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Bankruptcy

Avoiding debt and how

Bankruptcy should be the last resort

As you may know, negative information stays on your credit report for 7 years, except for bankruptcy, which will stay on your report for ten years. While you may be trying to do everything possible to avoid ruining your credit record, there are some instances---such as job loss or illness---that force consumers into seeking protection from creditors.

 

Read the story here:

http://ezinearticles.com/?Bankruptcy-Tips---Why-Bankruptcy-Should-Always-Be-the-Last-Option&id=3487531


Should Filing Bankruptcy Be The Last Resort?

 

Is Bankruptcy Always a Last Resort?

Although we’ve mentioned it time and again on the forum, it bears repeating: filing for bankruptcy is not a decision to be entered into lightly. In fact, it is important to get good information and carefully weigh your options. Having said that, delaying too long can cause unnecessary financial strain and serve to compound existing problems. Is bankruptcy always the last option?

Some of the common things consumers do before they consider bankruptcy include:

• Cash out their retirement funds to pay debt
• Pay a debt settlement company to settle their debts
• Settle their debt by dealing directly with the creditor or its attorney

In some cases, these bankruptcy alternatives can be just what the doctor ordered, however in others they can put you in deeper trouble without meaningful debt relief.

 

Depleting Your Retirement To Pay Debt

Selling assets to avoid bankruptcy is often a bad idea and a retirement account is no expection. As Topeka bankruptcy lawyer Jacob McElwee points out:

The fact is that the recession is causing a lot of people to file for bankruptcy who never thought they would. While the recession is is undoubtedly a sad turn of events, I am also seeing an even more disturbing trend. Namely, a lot of them are selling all of their property in an effort to stay current with their bills and avoid filing for bankruptcy. By the time they come to me, they have already gone through everything they own. While these efforts are always well-intentioned, they are catastrophic for their finances. In a lot of cases, people are selling assets that they would otherwise be able to keep if they would have thought about filing for bankruptcy a little sooner.

Perhaps nowhere is this point better illustrated than in the context of a retirement account. ERISA qualified 401(k) accounts and many IRAs are completely exempt in bankruptcy. This means you can file bankruptcy, shed your debts and keep your retirement. As Jacob describes, it is always difficult to see someone liquidate their retirement only to be forced into bankruptcy a few months later. For more information, see: Retirement Savings and Bankruptcy.

 

Debt Settlement

Debt settlement companies promise the world but rarely deliver. They often charge fees that far exceed the cost of bankruptcy and actually require their clients to go deep in default in order to settle their debts. Here is how the process works: you, the debtor, stop paying on your credit card accounts and other bills and instead save some of the money. When you’re deep enough in default, the creditor has written off the debt and may agree to accept a reduced payment in satisfaction of the balance. You fork over the money you’ve saved plus a hefty fee and you’re out of debt. That’s how it works sometimes, but definitely not all the time. While you’re waiting on the debt settlement company, you’re creditors are definitely not waiting on you. They’re reporting delinquencies on your credit. calling and sometimes actually suing to collect. By the time you’ve reached your debt settlement goals, your wages may already be in the process of being garnished or a judgment might have been entered against you. Sure, filing for bankruptcy can help with most of these problems, but why wait?

 

Negotiating With Creditors

While the debt settlement waiting game is expensive and often ineffective, sometimes negotiating directly with creditors can be a nice alternative to filing for bankruptcy if you already have the cash to make a deal. If you stand to have more assets liquidated in bankruptcy than you’d save in debt, dealing with the creditor through an attorney can often result in signifcant savings and a permanent solution to the problem. In these cases, bankruptcy may very well be your best option. For example, let’s say you owe $50,000 on a delinquent business loan but have $150,000 in cash and stocks. Filing for bankruptcy would result in the trustee liquidating your stock portfolio to pay your creditors, in fact, they’d likely get paid in full. In these instances, it makes much more sense to negotiate a reduced payment directly with the creditor.

 

Fresh Start

The purpose of bankruptcy is to provide those struggling with debt a fresh start. Sometimes, the bankruptcy card is only to be played as a last resort, however, in some cases it offers the most thorough relief on the best timeline. Each situation is different, if you’re contemplating bankruptcy, be sure to meet with an experienced attorney.



Surviving

the

Emotional

Effects

of

Bankruptcy

Read this Story below
http://bankruptcy.findlaw.com/bankruptcy/more-bankruptcy-topics/emotional-bankruptcy-effects.html


 

The Advantages that Bankruptcy Lawyers Bring to Your Bankruptcy Filing

If you are in the market for a quality bankruptcy lawyer then chances are you’re not in an ideal situation. However, you’re doing the right thing by attempting to improve your situation with the help of a licensed bankruptcy lawyer. It is strongly recommended that anyone facing bankruptcy find a licensed bankruptcy lawyer they trust. The reason for this is that the bankruptcy filing process can very complicated and filled with loopholes so you’ll want to be sure that you’re getting the most out of your bankruptcy in every way possible.

 

What Bankruptcy Lawyers Do


You get what you pay for and a bankruptcy lawyer will make sure that you do not entangle yourself in further financial disarray so paying a bankruptcy lawyer can be money well spent. A few of their most important contributions to you and your bankruptcy include:

•    Determine whether or not bankruptcy is right for you and, if so, whether Chapter 7 bankruptcy or Chapter 13 bankruptcy is the case
•    Know the federal bankruptcy laws as well as the bankruptcy laws specific to your state from front to back
•    Be at your side in bankruptcy court and present your case to the judge
•    Accompany you to creditor meetings
•    File all paperwork in full and on time

Where to Find Bankruptcy Lawyers


There is no shortage of bankruptcy lawyers out there so you might consider finding one to be a simple task that is easily completed. However, it’s not the quantity of bankruptcy lawyers that’s the problem. It’s is the quality of bankruptcy lawyer you should be concerned about. If you already have a lawyer then you should ask him or her for a referral to a lawyer who specializes in bankruptcy. You should also talk to your family, friends, and co-workers to see if any of them has had experience with a bankruptcy lawyer whom they can recommend.

You should not settle on the first bankruptcy lawyer you talk to. Just like when it comes to shopping for anything else it is best to compare and contrast your options in order to ensure that you are getting the best bankruptcy lawyer for you. After talking to several bankruptcy lawyers about your situation you can decide which one showed the most genuine concern as well as conveyed the appropriate knowledge of bankruptcy proceedings.

So now that you know what bankruptcy lawyers do and where to find them you can contact one today in order to kick start your bankruptcy filing. You might not be thrilled about it but sometimes it’s what needs to be done in order to continue living your life the way you want to.


What You Need to Know About Bankruptcy Attorneys
 

Helpful Links for Information on Bankruptcy

http://www.uscourts.gov/bankruptcycourts.html

http://www.bankruptcyhome.com/

http://www.law.cornell.edu/wex/index.php/Bankruptcy

http://www.nolo.com/resource.cfm/catID/462A9501-9B21-4E09-A08C5A7B8AF51A79/2

http://www.bankruptcydata.com/

http://www.bankruptcyinformation.com/

http://bankrupt.com/

http://www.bankruptcyaction.com/

 


Google

 
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Images found for this site found from the following sources:
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Stop Big Spending -Copyright December 2006