I see it every day. Potential clients who have spent their savings and borrowed against their retirement accounts because they’re told that,

“Bankruptcy is the worst thing for your credit,”

“It’s rarely the best option,” etc.

The shame and guilt that go into financial problems compounds the negative stigma that bankruptcy holds and by the time my clients come to my office, they have nothing left to protect.

I like this article by Angie Mohr over at Financial Edge, but she is incorrect in saying that bankruptcy is “rarely” the best option.  The problem with that statement is that people will hesitate to even consult with a bankruptcy lawyer to determine whether filing is right for them. With the economy still flat-lining and California unemployment holding steady at 12%, we cannot afford to maintain our current way of life for much longer.  What I did like about Ms. Mohr’s article entitled, 5 Myths About Personal Bankruptcy was her helpful information about how consumers can keep much of their assets while still discharging their debts. She’s correct in that your credit will not be ruined. Our friend and Fico Trained Credit Expert Witness friend, Rondi Lambeth over at Fortress Credit Pro explains that the late payments have a greater impact on your credit score than filing bankruptcy. 

The 6th Myth is Don’t Wait Until You’re Broke To Talk To Your Bankruptcy Lawyer. Like hiring any professional you want to look for an attorney who will take time to talk personally with you and answer all your questions to provide you with enough information to make a well informed decision for yourself. Then, if bankruptcy is your choice, which Chapter is right for you. Your choices may be limited depending upon your circumstances, but your lawyer will explain what options are available. Also, avoid these 7 Mistakes when considering bankruptcy and you’ll be well on your way to your own FRESH START.

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