credit cards along with a mortgage worth more than their home. If this is not bad enough, many businesses have failed placing thousands more on state unemployment roles. So for the person unemployed for a lengthy spell, filing for bankruptcy seems to be the only way out. But if this is you, consider some other alternatives before filing for bankruptcy–even if you cannot find a job.

Filing for bankruptcy takes precious time. Filing for bankruptcy will involve taking inventory of your assets and digging for information regarding your liabilities. If you are filing for bankruptcy under Chapter 13, a detailed repayment plan will have to be drafted and approved by your creditors. Of course if you have no job, Chapter 13 is not an option for you because it requires the petitioner to be employed. But figuring out all of these details takes time and money. This is time that could be used looking for employment opportunities or even doing temporary work in order to make money to meet necessary expenses.

Thoroughly understand what judgment-proof means. To put it simply, you are judgment-proof when you have no assets to pay your creditors. Therefore filing for bankruptcy would provide little benefit. This is a person who has no job or is underemployed. This person’s creditors have tacked on so many late fees and interest charges that there is no way they can be paid back. These people have no house because the bank foreclosed on it. Does being judgment-proof mean you cannot be sued by a creditor? The answer is no. However understand that a creditor will only pursue a case in court to its completion if that creditor determines there is a chance for significant recovery of what it is owed. In other words, creditors have been known to file lawsuits and then they are later dismissed when there is no hope for recovery.

When you do get a job, a debt management company can possibly be of help. Although make sure you do your homework on any debt management company that you use. Some have fee structures that are high resulting in less of your money going to the principle of your loan balances. In this case, it will take longer to pay off your debt than it would have if you did it yourself. But, many debt management companies have helpful programs that educate you on new ways to manage your money. Filing for bankruptcy does not educate you in this way.

Not filing for bankruptcy can wear on your nerves. But if you can weather it, you will probably be glad you did in the long run. Everyone knows that one of the biggest benefits of filing for bankruptcy is that your creditors can no longer make annoying telephone calls. You might get a court summons here and there but your creditors cannot directly petition you for the debt once the bankruptcy is filed. While this may seem attractive, it is not without its cost. It is better to have the resolve to just keep looking for work instead of filing for bankruptcy.