The real estate market has caused more financial disaster to families than ever before. Property values have plunged up to 50% or more in some areas and few experts predict any kind of growth for years to come. In 2010 the number of non-business bankruptcies surpassed 1.5 million reaching a 5 year high and some people expect 2011 and 2012 to have even higher numbers.
“Almost everybody knows someone who has filed (or considering) bankruptcy so it may be time to face the reality of your financial situation”
Credit card companies, real estate organisations, banks and others who have a vested interest in debt may have a different forecast but can you really even trust their opinion?
The most important element is consumer sentiment and for many people the immediate future does not look so bright without a little help. The good news is you are not alone. Bankruptcy and Foreclosure are no longer bad words but simply tools to assist with starting over. Tools that we are fortunate to have in America and one you really need to consider if your situation calls for it.
Where do you start and when do you know when to file?
Hindsight is 20/20 and there is no better example of how true this expression is then when it comes to bankruptcy. Ask any individual who has completed the process and most all will say “I should have filed a long time ago”.
Finances play a significant role in your health and the stress of dealing with debt collection agencies, credit card collection departments, mortgage companies and others is simply not worth it. Numbers are black and white. If you are borrowing month after month to save your home, pay your car insurance bill or simply keep food on the table then maybe its time to at least have a real discussion with someone who can provide advice. Finding a trustworthy attorney may be a tougher process than making the decision to pursue a clean slate but there are many around and when you find that right person it’s very possible to start sleeping again.
What are the Top 5 things you should do before filing bankruptcy?
Contact an Asset Protection Lawyer
Finding an asset protection lawyer is your first step. There are many items exempt from creditors such as retirement plans, life insurance policies and more. Even certain types of bank accounts for married couples can be flush with cash and not a single creditor can ever touch the money depending on where you live. Most asset protection lawyers know or work with bankruptcy attorneys and even if you don’t end up filing there are valuable things you can learn to protect your assets from judgments and debt collectors.
Get your Taxes in order
A mandatory requirement of filing bankruptcy is having your taxes prepared for the prior year. Without tax returns you cannot file so its imperative to stay current. If your lawyer advises you to file bankruptcy and you have an opportunity to discharge all of your debt and get a fresh start do you really want tax returns holding you up?
Many attorneys are great counsel but there are also some sharks who have a nice smile and passed the bar exam. Never assume your attorney knows everything. Read forums, ask questions, speak to other people who filed and make sure your attorney answers all your questions. Bankruptcy may be an everyday event to him but you are the one filing and any mistakes or missing items will only cause more headaches down the road.
Take Advantage of being Married – You may not have to file jointly
This is huge. In some states married couples can file separately and marital assets are protected under state law. What this means is that some couples have an opportunity to file individually and maximise the amount of assets they get to keep. The husband files one month, then the spouse files a few months later. Always ask about the advantages of filing individually if you are married.
Do you remember all the sleepless nights with debt collection agencies calling you at 9pm? Relax and focus on the filing, not on the debt. Change your phone number if you need to – banks contract agencies well known for harassment (another reason to not feel guilty about filing) and there is little you can do to avoid this. Focus on the end game and soon a fresh start will be there.
Financial problems happen to the best of us and even if some people enjoyed a little living beyond their means when the real estate market was booming its no reason to suffer for eternity. In fact, for every single person filing bankruptcy today there is most likely someone much more famous, richer and higher in another courthouse doing the same thing.
No one is immune to financial problems but the only way to a good night’s sleep is to embrace your situation and take steps to fix it – not steps to avoid it.