Who should avoid Bankruptcy?
Bankruptcy means something different to everyone. Because we are all different and because our financial situations are different, how bankruptcy affects each of us is different. I believe that the lenders must consider bankruptcy when they lend and when they collect because bankruptcy is the place where we apply additional rules to our agreements to repay loans. Those rules apply whether or not they are mentioned in the loan agreements. How those rules apply is determined by the debtor and his situation. Protection for some may not be available to others or may be available in a different way or form.
Know where you are and where you can be
If debtors attempt to negotiate their debts, it makes sense for them to understand the protections bankruptcy offers, even if they are not considering bankruptcy. Knowing where you would be in a bankruptcy can help you know what is reasonable when attempting to avoid bankruptcy.
Deciding if bankruptcy is right for you
Bankruptcy Attorney Christopher Hittel helps clients explore different options, including bankruptcy, when they are overwhelmed by debt. He recommends bankruptcy only if he believes it is the best choice for your case. Sometimes, debt settlement negotiations with creditors or other alternatives provide a better option.
This decision is based on the law that applies to your financial situation, as well as you personally. This decision requires meeting with an attorney who understands bankruptcy and who is willing to take the time to walk through the issues with you. Going through the status of your assets and income is important. Your potential income and assets are also important. In addition, there might be are personal issues, family, your career, pending lawsuits, inheritance, constructive trusts (which might include assets you didn’t consider to be assets), priority obligations, criminal past, government compliance, type of employment, and so on. Sitting down with an attorney, and honestly and completely answering his questions (bringing up any point which even remotely could be an issue) is generally the best way to start.
However your decision should be based on your amount of debt, income, and monthly cash flow, and if there is insufficient “disposable income” at the end of each month to make a meaningful debt payment. You must also consider whether or not you are acting in good faith. Your decision should be made with an attorney at your side who is willing and able to explain your options as well as the consequences.
To learn about the bankruptcy process check out our “What is Bankruptcy” page for more detailed information.
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