This is an excerpt from the CONSUMER’S GUIDE TO BANKRUPTCY IN THE FULL GUIDE YOU WOULD GET: A basic understanding of the 2 main types of consumer bankruptcy, valuable insights into evaluating bankruptcy as a debt reduction tool, and practical guidance for finding a quality bankruptcy attorney. Topics covered: - An overview of the bankruptcy process. - Key bankruptcy terms like: “discharge,” “automatic stay,” and “exemptions.” - Chapter 7 bankruptcy: what it is, how it works, and when it is preferred. - Chapter 13 bankruptcy: what it is, how it works, and when it is preferred. - How bankruptcy can save a home from foreclosure or a car from repossession. - 5 good reasons to file bankruptcy. - 5 good reasons not to file bankruptcy. - 3 alternatives to filing for bankruptcy. - 5 questions to ask when interviewing a prospective bankruptcy attorney. Want a free copy of this guide? Just send an email to email@example.com and look for it in your inbox! 5 GOOD REASONS NOT TO FILE BANKRUPTCY 1. MOST OF YOUR DEBTS ARE NON- Where a large portion of DISCHARGEABLE, SO BANKRUPTCY DOES NOT HELP YOU. your debt will not going to be discharged, then Bankruptcy is a great tool to filing for bankruptcy eliminate debt, and it can wipe out most debts, but there are certain may not be your wisest debts that your bankruptcy cannot course of action. eliminate. If a large portion of your debts is not going to be discharged in bankruptcy, then you should strongly consider whether filing bankruptcy makes sense. For instance, suppose you want to file What does this all mean? You get rid Chapter 7 to get rid of some credit of some debt, you still owe on the card debt but you also owe a lot of nondischargeable debts, and you student loan debt. In this situation, need a smart repayment plan to filing for Chapter 7 bankruptcy will address those debts. You would have likely not do a lot for you. Sure, you to do that even if you do not file got rid of some credit card debt, but bankruptcy, so what do you really your student loans will most likely gain by filing? not be discharged in your bankruptcy. The same is true with It is important to know which of your most taxes, child support and debts will be discharged, and which alimony, and other nondischargeable will not, so that you can properly debts (for more about evaluate bankruptcy as a possible nondischargeable debts, please read debt elimination tool. through page 6 of this guide). 5 GOOD REASONS NOT TO FILE BANKRUPTCY 2. YOU HAVE THE FINANCIAL MEANS Unless you gain TO GET OUT OF DEBT YOURSELF, AND BANKRUPTCY DOES NOTHING something extra by filing SPECIAL FOR YOU. the bankruptcy, then it may not be your best Your situation may not be as dire as option. That something extra for you think. You may be able to pay you may mean the ability to can catch them off yourself without filing for up your mortgage payments over bankruptcy. time, surrender your home without penalty, or pay off your student loans Your income and your expenses drive or tax debt in a finite time. your debt repayment options. If you make significantly more per month 3. YOUR EMPLOYMENT DEPENDS than you spend, then you should UPON YOUR CREDIT SCORE. strongly consider setting up debt repayment plans with your individual Several professions, especially those creditors. that require major financial responsibilities, place a large value If you make a lot of money, and you upon credit score. do decide to file a bankruptcy, then you may be required to repay all or a Filing for bankruptcy will have a large part of your debt back to the negative impact your credit score. creditors. In so doing, you have But the bankruptcy may only have a forfeited the ability to try to negotiate relatively small impact on your score the balances on the debts, and you because of the history of late have paid your attorney and your payments, large debts, and other Trustee to oversee your case. financial issues that drove you to file for bankruptcy in the first place. Current and future employers cannot discriminate against you because you filed. 3 Got a question about your situation or something you read in this guide? Feel free to email me at firstname.lastname@example.org, call me at 615-807-1064, or visit the website at www.llgtn.com. 5 GOOD REASONS NOT TO FILE BANKRUPTCY 4. YOU HAVE ASSETS THAT YOU DO 5. EVEN WITH A DISCHARGE, YOU DO NOT WANT TO LOSE. NOT HAVE ENOUGH MONTHLY INCOME TO MEET YOUR MONTHLY If you have more equity in your home EXPENSES. or belongings than you can protect by law, then you run the risk of losing Bankruptcy is designed to be a that asset if you file for Chapter 7. springboard to a new life. It should The Trustee would see if taking the help you not only in the short term, asset makes money for your but the long term as well. Ideally, creditors, and if so, then the Trustee without the burden of your debts, you will require you to turn it over. can save, make your income work for you, and plan for your future. The You have 2 options in this situation: last thing you want to do is to file a bankruptcy where you have no hope 1. File Chapter 13 bankruptcy, and of a better life upon its completion. repay your creditors the value of the asset, which could require As an example, if you have monthly you to repay most or all of your income of $2,000, but your monthly unsecured debt. expenses alone are $2,500, then filing for bankruptcy does not help you in 2. Sell the asset yourself and the long run. Bankruptcy provides negotiate with your creditors you some relief by eliminating some with the proceeds outside of debt, but you will be right back where bankruptcy. you started in a matter of months because your income is greater than your expenses. If you do not have the means to move on with your life after bankruptcy, then it may not be the right time to file. 4 Got a question about your situation or something you read in this guide? Feel free to email me at email@example.com, call me at 615-807-1064, or visit the website at www.llgtn.com. ABOUT THE AUTHOR GORDON BOUTWELL is a bankruptcy and consumer protection attorney in Franklin, Tennessee. He has practiced law since 2006, with most of that time dedicated to bankruptcy, personal finance, and consumer advocacy. Over the years he has helped hundreds of individuals, couples, and families with their financial problems. He believes in treating other people the way he would want to be treated in the same situation. He takes the time to get to know his clients, and he educates them on their options for getting out of debt, helping them to understand and evaluate them. He believes bankruptcy is a worthwhile tool to help some (but not all) people get out of debt, and, when combined with financial education and counseling, can Gordon H. Boutwell, Atty be a springboard to financial independence. Lodestone Legal Group 198 E. Main St., Ste. 4 In March 2011, Gordon and R. Keith Gordon formed Franklin, TN 37064 the Lodestone Legal Group in Franklin Tennessee, 615-‐807-‐1064 with the purpose of assisting business and private firstname.lastname@example.org www.llgtn.com clients by exploring legal options, navigating the legal pitfalls, and providing measurable results through custom solutions and a commitment to the lost art of personal care and client service. Lodestone Legal Group practices in the areas of bankruptcy, debt negotiation and settlement, financial counseling, residential and commercial real estate, estate planning (wills and trusts), and small business and corporate law. 5 Got a question about your situation or something you read in this guide? Feel free to email me at email@example.com, call me at 615-807-1064, or visit the website at www.llgtn.com.
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