April 2007

30 Apr Is Bankruptcy The Right Decision? (Part 4)

Most of my clients come to me only as a last resort. They don't want to file bankruptcy, are worried about the “stigma" that it might have on their life, and wondering whether or not the cost, both financially and to their credit score will be worth the benefit. That, I think, has to be the key determination: is the relief they're going to get from filing bankruptcy worth the price they will have to pay? By price, I include not only the economic costs, but the cost to their credit score, and the moral expanse.
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30 Apr Is Bankruptcy the Right Decision? (Part 2)

In most every bankruptcy consultation, I am asked, "Do you think I should file bankruptcy?" Because it is assumed I have an economic incentive to push bankruptcy, I don't answer the question. Rather, I analyze the financial circumstances, and I advise what would happen to the financial circumstances if a Chapter 7 or Chapter 13 bankruptcy were filed. I determine what, if any, non-exempt assets exist, and how much the bankruptcy will cost the prospective client. This process is a classic cost-benefit analysis. Having armed my consult with the facts and analysis, I ask the following question, "Can you devise a realistic plan for improving your financial circumstances in a reasonable period of time?"
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