Know When It’s Your Time to File

Published Tuesday, July 14, 2009 @ 11:51 pm

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There comes a time when you realize bankruptcy is your best option. That moment is not always the easiest to determine but look for it right around the time you decide it’s safe to ride out the financial monsoon. Chances are, if you are chest-deep in the flood waters and still think you can swim to safety, it’s time you hope for a life raft.

It is quite easy for those within your social circle to paint a picture of social disenfranchisement and shame when you tell them that bankruptcy has become a reality. But ignore it. Do you seriously want to further endanger the well-being of your family because of something a not-very-understanding friend believes?

Today, the bankruptcy decision is often rooted in a far broader swath of rationale than it once was. Medical bills, layoffs, mortgage rates and student loans are affecting the middle class like a bad flu. It is no longer 1950. It is monumentally more difficult to support a family of four on a single-salary auto shop job or teacher’s take-home. Houses cost more. Dependable transportation probably requires financing and few companies offer solid health plans. The bottom line is that a reasonably comfortable lifestyle demands a good amount of money. In this economy, that’s not easy to come by.

Industry analysis shows that most families put off filing for bankruptcy much longer than they should. The constant struggles to stay afloat and avoid the stigma do rarely more than simply delay the inevitable while substantially augmenting household stress levels. At that point, the entire family circle is at risk of a meltdown. Additionally, many families lose assets along the way that could have been used to kick-start things after bankruptcy. Thus, it is critical to recognize your situation and own up to it. Perpetual denials of the benefits of bankruptcy only negate the law’s very purpose, which is to stop the feeling of uneasiness, the lack of productivity,and downward slide of your self-confidence. And, it’s about starting over.

Remember too, that bankruptcy is about preservation. It uses the legal system to empower you from losing everything. It can be a powerful tool to keep those essential items, like your home and auto, while shedding your unsecured debt. This puts you in a better financial position to stay current with your mortgage and your car payment.

Maybe you’re recently unemployed. Bankruptcy can put a freeze on the debt collection calls, and let you focus on what is most important: Finding a job and keeping food on the table.

Don’t let this be a time to cash in your retirement. Almost all experts agree that using retirement accounts to pay small amounts on large bills is foolish. Your IRA and 401k are completely protected under bankruptcy law. Don’t waste your future financial security just to make a monthly credit card payment.

Remember, file bankruptcy when you still have something left to protect. Like your family. And your sanity. It’s simply not worth waiting until the bow of the ship is in the water to fire a flare.

In North Carolina, contact the Law Offices of John T. Orcutt to discuss your bankruptcy options. 1-800-899-1414. Free initial debt consultation with offices in Raleigh, Durham, Fayetteville and Wilson.

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