When Bankruptcy Is The Best Decision
The worst thing about filing bankruptcy is agonizing over the decision to file. Many people worry about under-going a grueling investigation concerning their finances, losing everything they own, and having to deal with a very public court proceeding. The truth is that bankruptcy can be the best decision for someone drowning in debt.
Once you decide to file bankruptcy, you will discover that the procedure is very simple and straight-forward. The bankruptcy process essentially breaks down to an accounting to determine whether you have sufficient assets or income to pay something to creditors. If you do, then your creditors will receive some payment and the rest of your debts are discharged. If you don’t, then creditors receive nothing and are discharged. There are a few narrow exceptions to discharging debts, like student loans, child support, and recent taxes, but most debts are dischargeable.
Nearly all those who file bankruptcy are able to keep all of their property. The United States Trustee Program reports that nationwide only around four percent of all Chapter 7 bankruptcy cases have assets that are turned over to the bankruptcy trustee. That means one case in twenty-five may have non-exempt property that is taken and sold to pay creditors. An experienced bankruptcy attorney is able to identify assets that may be at-risk and will advise the client regarding options for protecting the asset from turn-over.
Many people are unaware that the bankruptcy process is quite private. The press reports on celebrities who file bankruptcy, but unless you are famous or infamous, you will likely not receive any attention. Newspapers no longer publish the names of individuals who file bankruptcy. Notice of your bankruptcy is sent to your creditors, but not to your friends, family, bank, or your employer (unless you owe money to them).
The typical debtor never sees the bankruptcy judge, and there is generally one meeting with a bankruptcy trustee. This meeting will take place with other debtors and, while it is open to the public, it is rare that anyone other than debtors, attorneys, and an occasional creditor attends this meeting. Most clients report being very nervous about meeting with the bankruptcy trustee, and are surprised at how fast and easy the meeting actually is.
Many clients confess that bankruptcy was the best decision to discharge overwhelming debt. Once the burden of debt has been lifted, you feel better and your financial condition can begin to improve. If you are struggling with debt, speak to an experienced bankruptcy attorney and learn how the federal bankruptcy law can provide you with a fresh start.
BBB Warns of Debt Relief Fraud
The Better Business Bureau recently issued a warning to consumers regarding the misleading practices of debt settlement companies. This warning comes after receiving more than 3,500 complaints since the start of the recession in 2007. The BBB reports that many individuals paid hundreds of dollars in upfront fees to debt settlement companies, but only fell deeper into debt after the process failed.
In an article posted to the BBB website, Stephen A. Cox, President and CEO of the Council of Better Business Bureaus said, “The debt settlement industry is flourishing and many families are being lured into believing that debt settlement is an easy fix and that their credit card debt will just disappear.” Mr. Cox went on to say that “the truth is that the process doesn’t work for many consumers, it has potentially serious negative consequences, and should primarily be used as a last ditch effort[.]”
Debt settlement companies typically offer to negotiate a settlement for a fee. Unscrupulous companies mislead consumers with promises of large savings and quick resolution. The truth is that it is difficult for a non-attorney to obtain a debt reduction of 50% or more. Additionally, these types of settlements are only available with a one-time payment. Most debt settlement companies require an up-front fee and ask the consumer to make payments into a savings account held by the debt settlement company for future settlement. During the process of six months to a year that it takes to build up the account, the consumer is at risk of garnishments and lawsuits.
In some cases fraudulent debt settlement companies have stolen from the consumer accounts, or refused to return funds. In other cases the consumer is driven deeper into debt when the debt settlement company is unable to settle the debt.
Unlike debt settlement, the bankruptcy process is a legal process supervised by a federal judge and the U.S. Department of Justice. Your agent is a licensed attorney throughout the process. There are no hidden fees and you pay only what you are able to afford. At the end of the bankruptcy process your debts are discharged and you receive a financial fresh start ordered by the bankruptcy court.
If you are struggling with debt and need financial relief, speak with an experienced attorney and discover how the federal bankruptcy laws can help you and your family. Don’t be a victim of a debt relief scam.