How can you know if you should be considering bankruptcy? We’ll guide you through a few questions you should ask yourself to help understand if bankruptcy could be right for you.
Thousands of people file bankruptcy each day because difficult circumstances prevent them from paying their bills. In 2005 nearly 2 million bankruptcies were filed nationally (over 15,000 of those were in Iowa). Job and medical problems are the most common reasons people cite for filing bankruptcy. A study by Harvard Law School showed that two out of three people in bankruptcy have lost their job and half have experienced a serious health problem. Thirty percent (30%) of bankruptcies are filed by women filing alone and the average age of bankruptcy filers is 38. And contrary to public perception, the study said the average bankruptcy filer is well-educated, a homeowner and married. In fact, many successful people, including Walt Disney, Donald Trump, Mark Twain, and Frank Lloyd Wright have used bankruptcy to forge a fresh start.
Before filing bankruptcy you might want to explore alternatives such as credit counseling and negotiation but bankruptcy is often the best solution to financial problems and offers you the fresh start you need to get back on your feet again. Credit counseling agencies are very limited in what they can do for debtors and actually receive most of their income from the credit card companies. The "debt management plans" offered by credit counseling agencies are rarely able to reduce your monthly debt payments and sometimes the minimum monthly payments actually increase. The debt management plans might reduce the number of years you have to pay off your debts by decreasing your interest rate and eliminating late fees. But if you're having trouble keeping up with your monthly minimum credit card payments and other obligations, the debt management plans offered through credit counseling agencies are unlikely to help. In addition, estimates are that only 4% of debt management plans survive the first year of what is typically a 3-5 year repayment program.
During our first visit to discuss bankruptcy we will assess your situation and weigh the different options available. If you can answer any of the questions below affirmatively, it would be useful for us to meet.
Are creditors and bill collectors calling you all the time?
Are you falling further and further behind on your home mortgage, rent, credit card, or other payments?
Have you had a disastrous event happen to you or your family, such as a serious medical illness or loss of job that will affect your ability to make payments on your outstanding debt?
If you own a farm, have you experienced significant losses that are preventing you from keeping up on your land or operating payments?
Does all of your paycheck go to cover your debt payments and leave little, if any, money left to buy groceries, medicine or clothing?
If you need to learn more or think you might be a candidate for bankruptcy, it is essential we discuss your situation in greater detail. We encourage you to contact our office for an initial consultation on the phone or in a meeting.
