Bankruptcy Reader

Bankruptcy is a great equalizer — no I don’t mean it in jest. Just imagine, the richest of people can also go bankrupt and so can that neighbor who is finding it difficult to meet expenses. And so can you! So how do you handle bankruptcy? I’m not talking about having emotional strength. While that is necessary, one of the most important things you should provide for once you realize that you may have to file is a good bankruptcy lawyer.

A good lawyer can help you work out your bankruptcy case in such a manner that you are not greatly harmed by it. So, how do you go about getting yourself a good lawyer? Before I tell you that, let me tell you how not to find a legal representative. Avoid using lawyers who advertise heavily in the Yellow pages. These attorneys are just interested in the fees you pay them. And since bankruptcy is something that is going to affect your financial future and your credit report for quite a long time, it is best to go for the best attorney available. Finding a good attorney is not a very difficult task:

You can either go online or inquire around to find a good lawyer to help handle your case.

• Get in touch with people who’ve already filed and know their experiences. This may help you zero in on a few good attorneys.
• If you have the time, you could also contact the numerous legal associations across the state. These associations will recommend lawyers based on working relationships with them.
• Lastly, you could also check with your employer. Quite a few employers have now set up employee assistance hotlines, which can help you get referred to a local attorney.

One year after they put themselves under Chapter 11 protection, Delta Air Lines and Northwest Airlines are still searching for the means to exit bankruptcy. These airlines have been cutting all kinds of costs including labor costs and other expenses and are even trying to cut capacity to get out of bankruptcy. Reuters.com reports:

Now, with the industry enjoying early signs of a turnaround — as rising ticket prices start to offset higher fuel costs — the airlines are eager to resume normal operations. Delta plans to file its reorganization plan later this year and emerge from bankruptcy in the first half of 2007.

Read more:Delta, Northwest eye exit on bankruptcy anniversary

I’ve been speaking on and off about the many myths that abound with regards to bankruptcy. Bankruptcy has a pretty bad reputation because of these baseless myths and you will realize that it is not so bad after all. I will deal with one myth today: that if you are married, both spouses have to file for bankruptcy.

This is not at all necessary. Sometimes it may so happen that only one spouse has a significant amount of debt in his/ her name. However if you have debts that you want to discharge and are both liable for, it is better that you file together. In such a case, if one of you doesn’t file, then a creditor could demand payment for the entire amount from the spouse who didn’t file.

If you haven’t heard about Laurence Kotlikoff, don’t worry — neither have I. It was only recently I learnt about an article he wrote in the Federal Reserve Bank of St. Louis Review that has instigated a flurry of commentary on the state of domestic policies. The reason: Kotlikoff poses the question, "Is the United States Bankrupt?" — according to him, while the country may not be so badly off right now, it’s definitely headed that way. Spectator.org reports:

Kotlikoff’s claim is supported by several carefully calibrated computer analyses that show how the promise to provide many trillions of dollars to today’s citizens — of which $67 trillion are unfunded — would spell disaster in years to come. Over the next 20 years, 76 million people — fully one-fourth of the total population — will transition into retirement, compounding the problem dramatically.

Read more: Bankrupt Thinking on U.S. Bankruptcy

While there was a significant dip in the number of bankruptcy cases filed after the new Bankruptcy Act was passed last year, the trend seems to be changing now. Local and national statistics show filings may start to rise again as the second quarter of 2006 shows a a 53.5 percent increase in filings, from 55,671 in the first quarter to 85,449 in the second quarter. Bizjournals.com reports:

Bankruptcy attorney Jeffrey Freedman, senior partner at Jeffrey Freedman Attorneys at Law, said the perceived increase may be due to people’s changing believes that they couldn’t file Chapter 7… He said rising interest on adjustable-rate mortgages and high energy prices may prompt more people to file for bankruptcy if they are on the brink of a financial crisis.

Read more: Bankruptcy filings on rise in spite of new restrictions

If you have been defaulting on your payments for more than a couple of months, then you know all about debt collectors and their pressure tactics. But that does not mean you have to submit to any of these pressure tactics. Here are a few basic rules that the debt collectors have to face, failing which you can initiate action against them.

