When to Consider Bankruptcy?
Bankruptcy
When to call an attorney is a question that needs to be answered; asking a bankruptcy attorney whether or not you need their assistance is a bit tricky after all they make their living processing bankruptcies.
A better choice in my opinion is seeking help from a financial planner first to review your assets and cash flow before taking the next step. A planner should have a good idea for knowing when to call a bankruptcy attorney.
In many, but not all states certain assets like one’s retirement accounts and home are protected from creditors.
Major importance is the protection of assets, the time to consider protection is before there is a claim. Every state legally protects some assets, the list varies by state and it’s important to know what rules apply.
How an asset is titled will also have a bearing on whether or not an asset is protected, in some states like Florida, assets that two spouses own in common can’t be divided to satisfy judgements against just one spouse.
For individuals there are two forms of bankruptcy to consider, choosing the right one will depend on your income and amount of assets along with the amount of your debt.
Chapter 7 Bankruptcy
Under Chapter 7 bankruptcy, you can have all or part of your debts discharged, after your liquid assets are used to repay some of the debt.
Chapter 13 Bankruptcy
Under Chapter 13, you repay all or part of your debt through a three- to five-year repayment plan. When you make the personal bankruptcy filing, you will also submit a repayment plan to the court.
Review the reasons for your financial situation and take steps to correct the financial stress in your life. Don’t allow possessions to rule your life. Take control of your spending and stick to a monthly budget.
Daniel Iuculano, AAMS CMFC
Accredited Asset Management Specialist
Chartered Mutual Fund Counselor
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