How to Know If You Should File for Bankruptcy: A Step-by-Step Guide
- McMann, P.A.
- Apr 23
- 3 min read
Guided Bankruptcy: A Step-by-Step Guide
Are you overwhelmed by credit card debt, student loans, or business-related financial obligations? If you feel like you're drowning in bills and interest payments with no end in sight, it may be time to consider whether bankruptcy is the right solution.
At McMann, P.A., we help individuals in Lakeland, Tampa, Orlando, and throughout Central Florida understand when to file and how to start the process.
This guide is designed to help you perform a basic financial self-assessment to determine whether bankruptcy might be an appropriate path toward debt relief and financial recovery.
Step 1: Take Inventory of Your Financial Situation
Start by looking at the full picture:
What is your total monthly income (after taxes)?
What are your essential monthly expenses (housing, food, utilities, transportation)?
What is your total debt?
Credit card balances
Medical bills
Student loans
Business loans or vendor obligations
Personal loans or contract-based debts
Are you using credit cards to pay for essentials?
Have you missed payments or received collections notices?
If your expenses exceed your income and you’re unable to make more than minimum payments—or you're skipping bills entirely—it’s time to evaluate your options.
Step 2: Identify Red Flags That Bankruptcy May Be Necessary
Common signs that bankruptcy might be the best solution include:
You're only making minimum payments and balances aren’t decreasing.
You’re borrowing from one card to pay another (credit card roulette).
You’ve received collection calls or lawsuits.
Your wages are being garnished, or you’re facing foreclosure or repossession.
Your business is no longer profitable and debt is increasing.
You’ve cashed out retirement savings just to cover daily expenses.
Step 3: Know What Bankruptcy Can and Cannot Do
Bankruptcy can:
✔ Eliminate most unsecured debts (credit cards, medical bills, personal loans).
✔ Stop collection calls, lawsuits, and wage garnishments through the automatic stay.
✔ Help save your home or vehicle if you file under Chapter 13.
✔ Provide a legal path to financial recovery.
Bankruptcy cannot:
✘ Erase student loan debt (in most cases).
✘ Discharge recent tax debt or child support obligations.
✘ Protect assets that are not exempt under Florida law.
Step 4: Consider the Type of Bankruptcy That May Fit Your Needs
There are two common types of personal bankruptcy:
Chapter 7 Bankruptcy (Liquidation)
Fastest and most common form of bankruptcy.
You may need to sell non-exempt assets.
Wipes out most unsecured debts.
Ideal for individuals with little income or no disposable income.
Chapter 13 Bankruptcy (Reorganization)
Allows you to repay some debts over 3–5 years.
Best for people trying to save a home from foreclosure or catch up on payments.
You get to keep your property while paying off debt through a court-supervised plan.
Step 5: Speak With an Experienced Bankruptcy Attorney
No two financial situations are exactly alike. Speaking with a qualified Florida bankruptcy attorney is the best way to assess your eligibility and choose the right course of action.
How to Know If You Should File for Bankruptcy
At McMann, P.A., we offer free consultations to:
Review your income, expenses, and debts.
Determine if bankruptcy is right for you.
Help you understand your rights and what to expect.
McMann, P.A. Can Help You Start Fresh
Whether you're a small business owner burdened with commercial debt, a young professional facing student loans and credit card bills, or a single parent trying to stay afloat, we can help you explore legal debt relief solutions tailored to your needs.
Mark D. McMann
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