Written by Craig D. Robins, Esq.
All too often I meet with a new client who tells me that they are trying to avoid bankruptcy. Despite the fact that they may have little or no equity in their home (if they own one), and despite the fact that they do not have any assets that can be lost in a bankruptcy, they have this negative opinion about bankruptcy and want to avoid it.
But this is usually a mistake. Here’s what I tell them: Stop fighting it; bankruptcy makes way more sense than decimating retirement accounts and using up other assets which would be protected in bankruptcy anyway.
Newsweek  recently ran a great column by Jane Bryant Quinn, Newsweek’s personal-finance columnist, who said, “When people are in real trouble, they often wait too long to get the relief they need.”
The column continued, “Bankruptcy is designed to give people with no other way out a fresh start.”
Eliminating debts and moving on with your life is often the smartest move a debt-laden consumer can make. To those who qualify, Chapter 7 bankruptcy , which wipes out most debt, is the route to go. Chapter 7 bankruptcy generally eliminates all credit card debt.
For those who are seeking to stop foreclosure, Chapter 13 bankruptcy , which enables the consumer to pay some or all of their debt through a payment-plan, may be the best route.
Some people tell me that want to avoid bankruptcy because they think they have “perfect credit.” I help these clients understand that their priorities are misplaced. When you have overwhelming debt, your credit is probably shot anyway. Also, credit is not going to help you resolve your debt problems.
Ironically, even though some clients express a desire to avoid bankruptcy, they are extremely angry about the penalties, interest and underhanded tactics of the credit card companies and their collection agencies.
The first step to moving towards a debt-free future is meeting with a qualified bankruptcy attorney. Our Long Island bankruptcy offices provide free, confidential consultations.