Are You Next?
By: Source: AARP Bulletin Today Date Posted: 2005-01-14 10:23:00-05:00
If you’re considering bankruptcy, your first move should be to talk to an experienced attorney who can fill you in on the specifics. Here are a few basics to keep in mind.
Declare before you are destitute. "Bankruptcy is serious and you shouldn’t take it lightly, but that doesn’t mean you have to wait until you’ve lost everything," says bankruptcy attorney James Caher. "If you have some blocked arteries, it may be smarter to have bypass surgery before you have a heart attack. The same is true of bankruptcy." Talk to a bankruptcy attorney before you wipe out your retirement accounts, lose your house to the bank, and sell the car that you need to get to work. Bankruptcy court may allow you to keep those precious assets. Exemption statutes vary from state to state and it’s important to know what you’re facing.
Have an action plan. Declaring bankruptcy may help wipe the slate clean, but you still need to figure out a way to pay future bills without falling into debt again. Know that, contrary to popular myth, declaring bankruptcy will not destroy your ability to get credit. To the contrary, says Caher, "some credit card companies actually target you right after bankruptcy because they know your slate is clean, and they know that you can’t file for bankruptcy again for six more years." So you’ll need to be financially wise and very careful going forward.
Dig deep. Bankruptcy, alas, isn’t free. Attorney expenses will likely cost you at least $500. Court fees will add another $200 or so. And no, you can’t pay with your Visa card.
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