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Should You File Your Own Bankruptcy Petition?

In Uncategorized on July 28, 2010 at 8:47 pm

Do you need a lawyer to file bankruptcy? It depends – would you be willing to fly an airplane without a pilot’s licence? Trying to file a bankruptcy petition without a lawyer, especially after the complex changes to the bankruptcy laws in 2005, would be a lot like trying to fly an airplane just because you read a book on the subject. You’ll gain some knowledge of the mechanics involved, but it’s guaranteed that you simply won’t be equipped to handle the unforseen events that will inevitably occur once you start heading down the runway. It’s possible you won’t kill yourself, but the odds are against you.

Heck, even a good many lawyers screw up bankruptcy filings these days because of all the complicated requirements under the new laws. Don’t listen to the do-it-yourself services or self help books that try to convince you bankruptcy is just a matter of filing a few routine forms. They are not trained professionals giving you trusted advice, they are people trying to sell you something so they can make money. Paralegal services and petition preparers are prohibited from giving you any advice. They can type up the forms for you, but they can’t tell you which Chapter to file, how to protect assets, how to remove liens, or what property is covered by exemptions.

Trust me on this, it’s what happens after you file the routine forms that matters. People have been known to lose their home because they didn’t understand their rights. Furthermore, there are all sorts of requirements to file documents with the court, and to provide documents to the trustee prior to the court date. Failing to comply with any number of these requirements will result in your case being automatically dismissed. There’s a lot that can go wrong after you file, and no one will be there to help you if things get rocky. Bankruptcy is an adversarial process. That means that the trustee assigned to your case is not looking out for your best interests. The trustee represents your creditors, and gets paid whenever he can sell your property, so don’t look for anyone to cut you any slack. The trustee wins when you lose.

I can tell you from my experience that almost everyone who tries to file their own bankruptcy case ends up hiring a lawyer to straighten out the mess, so you’re simply better off saving time and money by hiring a competent lawyer to help you right from the start.

Am I in Financial Trouble Yet?

In Uncategorized on July 27, 2010 at 9:24 pm

Your finances aren’t going so well. Your feeling that your debt is out of control.  How do you know if you should consult with a bankruptcy lawyer?  Well, there are three tell-tale signs that your financial problems are severe enough to consider bankruptcy.

1.    UNSECURED DEBT GREATER THAN ANNUAL INCOME:  This is a general rule of thumb that may not apply in all situations.  However, if your unsecured debt ( generally credit card, personal loans and medical debt) total more than your annual income, then bankruptcy should at least be considered as a way of getting a fresh start.  Of course, every situation is different.  If you think that there is room to cut back on expenses, you might be able to work your way out of debt over several years, but only if you remain financially disciplined.  You must be prepared to say no when your teenager insists she absolutely needs those $200 shoes that all her friends have.  Working a second job is exhausting, and most people won’t have the energy to sustain a grueling work schedule for very long, so you need to be realistic about what you can do to make extra money.

2.    CONSTANT COLLECTION CALLS: If your finances have gotten to the point where bill collectors are camping out on your front lawn (or at least call you on the phone several times a week, if not daily), then you have definitely lost control over your finances, and you need to get advice from a qualified attorney about whether bankruptcy is the right option. Collection calls mean that your losing ground and need help.  Under the law, collection agents aren’t allowed to harass you, but they can call you on the telephone enough to make your life miserable, and unless you’re the kind of person that easily shrugs off such intrusions, something needs to be done before your situation gets any worse.

3.    LAWSUITS, WAGE GARNISHMENTS, REPOSSESSIONS AND FORECLOSURES: At this point, there’s no sense in denying your financial troubles.  You’ve been delinquent on your debts for quite some time, and your credit is already trashed.  Bankruptcy can only help you from this point, by allowing you to start over, and begin building for the future again. In the case of foreclosure actions, bankruptcy can help you get caught up on past due mortgage payments under the Chapter 13 wage earner plan so that you can keep your home.  There is no reason to continue suffering when the bankruptcy laws give you the opportunity for a second chance.

Proposed Law to Limit Debt Settlement Scam Artists

In Uncategorized on July 27, 2010 at 7:47 am

The Debt Settlement Consumer Protection Act of 2010 may soon put predatory debt settlement companies out of business. By now, most people have seen the numerous ads claiming to settle outstanding credit card debt for pennies on the dollar. Reducing debt without having to file bankruptcy is an almost irresistible advertising message for the tens of thousands of people across the country who are suffering with overwhelming debt. The only problem is that, instead of helping people get out of debt, these companies usually succeed only in driving people deeper into debt, while at the same time pocketing huge up front fees for a service that doesn’t deliver what it promises. The proposed new law will effectively put an end to the scam by prohibiting up front fees, and only allowing debt settlement companies to charge fees after they settle a debt. Since most debts are never settled by these companies, they will be effectively put out of business, and that’s a good thing for the American consumer. Right now there’s no word on when the bill will pass, so in the mean time, educate yourself on debt settlement scams by visiting links at http://www.barrysternberg.com/Bankruptcy_Alternatives.html