The Economy appears to be improving; at least that is what the numbers and news broadcasts relay. However, many of our clients at The Mark Bamberger Company see people who continue to suffer pain. As I related in a previous article, many experts report a second wave of foreclosures and resultant Chapter 7 and 13 bankruptcies due to a second expected bounce in some adjustable rate mortgages.
Many of our clients are still either unemployed or severely under-employed. Many of them continue to see mounting bills they cannot pay. Home mortgage lenders seem to be “cutting off their nose to spite their face”, by taking billions in government bailouts; then openly imposing obstacles to mortgage modifications. Additionally, finance charges and late-payment penalties are making creditor payments harder than ever.
What is the answer? There is no standard answer for everyone; but with planning, families can avoid the pitfalls of the still-hindered economy. Bankruptcy may be a good option; but before that decision is made, debtors should meet with their attorney; be it me or someone else, and do a global assessment of their financial situation. Specific questions to ask, among many others, include:
- Is my house safe from foreclosure or loss in a bankruptcy? If my house is in foreclosure, how far in is it (from initial complaint through final sheriff’s sale)?
- How much equity do I have in vehicles and other big-ticket real and personal property?
- How much unsecured debt (e.g., credit cards, medical debts, and personal loans) can be discharged in my bankruptcy?
- Can I afford to pay for a bankruptcy? This is often easier than many think since they can be economical, paid off through monthly payment plans, and paid from the money not paid to unsecured debt during the bankruptcy period.
Above all, don’t panic; there are almost always options. Empowerment comes from taking control, even if the situation appears dubious!