Don't Wait Too Long for Bankruptcy Help
Many people wait longer than they should before consulting a bankruptcy attorney. It is one of the most discouraging things about bankruptcy.
When you start having problems paying your bills, or suffer a financial reversal: lose your job, have a car repossessed, go into foreclosure of your home, or your business starts to fail; you should contact a bankruptcy attorney before you make decisions that eliminate some of the protection or benefits that bankruptcy could provide for you.
Mistakes to Avoid Regarding Finances
Common mistakes that a bankruptcy attorney would try to counsel you to avoid, include:
- Spending your savings, or selling assets, to keep paying your bills, until you have little or nothing left. You are entitled to keep some property. Find out how much.
- Using a home equity loan to pay your credit card debts, or other unsecured loans. This can turn a dischargeable unsecured debt, into a secured debt that you will have to pay, or you may lose your home because you can no longer afford it.
- Paying a mortgage modification company to help you with the debt on your home. Generally it is best to contact your lender directly for a modification – you can do it yourself. The Federal Trade Commission is investigating a lot of mortgage modification fraud.
- Cashing in your IRA, 401K or other retirement account to pay debts. In most states, including Delaware, these assets are exempt and can be kept in a bankruptcy without having to pay unsecured creditors. You should be able to afford to retire at some point.
- Paying on credit card debt, to keep those payments current and avoid higher interest rates, while getting behind on your house or car payments. In order to keep your home and vehicle, you are going to have to pay those payments.
- Taking bad advice, from some one who is not a professional, about what bankruptcy is all about. Advice that you get for free, is generally only worth what you pay. Get advice from a professional.
Bankruptcy laws are designed to give you some minimal protection from creditors. You should not lose the benefit of a full fresh start by making decisions that deprive you of the opportunity to get all the debt relief that a Chapter 7, Chapter 13, Chapter 11, or Chapter 12 bankruptcy entitles you too.
Consider Bankruptcy as an Option
Basically, most people want to avoid bankruptcy, and, too often, they don’t fully consider it as an option until their financial situation is horrible. Get counseling and advice before your situation is hopeless and make informed decisions. You are entitled to hang on as long as you can, but do it knowingly, and with an understanding of what your financial position is as you move forward.
Find an attorney that you can relate to, who you are comfortable with, and who explains your legal rights to you, and get advice from someone who cares about your unique situation and wants to help you.
- This article is provided for informational purposes only. If you need help with a bankruptcy question, click here to consult with James Creed or a Bankruptcy Lawyer near you.