How to Avoid the Inevitable When Facing Ruin


In the ever worsening financial crises that is enveloping the world, more people and companies are finding themselves unable to sustain their lives, or the lives of their companies. Whenever debt overwhelms the individual or business, it is time to call in a bankruptcy attorney to handle the situation. A bankruptcy lawyer is well versed on how to get the individual or company through the process as easily as possible.

For individuals, the constant harassment of debt recovery companies has led many to contemplate even suicide. The government put into place a piece of legislation called Chapter 7 to prevent just this scenario. With this piece of legislation, it is important that the individual gets help to work his way through the inevitable red tape so that no mistakes are made.

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First and foremost, it is time to consult the professionals so that they can lead the person through. In the first instance, once the case is filed in court, the harassment will stop. The creditors are no long allowed to contact the debtor at any cost. Then, the debtor will have to go through some steps to make sure that this situation never happens again.

Financial management courses are one of the requisites that the court insists on but once these are done, the debt is wiped out and the person can start life afresh. Most times, the debtor will be able to keep his house, car and other things that normally would have been sold off to pay the debts. Of course, this does not mean that the person gets off for free. Some debts, like alimony or fraud debts, must be paid otherwise the system would be open to abuse by some rather unscrupulous individuals.

It also depends on how much the family has received in salaries in the past six months. If it is higher than the average then the person would have to file for Chapter 13 instead.

Chapter 13 is slightly different than Chapter 7 in that it expects the individual to repay his debts. But these are amalgamated into one lump sum, which should be affordable, and it carries the added advantage of having no further credit charges, no late fees, and no one banging on the door to take away the family car. The same courses have to be undertaken to get to this point but at least the debtor can rest assured that his belongings, like his house, will not be seized and sold off.

Credit consolidation services may look like a similar deal but beware of the hidden costs here. Interest will still be charged on the debts and some of the creditors may not agree to the arrangement. It is probably better to go through the court system to finalize all the arrangements in one go. For the sake of about $350 dollars, it is well worth it.

Of course, none of these plans is as easy as it looks since the debtor will be means tested. However, it does give enough breathing space for the debtor to relax a bit and start all over again.


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