Bankruptcy Lawyer | Is it Possible to Avoid Bankruptcy
Bankruptcy Lawyer | As the years roll by, the number of clients from Bakersfield, Kern and Inyo counties who have consulted me about bankruptcy are well into the thousands. We are currently in a period of time where the actual number of filings is at a historic low. As ghoulish as it sounds, there are bankruptcy lawyers who are optimistic or hopeful that the number of filings will increase. In my experience, bankruptcy is part of our economy in both good economic times and bad. While I don’t really have an exact take on whether filings will increase, it is true that consumer debts have returned to unsafe levels. Student loan debt, of course is headed toward what I believe will become a monumental crisis.
People file bankruptcy for many reasons. There is always a combination of personal factors. Divorce, unemployment, shifts within one’s industries, consumer preferences drifting away from brick and mortar retail, cutbacks in funding affecting governmental employees, etc.
As a matter of course, with every client, we look first at any non-bankruptcy alternative. In my experience, non-bankruptcy options fall within the following: Some, but not all creditors, will consider a lump sum settlement if adequate proof of insolvency is provided. Lump sum settlements hover around the 50% of the balance owed, which for most people, is difficult to pay.
- Asset liquidation. Downsizing by selling off the home or other property has been and may be a viable option. I cannot stress enough, however, the importance of talking to a bankruptcy professional prior to undertaking this process. One of the biggest mistakes my clients make is to liquidate the wrong asset; for example a personal retirement account. Also, in my experience, business are better off engaging in their own controlled liquidation rather than turning the keys over to the bankruptcy process. In chapter 7 bankruptcy, the court appoints a trustee to sell assets in order to make debt payments. That process results in fire sale values. If you have tax debt, please see a bankruptcy professional first. Where to apply your liquidation assets in order to obtain a fresh start requires that you address your problems with non-dischargeable debt prior to worrying about dischargeable debt.
- Debt consolidation. Non-profit debt consolidation programs, such as Consumer Credit Counselors of Kern and Tulare County may be a viable alternative. For profit agencies typically charge up front administrative fees. It is important to pay attention to which creditors participate in the consolidation.
- The judgment proof debtor. I have counseled many clients, particularly those on social security or other exempt income, who have no assets that can be attached by creditors, to simply not file. They are “judgment proof,” which means that they will not be subject to involuntary collection actions.
Getting help form well -versed bankruptcy lawyer is another way to help you navigate the best way. My office offers an initial consultation that will explore all options; both non-bankruptcy, as well as the various chapters that may be available to you.
If you are considering filing Chapter 11 Bankruptcy in Bakersfield for your business, get advice sooner, rather than later. Call Max Gardner Bankruptcy Lawyer at 661-888-4335