Bankruptcy is a big decision, and it’s not one I encourage people to enter lightly. If you have other obvious options to pay off your debt, those may very well be the best choice for you and your family.

But there are some situations in which you might need to file immediately. I see these in my office all the time.

Here are some key moments I’ve seen people choose not to file bankruptcy that have had terrible results:

  1. When you’re dipping into your retirement accounts
  2. When your credit is already devastated, but you’re worried bankruptcy will hurt it more
  3. When your job loss or medical emergency puts you in serious debt but you want to believe it’s temporary