By: Daniel Stone
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Deciding on whether to file for bankruptcy
Article written by Columbia, SC bankruptcy lawyer Daniel Stone
For most of my Chapter 7 and Chapter 13 bankruptcy clients, deciding on whether to file or not is a huge question. Most people do not want to file for a bankruptcy if they do not have to, but unforseen issues such as medical emergencies and unemployment force bankruptcy as an option. What are the major questions someone should look at when deciding to file for bankruptcy? Here are a few questions:
1. Look at the advantages that a bankruptcy filing can bring. Sometimes I have clients with financial problems but after a consultation we determine that bankruptcy will bring little or no advantages to the prospective client. However, many times the prospective client learns that a bankruptcy filing will bring significant advantages. So my first tip is to learn what are the potential advantages a bankruptcy will bring.
2. Determine if a Chapter 7 or Chapter 13 is better for you. For some of my clients, it’s a no-brainer. Based on their circumstances, they either have to file a Chapter 7 or a Chapter 13 – they simply do not have the option of choosing. But for many of my clients, they do have an option on whether to file a Chapter 7 or Chapter 13 bankruptcy. So make sure you analyze the benefits of both and make the right decision. One note, you can always convert to a different Chapter after filing if you think you made the wrong decision.
3. Look at different options other than bankruptcy. Whenever I have a prospective client come see me for the first time, I never want them leaving my office filling like I am pressuring them to file for bankruptcy. The opposite is true. I want a prospective client to look at all their options and select the best one. What are some options other than bankruptcy? Well, this usually takes a consultation to review all the options in detail, but here are a few: loan modifications, debt settlement, negotiations, and paying of debts in full are a few options. One option we have in South Carolina that some states do not have is to do nothing. What do I mean by this? South Carolina unlike most states in the Union does not have wage garnishment. This means that credit card companies cannot garnish your wages even if they get a judgment against you. I’m not saying this is a good option – it’s just an option.
4. Make sure you do your homework when choosing a bankruptcy attorney. There are a lot of very good bankruptcy attorneys that will fight hard for you in bankruptcy court. Unfortunately there are some bad bankruptcy attorneys. Many prospective clients only look at how much a bankruptcy attorney charges. While this is an important factor, it shouldn’t be the only one. What are some other factors you should ask? I would ask : How long has the attorney practiced bankruptcy? How many times have they argued a case before a bankruptcy judge? Do they have any published decisions? How easy is it to talk to your attorney? Do they have a good reputation? Will they call you back in a timely fashion.