What is your bankruptcy ‘DEFCON’ level?

What is your bankruptcy ‘DEFCON’ level?

There are DEFCON levels to categorize your financial picture! We’re all familiar with the cultural meme of DEFCON levels, right? I have a 19 month-old son, and when he he loses it because he can’t reach his “baba” or his “dada” won’t let him play with a sharp object, my wife always says, “he’s at DEFCON 5!”

Actually what she means is DEFCON 1; DEFCON 5 is the lowest state of alert, not the highest. But I won’t fault her for her mistake, I had to look it up myself before writing this.

Anyway, as I’ve mentioned before, Bankruptcy can be a powerful tool, but it is also a drastic measure. If you’re considering bankruptcy, talk to a Utah Bankruptcy Attorney to determine whether it is the best option for you. Here is the scale that I use:

DEFCON Circumstances of your financial situation: Bankruptcy ?
5 Smooth Sailing. Your bills are paid on time and you have insurance and savings to carry you through crisis. NO!
4 Fear losing your job, can’t pay off the total balance of your credit cards each month, do not save money each month. Probably Not
3 Falling behind in some payments of secured and unsecured debts, some bills are not paid each month, receive calls from collectors. Maybe
2 Are more than 2 months late on some bills, use new credit cards to pay minimums on other cards, have pending lawsuits, have total debt that you can’t pay off in less than three years, have been out of work for an extended time period. Probably
1 Have both secured and unsecured debts that cannot be paid, wage garnishments, bank account attachment, facing car repossession, facing foreclosure, have no income. YES!

This chart might give you a good idea about whether bankruptcy is a good option for you. Keep in mind that there are some situations where you are at DEFCON 4, but bankruptcy is a good idea because of the particular circumstances of a certain debt. Likewise, there may be individuals at DEFCON 2 for whom bankruptcy is not the best option.

As always, if you are considering bankruptcy, give me a call so we can talk about it.

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