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Article Addresses Myths About Personal Bankruptcy Filing for Consumers

October 2, 2009

As longtime Orange County bankruptcy attorneys, we have seen a sharp increase in clients who are considering bankruptcy during this bad economy. That's why we were pleased to see an article in Smart Money magazine Sept. 30, addressing some lesser-known facts abut bankruptcy -- "ten things bankruptcy courts won't tell you." With bankruptcy filings higher than ever and more Americans hit by the double whammy of joblessness and falling home prices, we welcome more nuanced information on the bankruptcy process. While not every item is complete, or terribly surprising, others could be useful to people considering bankruptcy as a legal protection.

The article starts with a fact that surprises many of our clients: They are not likely to be left homeless and destitute by a bankruptcy. In fact, homeowners often choose Chapter 13 bankruptcy because they'd like to protect their homes, and laws in every state specifically protect home equity. Even people who file for Chapter 7 bankruptcy, which liquefies all of their assets, can often hold on to their homes if they don't have enough equity to make repossession worth their creditors' while.

Another overlooked fact in the article is that timing your bankruptcy filing correctly is important. Clients who feel harassed by creditors may want to file right away, but if they know they'll have to take on new debt in the near future -- say, because of a major medical problem -- it may be better to wait until after that debt is incurred, so it can be included in the bankruptcy. On the other hand, waiting too long to address outstanding debt may damage the client's credit more severely than the bankruptcy itself. That's one reason experts suggest that potential filers talk to a bankruptcy attorney as early as possible in the process.

In fact, our Chino bankruptcy lawyers routinely help clients get the most help from their bankruptcies by advising them on issues like these. In addition to timing, we advise our clients on ensuring that all relevant debt is disclosed; which creditors they should continue paying and which they can safely ignore; tax and credit consequences; and alternatives to bankruptcy. Many of these are pitfalls that, if not addressed, can get filers into legal trouble or leave them in debt despite having a bankruptcy on their records.

At Howard Law LLP, we are proud to find solutions for people who know they're in debt over their heads. Our Riverside bankruptcy attorneys start each bankruptcy case by analyzing the client's finances, allowing us to determine whether bankruptcy is really the best choice for them, and which type of bankruptcy is best. Depending on your circumstances, we may recommend Chapter 13, in which clients set up a payment plan allowing them to hold on to property, or Chapter 7, in which clients sell most of their belongings and discharge debt in less than a year. Most of all, we want our clients to know that bankruptcy doesn't have to be shameful or carry a stigma; sometimes, it's the best, most responsible choice.

If you're tired of struggling to make ends meet while dealing with aggressive creditors, Howard Law can help. To set up a free, confidential evaluation of your case, please call us toll-free at 1-800-872-5925 or contact us through our Web site.