WITH two million people in foreclosure and rising unemployment, personal bankruptcies have surged once again. Experts predict that by the end of this year, there will be approximately a total of 1.1 million bankruptcies filed for 2008. Did you know that according to the American Bankruptcy Institute, families are now going bankrupt at the rate of 22,000 a week? If you are one of these individuals, perhaps you are starting to panic and are feeling a sense of urgency to act before things get worse.
Although no one ever likes to think of bankruptcy, the reality is that we are living in very difficult financial times and bankruptcies are becoming an ever-growing part of American life. In a past article, I stated how a lot of people felt extremely frustrated when they found out that there was absolutely nothing for them in the $700 billion federal bailout handed to the large financial institutions. Out of this now comes the desperate realization for a lot of individuals that bankruptcy may be their only personal bailout. They say that if that if these giant financial institutions had to be bailed out just to get out of debt and recover financially, what about the debt-ridden consumers who could barely put food on the table in the midst of rising unemployment and this recession we’re now in? Can filing for bankruptcy help you?
Of course, most people think of bankruptcy only as a last resort and would try to exhaust other options first if they are available. For example, if you are facing what may be a temporary hardship, it may be possible to communicate with creditors right away to work out a partial payment option until you get back on track. If you have fallen behind on mortgage payments, most banks are willing to work out a repayment plan or allow a suspension of payments for a few months. These days, more and more banks are also becoming more flexible in negotiating loan modifications with homeowners in foreclosure.
Chapter 7 bankruptcy can often help people in foreclosure by wiping out credit card debts that are taking a huge portion of the household income. When you see someone who is buried in credit card debt and using almost half of his or her income just to make minimum payments on credit card debts every month, it is not hard to understand why making mortgage payments is such a struggle or almost impossible. This easily leads to delinquency and foreclosure becomes almost inevitable. By wiping out unsecured debts that you can no longer afford to pay, you may now be in a better position to afford your mortgage payments. In some cases, Chapter 13 may be the better option so you can consolidate all debts into one low payment. All debts, including back mortgage payments and property taxes, can be included in the consolidated monthly payment and the foreclosure is stopped immediately upon filing of the Chapter 13 case.
If your present financial difficulties are pushing you into bankruptcy, I understand how difficult it is to deal with this decision emotionally especially if you’ve never been in this situation before. However, I also want to encourage you to look on the bright side: If you have no other viable alternatives, remember that more than a million people file bankruptcy every year and they do just fine after bankruptcy. Most people with debt problems already have negatives on their credit report anyway and filing bankruptcy actually allows them to wipe the slate clean, start over and rebuild credit in as little as 2-3 years. Don’t focus on short-term consequences. Look at the bigger picture and ask yourself how solving your debt problems now can produce long-term benefits.
These are very hard times and if you have to take the personal bankruptcy route, remember that you are not the only person who is going through financial difficulties at this time because a lot of people are on the same boat. For a free office consultation, call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos and West Covina.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772. (Advertising Supplement)
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