[COLUMN] Debt problems: How can bankruptcy protect you?

Facing difficult financial times can be a frightening thing for a lot of people. When bill collectors are hounding you, at some point, you realize that something must be done but you just don’t know where to begin or where to go for help. Often, options can also be confusing unless you get the right information that you need to make the right decision. Should I consider filing bankruptcy or is that the worst mistake I can make under the circumstances? What can creditors do to me if I continue to ignore my debt problems?

If a lawsuit, wage garnishment, repossession or foreclosure is imminent, you need to take action immediately so you can protect yourself and your property.  If filing bankruptcy is your best option, consult with an experienced bankruptcy attorney who can explain to you how this process works so you can get immediate debt relief.

Unfortunately, most people feel a certain shame or stigma about petitioning for bankruptcy when in reality it may be the best thing that they can do to protect themselves from creditor actions. Listen to me: If your home, wages, assets and your financial future are at stake, you don’t need to feel embarrassed about anything. If you have done your best to do everything you can with no success, you need to at least find out what your legal options are. Forget about what you friends and family may think if they find out that you are considering bankruptcy. That should be the least of your concerns. What you need to know is to find out the advantages and disadvantages of bankruptcy so you can determine if it is right for your situation.

If you have been sued by a creditor and you don’t file an answer to the complaint, the creditor can get a default judgment against you. The judgment obtained will then allow the creditor to further collect the debt by seizing your bank accounts or garnishing your wages. In certain cases where the creditor obtains a court order to force you to appear in court to be examined regarding your assets (debtor’s examination), your failure to appear may result in a bench warrant issued by the court for your arrest.

Keep in mind that in the above scenario, you do not go to jail for owing money, but you can get arrested for failure to appear at the judgment debtor’s examination. If you file bankruptcy, of course, at any point during the collection process, the legal proceedings against you are immediately stopped.

For those of you who are in foreclosure and are currently trying to work out a solution with your lender with a forbearance agreement, a repayment plan or a loan modification, don’t make the mistake of not having an alternative plan just in case your lender says “no”. I see a lot of people these days who have waited for months to get a response from their lender after submitting their loan modification application, only to be told the last minute that their lender has declined their request and that foreclosure proceedings will immediately resume.

If you have been approved for a “trial loan modification”, also remember that this doesn’t guarantee approval unless you abide by the terms of the conditional approval. My point is this: Find out NOW what other options may be available to you in case you are denied. If you wait to do this AFTER you have been denied, you may find that you either have very limited options or no options at all.

For a free consultation, call my office at Toll-Free 1-866-477-7772 so we can carefully evaluate your case.

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None of the information herein is intended to give legal advice for any specific situation.  Atty. Ray Bulaon has successfully helped over 6,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call RJB Law Offices at TOLL FREE  1-866-477-7772.

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