Do I Really Need to File For Bankruptcy?

Friday 5th of October 2012 01:35:31 AM

No, I really mean it.  Please check with a bankruptcy attorney before deciding to file.  If you read my last blog post you will know that I freely make comments that may sound self serving.  But
Almost every bankruptcy attorney I know, including myself, offers a free consultation.  I also volunteer my time at a free bankruptcy walk-in clinic organized by the Bankruptcy Court.  You could be committing a terrible mistake just by filing alone. I do mean it.  I have seen dozens of disastrous bankruptcy petitions filed by people representing themselves.  Listen, it’s not easy, I know attorneys cost money and many people facing financial difficulty cannot afford one.

What could go wrong?  What could not go wrong?

I received a call recently from someone who is of questionable legal status (perhaps even illegal) who filed their bankruptcy themselves only to be staring at two United States Marshalls waiting for them at their 341a meeting of creditors.   There are ways to deal with such problems and they don’t have to end this way.

If you are filing to avoid the heavy hand of a collection agency, they may not even have legal standing to harass you that way (they may have  blown the statute of limitations on collecting the debt).  If the law is on your side, you may avoid filing for bankruptcy altogether.

Are you completely ready to walk away from your home?  If so, perhaps you could just hand it back to the bank (a deed in lieu of foreclosure) and not have to file bankruptcy.  If you hand it back, you may or may not be on the hook for the rest of the loan.  You must check with an attorney.  If you are not on the hook for the remainder of the debt, you certainly don’t need to file bankruptcy for your mortgage alone.

These are just a few of the scenarios I’ve seen; there are many, many more.  Don’t file bankruptcy unless you understand what it can (and cannot) do to help you.  The cost to find out?  Zero.

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