Why Bankruptcy? Should you file one?

Are you a candidate for bankruptcy?
Malik Ahmad Attorney at law. You can call and make an appointment for free bankruptcy consultation by calling 270-9100. A free bankruptcy consultation would give you all the choices you like to have, and in some case it may not be a good idea to file bankruptcy. For more questions and information please see his website

Bankruptcy is a legal remedy, and as such only an attorney can properly recommend you on the process. Attorneys by virtue of their training and knowledge has wealth of information in this regard, and can analyze your situation in multifarious perspective. A paralegal may or is allowed to fill up forms. Of course they charge little money because they are not entitled or allowed to give legal advice which is very conducive in these matters. Afterall, a bankruptcy would effect all of your life, your marriage, your property and your financial relationship with your creditors. You can save few hundred dollars initially by engaging a paralegal but this saving is temporary and only short-sighted because a bankruptcy has long ramifications. If he try to tell you the difference between Chapter 7 and Chapter 13, he would be conducting legal practice, and shall be subject to either prosecution or discipline. However, as far as being a candidate for the legal process, that is another question. My experience has been that the decision is based partially on facts, partially on emotion and partially on a person’s view of their future.

There are no hard and fast rules to determine if you are a candidate for bankruptcy. Check your balance sheet and the number of phone calls you received everyday from your creditors. Does the phone start ringing from early morning to late evenings? Everyone’s financial/emotional/future situation is different and one person with $40,000 in debt who can sleep at night and sees great future opportunities for themselves may be able to do what it takes to pay it off. On the other hand, another person with the same amount of debt may be bouncing off walls and feel their future is hopeless under the present set of circumstances and have no other choice than to declare bankruptcy.

Understand the consequences

What is most important to keep in mind is that bankruptcy should be used with caution and a full understanding of the consequences. I think of it in the same vein as using nuclear weapons. It gets the job done, but at a potentially high cost, and with some fallout! Review the information below and then seek professional advice from a person or organization you trust.

Financial

Looking at the three points briefly there are financial, emotional and future implications to consider. First, do the math on how much you owe, what are the payments, what income can you devote to the payments and whether or not you can free up or get more/enough income.

Emotional

Second, rate your emotional position. Can you stand being in debt any longer? Are the creditor calls getting to you? Can you sleep at night; are you fighting with your spouse?

Your Future

Third, assess your future prospects and the consequences of a bankruptcy. Bankruptcy can have an effect on promotions, new job applications, renting a new apartment, insurance, your ability or cost to make major purchases. Do you see your life as on an upward trend or a downward slide? What are you goals for the next two to 10 years?

Seek Counseling First

One way to assess if you are a candidate for bankruptcy is to seek credit counseling. A credit counselor will review your financial situation thoroughly and make recommendations based on your goals and ability to pay, based on his or her experience as a certified financial counselor. You should leave the meeting with a clear understanding of the best course of action for your situation and an explanation of the alternatives. Clearly, you can’t do this in 20 minutes, so be sure your counselor is willing to spend however long to takes to get you to a conclusion.

Are There Any Alternatives to bankruptcy?

There are many alternatives to bankruptcy, including settling your debts for less than what is owed, borrowing from a family member or friend and debt-management programs to name just a few. They are all worth checking out before committing to bring in the big guns!

A last word, from my own experience. You need to learn financial discipline and get some real education. Watching good financial program, and reading financial magazines would be a good start. One should watch nightly business news with regularity. Readl Wall Street Journal or any financial magazine. Open a dummy account in stock market and watch out the flow of the market everyday. Keep yourself informed on every financial issues.

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