A Bankruptcy Lawyer’s Blog

Bankruptcy is a Scary Word

Now there is a word that can spook you! Or can it? The word bankruptcy is like the word sex. It is all bad, nothing good about it, causes nothing but trouble! Baloney, baloney, baloney. Bankruptcy is a CONSTITUTIONAL RIGHT! The days of debtors prison are over and have been for a long time. Bankruptcy filings are at an all time high, so do not think you are alone. A law was passed to change parts of the bankruptcy act. The Law changed on 11/17/2005. The people got wind that the banks were financing a few key politicians. Those politicians are now out of jobs. Talk about special interests. This is not about politics.

I am not going into the details on how this worked out as much as I would like to! THE BANKRUPTCY ACT HAS CHANGED! Lets talk about bankruptcy, Most people do not think about bankruptcy until a lawsuit is filed or judgment is filed. If you get served with a lawsuit., let me assure you here and now, unless you committed a crime or broke a law, you ARE NOT going to jail! If you get served with a lawsuit no matter if it is a creditor or a neighbor, the first thing you do is contact a lawyer. I will repeat, the first thing you do is get yourself a lawyer. Whether there is any fact to the suit or not, get yourself a lawyer!

Do not try to deal with the creditor on your own. You might give up your rights without even knowing it. This may place you in a precarious situation. Your lawyer will be familiar with the bankruptcy laws. He may have a way out other than bankruptcy. Either way the lawyer will know how to deal with this situation. He may wish to represent you in bankruptcy court. In most cases your attorney will refer you to a specialist, who deals in your specific problem. In other cases this might be his area of expertise. Do not assume that by filing a bankruptcy you will lose everything. This is NOT the case. Most bankruptcy petitions have exemption clauses that will allow you to keep your personal possessions.

A bankruptcy petition will stop all creditors cold. The creditors are not allowed to anything other than to petition the court to collect the debt and that is not going to happen. In most cases the creditors do not even bother because they know it is a losing situation from the word go in most bankruptcy cases. Remember you do not have to deal with the bill collectors.

There are debt counselor all over the country, unfortunately, most of them are worthless. If you decide to go this way, ask your attorney first. He/she will know if the debt counseling service carries any weight with the creditors and courts. Since the new Bankruptcy Law is in effect, it is a requirement that you go to one of these debt counselors PRIOR to filing. Check with you attorney!! In my OPINION ONLY, I have not see a single one that was any good to date. You end up paying them a small fee or a large fee and I have yet to see one case that did not end up in Bankruptcy Court.

If you cannot afford an attorney, contact you local legal aid agency. They will set up an appointment with a qualified attorney who is a specialist in bankruptcy and related matters. There is usually a nominal fee for the services.

Joseph M. Sabol, a graduate of the Pennsylvania State University School of Business with two degrees in business sheds a different light on money, credit and banking. He has written 2 E-books. For further information, go to http://www.creditmoneyandyou.com or http://www.makeyourmoneywork.net