When bankruptcy is smarter choice

13 May When bankruptcy is smarter choice

AARP’s magazine column The Short Answer echoed my view exactly: stop fighting bankruptcy. People often wait too long to make the bankruptcy decision, invading retirement and college savings to the detriment of their future.

The fear about “ruining credit” is misplaced: most of those in deep enough to consider bankruptcy have lousy credit already says AARP. (If overwhelming debt isn’t yet reflected in their credit score, you have to wonder how meaningful a credit score is, anyway.)

AARP joins Jane Bryant Quin of Newsweek in urging the public to start focusing on a debt free future, and adding consideration of bankruptcy to the discussion.

I have one small bone to pick with AARP’s explanation of the bankruptcy means test. Not all above median income debtors must file Chapter 13, as the article suggests. The means test is really a three part formula. The second part of the means test which looks at future medical expenses, secured debt payments, court ordered support, and unpaid taxes qualifies many above median income families for Chapter 7.

When bankruptcy is not the answer

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Cathy Moran, Esq.

I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.
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