Firstly, realize that the debt collector is not your actual creditor. It is a third party or go-between for the creditor. The Fair Debt Collection Practices Act governs the actions of debt collectors. As per the Act, the debt collector is not allowed to call you before 8 in the morning and after 9 at night. If you have informed your debt collector that you are not allowed to receive calls from them while at work, they have to desist from calling you during that time period.

Try to negotiate a payment with your debt collector. Don’t be too ambitious. The amount, while being realistic, should be something that you can afford to pay regularly. If you have multiple creditors, prioritize your payments. Make a list of your creditors with the most urgent ones at the top of the list. Pay the urgent ones off first before you move to the next in the queue.

If none of the above methods help you find a way out of the problem, then you need to contact a credit counseling agency. They are in a better position to negotiate with your creditors and give you reasonable repayment rates and extended time periods. Before you approach any agency, be sure to check their credentials.

Indianapolis is witnessing a model problem of sorts, or rather a modeling business problem with dozens of models claiming that an Indianapolis modeling business failed to pay them for work that they did. The business owner Heather Dill filed for bankruptcy in June. Now a bankruptcy court is trying to determine what assets it can claim from Heather.

Perfect 10 Models Inc, the modeling business in question, hired these models to promote products at events like trade shows. The models’ contracts said they would be paid within 90 days. However, according to the models, no payment came. And to make matters worse, Heather delayed payments by making excuses and according to some models, even lying that their paychecks were in the mail. As of now, Dill seems to want to work out a payment plan with the models. Theindychannel.com reports:

The court said it learned Dill deposited $24,000 in her own bank account the day after she filed for bankruptcy. The court is reviewing Dill’s financial statements to see what assets it can seize from her, Sanchez reported.

Read more: Bankruptcy Court Reviewing Records Of Models’ Employer

Up to your neck in debt but don’t want to declare bankruptcy? Well, it isn’t necessary and neither is it desirable in some cases. If you think that, given time you can repay your debts, then you probably should look for alternatives. Debt consolidation is one such option. Simply put, in debt consolidation, you take another loan and use the funds to pay off your outstanding debts. Here are some of the benefits of a debt consolidation loan:

• It is repayable over a longer term at a relatively low interest rate. This means that the monthly repayments are lower.
• If you take a secured loan then the interest rate and payments may be even lower.
• Borrowing for debt consolidation immediately eliminates multiple debt payments. Most importantly, it doesn’t impact your credit rating; in fact it may help improve your credit rating.

Lawrence Dwain Hoover, the final defendant in the Baptist Foundation of Arizona case, pleaded guilty Tuesday to one count of fraud. The foundation, a nonprofit religious entity, collapsed in 1999 in what was then the largest nonprofit bankruptcy filing in U.S. history and about 11,000 mostly elderly investors lost almost $600 million as a result. Tucsoncitizen.com reports:

In a plea agreement, Hoover admitted to knowingly participating in a series of year-end transactions for the purpose of inflating BFA’s financial statements.

Read more: Hoover enters plea for role in Baptist bankruptcy case

Bankruptcy is not something that is confined to a certain class or type of people. Any time in their life even the richest man or woman can become bankrupt. Yes, today, more than ever before people are facing overwhelming debt problems and are going bankrupt. If you haven’t seen people afflicted by the bankruptcy epidemic, it’s not because their numbers have fallen but because most people don’t like divulging this fact. Many people in this situation feel embarrassed and do not want other people to know about it.

But one thing you must realize is that there is absolutely no need to feel embarrassed or guilty. If your financial situation is so bad that the only option available to you is filing for bankruptcy, go ahead and do it and then move on with your life. To get this whole episode past you, one of the most important requirements is a good bankruptcy lawyer who can help you with your bankruptcy filing. When it comes time to find a bankruptcy lawyer to handle your case, it is important you look at several different law firms to see who can handle your case in the best way possible for you. Bestsyndication.com reports:

There are many lawyers who practice bankruptcy, but not all of them are interested in the best outcome for you. Some firms are just interested in getting as many people through the door as they can without looking at the case or person filing for financial relief.

Read more: How to Find a NH Bankruptcy Lawyer