1. Wage Garnishment
The fact that your wages are being garnished up to 25% by a consumer creditor or sometimes triple that by the IRS is probably a good indicator that a bankruptcy should be considered.
A bankruptcy will stop the garnishment and in most cases deal with the debt.
2. Can you live reasonably and pay your consumer and tax debts off within 5 years?
If you can't than bankruptcy may be a better option. A Chapter 7 is typically 4-6 months long and a chapter 13 partial repayment plan will last no longer than 5 years.
3. Dipping into your retirement funds to stay afloat?
If you are considering the use of retirement money to pay bills, you should consider bankruptcy. Especially when you consider the fact that your retirement account is usually safe from creditors both inside and outside of bankruptcy.
If a consumer creditor has sued you and you are unable to pay the debt or make an arrangement that leaves you enough money to live each month, you should consider a bankruptcy case. Lawsuits become wage garnishments that cause problems in the bank account and at work.
5. Fair market value of Your Home less than first mortgage is owed
If the market value of your house is less than the first mortgage is owed you should be able to treat the second mortgage as an unsecured debt in a chapter 13 case and potentially get rid of most or all of it.
6. Driver's license suspension
If your driver's license has been suspended because of a judgment that is the result of a car accident, a bankruptcy should eliminate your obligation on the debt and allow you to get your license back.
7. Facing foreclosure
If you are behind on your mortgage payments, a chapter 13 bankruptcy will allow you to save the house from foreclosure by spreading the arrears over a 3-5 year period and getting you back to square one with the mortgage company.
8. Worried about losing your car to repossession
A chapter 13 bankruptcy will allow you to retrieve a repo'd car if you move quickly and it will allow you to avoid a repo in the first place. Either way the balance on the car can be paid off over a 5-year period and depending on the age of the loan and the value of the car you may even be able to reduce the amount you pay on the car substantially.
9. Close to retirement but saddled with lots of debt
Your income is going to be reduced as a result of retirement or you just can't stand the thought of using what little extra income you have to deal with debts. This may be a good time to consider bankruptcy.
10. Income Tax Debt that is more than 3 years old
Income tax debts that are older than 3 years and for which you have filed a tax return more than 2 years ago, may be dischargeable in bankruptcy. The date calculation can be more complex than it appears, but if you meet the requirements and the tax debt and/or other debt is high enough to warrant a bankruptcy filing you should consider it.