Avoiding Bankruptcy has now become a cottage industry: Loan Modifications, Credit Counseling, Negotiations with Creditors have all become Catchy Slogans for many new business ventures - some reputable and some downright crooks. Most clients are willing to do just about anything to avoid Bankruptcy on their record, but many of these options do not make mathematical sense, especially when there is little chance of a higher income in the near term.
A recent article in the Chicago Tribune gives some signals that suggest a Bankruptcy might be inevitable, but I believe most people have the common sense to know in their gut when the mountain of debt is insurmountable.
Personal bankruptcy filings for July were up 34 percent over last year, according to the American Bankruptcy Institute. This is now the highest monthly total since the infamous 2005 change to bankruptcy laws, making it more difficult for debtors to file. Translation: Average Californians are getting financially devastated by current economic conditions, their State Government is so beholden to Special Interests that it is incapable of responding to the downturn, and a catastrophic correction finally occurred in artificially created Housing Assets that Bankruptcy has become the only realistic option for average folks.
This is what you won't often be told. Historically, the number one reason why a person does not declare Bankruptcy is because they have to protect the Equity in their Home. What used to be an insurmountable obstacle is now just a little bump in the road. No equity translates to a free pass to the world of Bankruptcy Relief. It's not that simple, of course, but it is a big deal, and does much to explain why the tougher Bankruptcy Laws of 2005 have done little to impede Bankruptcy Filings of late. As a Los Angeles Bankruptcy Attorney, I will take a in depth look into your particular situation and determine if Bankruptcy is your best option. Hopefully, I can tell you whether a Chapter 7 Bankruptcy is the right choice BEFORE you spend money on other options that don't work.
