While the economy seems to be recovering, not everyone is out of the woods from the depression we just had. Jobs have been created and unemployment is down, but wages have not increased. See: NY Times Article. A lot of people have been coming to me and asking “Is bankruptcy right for me?”
My first questions I ask them is always whether or not their credit is worth saving, meaning are you at a 650 and up? If so, what is the total amount of debt that you have? If it’s manageable and you have some means of getting together some money to pay it off, perhaps bankruptcy is not right for you yet.
Here is an example: Bob and Mary’s making just enough money to get by. They have been making all minimum payments to their credit cards, but they want to put more of this money toward a down payment on a house. They are $10K in debt and they have respective credit scores of 650 and 700. They can borrow some money but not $10K. They are wondering if they should file bankruptcy.
This would be my suggestion to them: 650 and 700 is a credit score worth saving, especially if they want to buy a house soon! If they can borrow at minimum $5K from family and friends, I would suggest that they hire me to do some debt negotiation/settlement on their behalf. This would mean that I would contact their creditors and try to negotiate a discounted payoff of the debt.
While it’s true that anyone can call the creditors and negotiate with them, there are some tips and tricks to it. Also creditors will tend to treat attorneys more seriously and communicate with attorneys more promptly then non attorneys.
If you think that perhaps you fit into Bob and Mary’s situation, please contact me so I can sit down with you for a free 30 minute consult!