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With the recent economic setbacks faced by many families due to job loss, furloughs and medical bills, bankruptcies are likely to rise in the United States in the coming year. Filing for bankruptcy is a difficult decision. Uncertainty, fear, feelings of failure and depression are common reactions when people contemplate this life-changing financial choice. The good news is that you don’t have to make this major decision alone. Because each individual situation is different and the options are many, bankruptcy is an area where it pays to enlist professional help, including expert assistance from bankruptcy lawyers.

The first step in determining to seek bankruptcy advice is to take a realistic look at your current situation.

Many people in debt put this important step off because of the anxiety it produces. In this case, ignorance is not bliss; rather, it is making a bad situation worse. The first step is to make a list of all of your monthly bills and payments due and then make a list of your assets.1

Assets are items such as any money in savings accounts, investments (stocks, bonds, retirement funds, etc.), real estate, cars, valuables and other items of worth. Anything that you could sell would be considered an asset.

By doing this, you will be able to determine if your debts are greater than the money (assets) that you have to pay those debts. If you don’t have enough money to cover what you owe then seeking professional credit counseling or bankruptcy advice is your next step. You should also seek that professional advice if taking an inventory of your assets and debts is something that you are constantly putting off. Credit counselors and legal professionals can guide you through this important step in the process. The bottom line is that you should not continue to ignore your worsening financial situation.

Some other red flags which indicate that you need to seek help include the following:

• Receiving repeated calls from bill collectors
• Paying only the minimum payments on your credit cards
• Missing credit card or other payments
• Taking out cash advances on one credit card to pay another
• Taking on a second or third job and still being unable to reduce your debt
• Withdrawing money from a retirement account to pay debt
• Having creditors refuse to negotiate a satisfactory repayment plan with you2
• Having a collection action, garnishment or lawsuit brought against you3
• Having a lender threaten to foreclose on or repossess your property
• When your financial situation causes stress in your personal or business relationships

There are two types of bankruptcy protection — Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy many, if not all, of your debts are canceled outright in a short three- to six-month timeframe, whereas Chapter 13 bankruptcy uses your income to make payments on your debts over a period of three to five years.4 Each of the two common types of bankruptcy filings has its advantages and disadvantages.

A credit counselor or legal professional can assess your situation and your goals and work with you to determine which type of bankruptcy protection is best for your situation. A professional may also advise you that bankruptcy protection can be avoided and can help you work with your creditors and devise a budget and plan to pay off your debts. Seeking out the help you need is a giant first step in improving your financial situation, repairing your self-esteem and gaining peace in your life.

If you are looking for a Bankruptcy Lawyer in Massachusetts, Hines Law can help. We are a full-service personal bankruptcy firm specializing in Chapter 7 and Chapter 13 filings with over 20 years’ experience. Call today for a Free Consultation!