Bankruptcy: An Acceptable Resolution For Financial Strife

04 Jan Bankruptcy: An Acceptable Resolution For Financial Strife

Bankruptcy can help you if you are in trouble with your home, and may help you follow a new catch phrase you may hear:

“Just walk away”

That’s the title of a recent Newsweek article by Jane Bryant Quinn, normally a conservative financial writer. The article recommends filing for bankruptcyin some circumstances, and doing it sooner rather than later.

Ms. Quinn discusses the humiliation often associated with filing and points out, correctly, that that the purpose of getting a fresh start is to stop self-blame and helplessness and give yourself a second chance.

Most people contemplating filing are at the end of their rope and there’s little else they can do to right their economic ship. But for many people it isn’t the end of the world – it’s a new beginning, and in this era of financial crisis, rising unemployment and decreasing house values, it may be the best thing to do.

In her article, Ms. Bain quotes University of Iowa law professor, Katie Porter, noting that most people struggle longer than they should before filing. Also quoted is Harvard Law School professor, Elizabeth Warren, advising to time the filing of a bankruptcy carefully.

The bottom line of the article: filing for bankruptcy will get you a fresh start and help you reestablish a healthy credit score sooner rather than later. If conservative financial columnists are encouraging this avenue then it’s obviously time to recognize that it has become the most acceptable and reasonable way to deal with a personal financial crisis.

A clean break and the ability to walk away from the houseis a benefit to many people who find themselves facing either a Chapter 7 or a Chapter 13.

  • It is important to note that not all people loose their homes if they file bankruptcy.

Chapter 13is an excellent tool to help many people keep homes, particularly if they have a lot of equity in it or have fallen behind in payments.

However even in Chapter 7 bankruptcy, many people keep their homes.

If you’re heading in that direction, don’t wait too long: find a competent bankruptcy attorney now to speak with about your situation.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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