Bankruptcy Indiana

In a recent radio broadcast on National Public Radio, Michele Singletary warns that personal bankruptcy should be a VERY last resort.  After more than two decades in the practice of bankruptcy law, I have some counterpoint to offer on the subject. Too often, in their attempts to avoid filing bankruptcy at all costs, clients wait too long to seek legal advice.  At that point, some of their options have been sacrificed.

'Debt help" and "foreclosure fix" scams are rife, and according to the Center For Responsible Lending, even legal payday lending practices could be considered predatory. Most important, though, is that too often, consumers wait passively for weeks rather than contacting their lenders to explore options. One very, very common mistake I find is that folks who cannot pay all their bills choose the wrong ones to pay first. 

There are immediate and very severe consequences if federal tax bills, student loans, or child support bills are put at the bottom of the pile, including having bank account assets seized and wages garnished. Even worse, debtors often deplete assets such as retirement accounts, which are exempt in bankruptcy, to pay bills which could have been discharged in the bankruptcy!

My work as a bankruptcy attorney includes keeping cars from being repossessed before it is too late, helping negotiate with mortgage lenders to stave off foreclosure, working with the IRS to arrange installment payments for taxes, and even dealing with student loan authorities.

Time is of the essence for individuals struggling for their financial lives. When late fees and penalties are piling up by the day and creditors are calling at home and at work, it's crucial to get legal advice quickly and select a course of action. In almost all situations, the bankruptcy Automatic Stay puts a halt to all collection and legal efforts against the debtor until the court decides on a workable course of action.

Ms. Singletary is correct in saying that abankruptcy will show up on a credit report for ten years.  But, let's be honest - anyone who isn't keeping up paying bills doesn't have a fabulous credit record to begin with.  What bankruptcy "buys" is the chance for a debtor to spend the next two to four years re-establishing good credit! 

What really destroys a person's good credit is putting off action while debts continue to pile up.