Money 411: Personal Finance Tips & Advice

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Filing for bankruptcy is a big decision that should not be taken lightly. It can impact your financial future for years to come because after filing for bankruptcy, it is common to be denied a bank account or pay more for car insurance.

On the other hand, bankruptcy can allow those who need it to start fresh and regain control of their financial lives. Medical bills, lost job or other major life-changing events often precipitate bankruptcy. So, how can you decide if filing personal bankruptcy is the right decision? There isn't a one size fits all answer. Use this helpful checklist to help you begin discussing it with a reputable attorney.

1. Add up your debt. Stop ignoring it and pretending it will go away -- it won't. Instead, sit down and add up what you owe. Write down the minimum monthly amount due and the total amount due.

2. Add up your assets and income. Are you able to pay down or manage your debt with your current income? If not, can you sell something or get a second job to get caught up on your bills?

3. Would a debt consolidation loan help?

4. Seek professional assistance.

5. Decide what type of bankruptcy is right for you: Do you want to keep some of the items or are you more concerned with eliminating all of your debt? A bankruptcy attorney can explain what is allowed in your state.

6. Understand what won't be wiped out. Some debts cannot be eliminated by bankruptcy. Common examples include child support and student loans.

7. Decide who will file -- both spouses or just one.

8. Decide what you will keep, if anything. It varies from state to state, so understand what is allowed in your area.