Should You File For Bankruptcy?

by | Dec 20, 2017 | Debt Help | 0 comments

Kim Basinger did it. Ditto for Rapper 50 Cent. Francis Ford Coppola did it two times. Willie Nelson, Meat Loaf and Walt Disney all did it as well.

Even this country’s founding father; Thomas Jefferson has done it. Done what? They have all filed for financial protection through bankruptcy.

Not only celebrities and politicians but no doubt many Americans have considered bankruptcy as a viable option to money woes at one time or another.

But is it the best option? There are some guide-lines you may want to consider before ever declaring bankruptcy. Here are a couple things to consider:

Bankruptcy is too Expensive

Bankruptcy for typical consumer debt is rarely a good option, as the amount is typically low for such a drastic measure.  Indeed, those mentioned above are all BIG-Money people and often use bankruptcy as part of their business strategy. They have financial advisors and legal maneuvers available to them that minimize the ramifications that you and I face should we file for bankruptcy.

You and I do not have these resources.  If we file bankruptcy, we will end of handicapping ourselves financially for a very long time.  First of all, a bankruptcy can stay on your credit report for up to ten years.

During this time opening new accounts or buying a home will not be an option and anything else we attempt to purchase will have to be cash only or we will end up paying exorbitant interest rates.  These costs, added up over the next few years, while we are waiting for the BK to clear, may well be the same amount we filled for relief from in the first place or possibly even more.

Additionally, it may cost $2,000.00 to have an attorney sign-off on your filling.  There are also the social ramifications too; lenders may look down on you and sadly, marriages have ended due to money issues that sometimes end in a bankruptcy filing.

Is There an Option?

If there was a way to rid yourself of debt, avoid credit counseling, avoid bankruptcy, avoid a ruined credit profile, and get a fresh start, all for a fraction of the cost of filing a bankruptcy, would you be interested?

There is a way.  The Heritage Group has for years now, assisted consumers with debt issues to avoid bankruptcy.  For a fraction of the cost to file a bankruptcy, we have provided a service that eliminates the debt, deals with the creditors, effectively deals with the collection agencies (if they even enter the picture) and help them come away with clean credit profile with a healthy FICO score.  All in a few short months.

Listen, things happen… job loss, pay cuts, medical bills, and any other number of unforeseen events can cause financial difficulties.  Most people do not want to default on their debt.  But if circumstances dictate, and there is simply no way to continue paying, you do what you have to do.

Here at the Heritage Group, we understand that.  So, together with our law firm, we can help you eliminate debt, avoid the repercussions that typically happen when a debt is defaulted on and make it all happen in a few short months.

The reason this is possible is due to the way Creditors and Collection agencies conduct themselves.  There is a straight-forward legal procedure for collecting debt; however these laws are rarely adhered to. This leaves the creditors and the collection agencies vulnerable to a law suit.  These law suits will result in you being rid of the debt, no derogatory entry on your credit profile, and in some cases you will come away with a cash award settlement as well!

Enjoy These Bemnefits:

So, instead of laying out $2,000 to file a bankruptcy, and continually paying in terms of high interest, ruined credit score, and social shock, you pay about $800 or for the course of a few months and these results are possible:

  1. Debt Is Eliminated
  2. Credit Is Not Destroyed
  3. Low Start-up Cost

How Much is Owed?

First and foremost, what is the amount of debt that is owed? With the above mentioned people who filed for bankruptcy protection, literally millions and millions of dollars were owed making bankruptcy a real good choice. With most folks however, such large sums are barely fathomable. But, we still have to examine closely the dollar amount we are trying to get relief from.

Often bankruptcy is chosen when there is only a few thousand dollars at risk. Considering the long-term repercussions of filing for bankruptcy, the dollar amount should be worth the cost. Some experts maintain that the debt should be double the income derived in one year. For example, if you have $40,000 a year income, your debt amount should be $80,000 or more before you consider bankruptcy. Also, you can only count debt that is not collateralized. In other words, you cannot include your home or auto loan as part of the debt amount.

Can the Payments be Made Manageable?

Second, consider whether or not settling with a creditor may be an option. Many times a creditor will also arrange for more manageable payment structure if you just take the time to call. Usually this will mean a suspension of the line of credit as part of the negotiation, but probably, due to the economic hardship more credit is not an option.

Who is the Debt With?

Third, has the debt gone from the original creditor to a subsequent collection agency? The answer to this question is very important in your decision making process before you pull the trigger on a bankruptcy. If the problem is well advanced and you are dealing with collection agencies, the very stress related to collection efforts may cause you to feel compelled to file for bankruptcy even though it may not be your best option. In this instance we do well to consider the next point.

Are You Being Threatened?

If the financial situation is such that you simply cannot make timely payments and the debt is no longer with the original creditor, collection efforts and threats made by a collection company will not change anything…if you don’t have the money, you don’t have the money. But this doesn’t mean you are entirely without resources. Available to you are your legal rights. Rights that do not include declaring bankruptcy but can conceivably get you out of debt.

When Debts Go to Collections

Collection agencies are notorious for collection protocols that break the law. Unfortunately, most consumers are unaware that their rights have been violated. This is probably the biggest reason why the laws are broken with impunity in the first place; the collectors know they will, in all likelihood, get away with illegal collection efforts. The original creditors and also the credit bureaus are guilty of law violations as well. When this happens, you can often have the debt forgiven and could possibly win a cash award as well. If the debt is forgiven, is there any longer a need to file bankruptcy? No, there is not! This is the reason why many of the clients working with the Heritage Group are able to avoid bankruptcy and get a clean start too!

Editor’s note: Even if a civil judgement is entered against you for a debt, you still may not have enough resources to pay the debt. Also, it is extremely difficult for a collector to take money from you even armed with the judgement, so it still may be hasty to declare bankruptcy at this point. Also, you can make it even more difficult for them to collect by implementing just a few strategies. For a consideration of these strategies, and how to take a legal stand during this troublesome time, please read our up-coming blog that will deal specifically with this subject.

Disclaimer: We are not a law firm and do not give legal advice. Also, the blog information is for educational purposes only and not to be construed as legal advice. In matters as serious as this subject deals with, we encourage seeking out a competent lawyer that specializes in consumer law or bankruptcy. Clients of the Heritage Group can make appointments with the attorney we use if they desire, by calling our office.