Posts Tagged ‘debt settlement advice’

If you are planning to file for Chapter 7, first consider the pros and cons of retaining a bankruptcy attorney and going through with it. Take a look at this list of the pros and cons of bankruptcy and decide what is the right move for you in your current financial situation.

The Pros of Bankruptcy:

Hiring a bankruptcy attorney can be a debt management tool to help solve your financial problems.

  1. Fresh Financial Start – The biggest advantage of having a bankruptcy attorney file your claim is obviously the hope of obtaining a fresh financial start once your debts have been discharged.
  2. Automatic Stay on Debts – Creditors must stop their collections efforts when you file for bankruptcy. All collection actions from creditors will be stopped including: foreclosures, repossessions, and garnishments. If they haven’t, contact your bankruptcy attorney immediately to bring the matter in front of a judge.
  3. Protection of Essential Property­– In most states, your home, car and other essentials are exempt so your bankruptcy attorney will ensure you do not wind up homeless or unable to get around.

The Cons of Bankruptcy:

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Even though debt settlement companies have helped thousands of Americans get out of debt, trustworthy debt settlement companies often feel few and far between. In truth, the industry sometimes gets a bad rap. While my own company, Debt Logic, operates under very strict principles of clear and honest transactions, sadly not every debt settlement company does and a few bad apples can spoil the reputation of the bunch. As a consumer, one way to protect yourself from a damaging business relationship is to spot the red flags of a shady company.

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According to a recent Times article, Downturn Pushes More Toward Bankruptcy, March 2010 marked the highest month of bankruptcy filings since the financial crisis started, with almost 6000 bankruptcy petitions filed each day on average. This marks a 9 percent increase from th e month before, and a 38% increase year over year.  In all, 130,000 people filed for bankruptcy in March.

Some of the most common reasons that individuals file for bankruptcy include:

  1. Unemployment
  2. Foreclosure
  3. Divorce
  4. Disruptive Health Problems

As a result of last year’s weakened economy, and its repercussions (the unemployment rate is still rising, as are foreclosure numbers) the amount of people exposed to these situations has grown larger than in the past. (more…)