Sunday, September 18, 2011

When You Should Consider Finding A Bankruptcy Attorney

Many people are continuing to face financial hardships in our unstable economy. So, what signs should you look for to indicate whether you should look at filing bankruptcy? This blog addresses some of the signs or signals one should look for in determining whether they should seek financial advise from someone, including the advise of a bankruptcy attorney.

Although everyone knows that numerous bankruptcies were filed in Florida in 2010, what some might not know is the Middle District of Florida had one of the highest filing rates in the country, behind a district in California. In 2010, Florida had 110,304 bankruptcies filed seeking protection and/or relief under the Bankruptcy Code.

Bankruptcy should be viewed as a last case alternative to relieving debts, and as such, bankruptcy is not for everyone. There are also some debts that survive bankruptcy. Bankruptcy, under current law, remains on ones credit report for 10 years after the end of the bankruptcy. But, even though it should be considered a last case alternative, waiting too long to file and a lack of financial planning, can cause additional problems. If you are worried about too much debt, you should seek the advise of a local bankruptcy attorney to explore various options.

The first, and most obvious, sign you should look for is whether you are solvent; that is, are your debts higher than your assets. Generally, when one achieves this level of indebtedness, payments begin to arrive to creditors late, driving up late fees and, in some cases, interest rates.

Just because you have a lot of debt, in an of itself, does not necessary necessitate the filing of bankruptcy. You should also look at the class of the debts. For example, how much of the money you owe makes up secured and unsecured debts. You should look at what comprises your debts, such as credit card bills, medical bills, mortgages, car loans, tax liability, restitution, student loans, etc. Then the attorney will have to consider, among other things, which debts are likely to be discharged compared to which one are not likely to be discharged. It is also important to know when and how the debts occurred.

Other things you should consider is whether you have been able to get a handle on your debts through negotiating with the creditors, or whether a legitimate alternative debt relief company has been able to help you. Keep in mind that most “debt settlement” and “foreclosure rescue” advertisements are scams. There have been a proliferation of these companies as the economy turned South. Do not pay these companies an up front fee, and only deal with legitimate established credit counseling organizations. If you found one of these companies have not been able to help you, your next step may be looking at bankruptcy as a possible alternative.

Sometimes creditors actions will cause you to look at bankruptcy. They may be threatening to sue you, or tell you the account has been forwarded to their attorney. These are flashing signs saying you should look at bankruptcy. Waiting too long can possibly lead to a loss of your assets or wage garnishment. But keep in mind that this could also lead to an alternative of seeing if the creditor has been violating the Fair Debt Collection Practices Act, which may be able to serve as a defense to the law suit, or grounds for filing your own law suit against the creditor.

One should also look at their personal stress level. High stress can lead to many problems including health and family problems. Although it is rarely published in the media, many people file bankruptcy seeking relief of stress based on ones financial situation, sometimes combined with unscrupulous debt collectors.

Many people make the mistake of waiting too long to properly plan on the filing of bankruptcy with the assistance of a local bankruptcy attorney. Proper planning is crucial, in most situations, in order to preserve assets and discharge debts. Many people try to do what they think should be done to prepare for bankruptcy, only later to find out that they did exactly the opposite of what they should have done. This is partially because most people believe the bankruptcy code is logically drafted, which is not necessarily true. Doing things to help yourself, or creditors, can actually end up hurting you. Seeking the advise of a local bankruptcy attorney is very important.

If you are concerned about your debts, there are plenty of attorneys that offer free bankruptcy consultations. It is much better to seek advise of a bankruptcy attorney early rather than later.

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