Don't Wait Too Long to File Bankruptcy

The bankruptcy laws are here to offer relief from debt, protect important assets, and provide a fresh start.  However, it has always been a source of agony for me to be contacted by folks who waited too long to seek bankruptcy protection.  It is smarter to seek a consultation regarding bankruptcy before considering a debt consolidation service or borrowing against your home or car to pay down your debt.

Bankruptcy Should Never be Considered a Last Resort

The credit card and lending industry engage in a lot of subtle and not so subtle advertising to convince you that bankruptcy is the worst thing you can do to get out of debt. I wish I had a dollar for every time a potential client tells me that they were advised by a friend, minister, other lawyer, credit counseling service to avoid bankruptcy entirely or only consider it as a last resort.  Unfortunately they had followed this bad advice only to find themselves enduring garnishments for tax debt or credit card or student loan debt or facing the loss of their home through foreclosure or eviction.  Had they consulted a skilled bankruptcy attorney they could have avoided these calamities altogether.

Protect Your Important Assets

Many people make the mistake of tapping into their retirement or borrowing against their home equity before finding out whether bankruptcy is a better option.  While bankruptcy may not be the answer for everyone, in many cases, it will allow you to settle your debt without losing your retirement funds or subjecting your home to possible foreclosure.

Bankruptcy Can Clear Your Credit

Many fear filing bankruptcy will ruin their credit forever.  Actually, bankruptcy rebuilds your credit for the simple reason that you are legally settling your debt and erasing those factors which most negatively impact your credit rating.  It is better to seek bankruptcy relief before your credit score worsens from missed payments or carrying too much debt.

Lien Removal

Bankruptcy allows for the removal of liens on your property in some situations.  When the housing market crashed and values declined a few years back, many folks were able to remove second liens on their homes. If you are struggling to pay two mortgages on your home, it makes sense to consult a bankruptcy attorney to see if you can strip the second lien (usually a line of credit or home equity lien.)  This is a matter of timing in regards to housing values. Many times I have received calls from folks wanting to strip their liens but they had delayed that call too long and missed their window of opportunity.