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Experts Say Declaring a Bankruptcy Earlier May Help Debtors Rebound Later

February 3, 2010

As Upland consumer bankruptcy lawyers, we were pleased to see a recent article on the importance of timing a bankruptcy. The Kalamazoo Gazette reported Jan. 16 that experts, including individual bankruptcy attorneys like us, suggest that people headed for bankruptcy consider filing early, before their financial problems are overwhelming. This is how most people handle it, the article said, because most people do everything they can to avoid a bankruptcy in the first place. But if the bankruptcy seems inevitable, personal bankruptcy lawyers say it's better to protect your assets by taking action early.

According to the article, most people drain their savings, cash out their 401ks and IRAs and sell possessions to pay debts after they get into financial trouble. This is understandable, because bankruptcy is a major financial upheaval that stays on the filer's credit report for ten years. During that time, it will be harder for the filer to rent an apartment, get a loan or perform many other basic acts involving credit. Many people try to avoid bankruptcy because they believe it will leave them "nude," one attorney said, meaning without assets. But in reality, experts said bankruptcy can often preserve financial assets while providing a chance to start over. For that reason, attorneys said they wished bankruptcy filers would come to them months earlier, closer to when their financial troubles started.

Our Garden Grove personal bankruptcy attorneys strongly agree. The article doesn't make this explicit, but in many cases, consumers lose their assets needlessly while trying to avoid a bankruptcy. It's better to avoid bankruptcy if possible, of course, but some filers have debts so high that there's no other realistic way to handle the situation. When this is the case, we encourage potential clients not to sell off their assets or liquidate their savings before they speak to us. In a bankruptcy, many of the assets that people typically liquidate are protected, which means they will not be sold to creditors. These include retirement savings, a certain amount of home equity, personal possessions without much value and heirloom jewelry. By declaring bankruptcy early, filers can start over with these assets in place, providing a cushion they'll need as they begin to rebuild their finances.

Howard Law PC has years of experience handling bankruptcy cases for Californians from all backgrounds. We understand that bankruptcy is an emotionally difficult decision that makes some people feel as though they have failed. However, we believe that for the right person, bankruptcy can also be a very smart financial move that allows them to deal with crushing debt without letting it take over their lives -- or enduring years of harassment by debt collectors. Our Pomona individual bankruptcy attorneys help clients take an objective look at their finances and decide what to do next. If you decide to pursue a bankruptcy, we will stand by your side throughout the process, from appearing in court to handling creditors to making any modifications necessary to meet changing circumstances.

If you feel like you're in debt over your head and you're not sure whether you can handle it on your own, you should call Howard Law today. We offer completely free, completely confidential case evaluations. To set one up, you can send us an email through our site or call us toll-free at 1-800-872-5925.