By: Lori T. Williams, Esq., Wayne/Oakland County Legal News Examiner for joltleft.com and Owner/Managing Attorney of Your Legal Resource, PLLC
Have you ever wondered if Bankruptcy is the answer to your debt problems? Southfield Attorney, Julie Smyk, shares some common misconceptions people have about Bankruptcy, and the corresponding truth about this area of law. Click here to read the full article. Smyk advises each client to have their personal financial situation reviewed by an experienced Bankruptcy attorney, so they’ll know what legal options exist and choose the options that are right for them. Click here to learn the differences between Chapter 7 and 13, and other relief available to individuals with debt issues.
While it may be tempting to draw your own conclusions by researching articles on the internet or talking to friends about what they did, ultimately each person’s debt issues and available recourse needs to be looked at individually by an experienced and knowledgeable professional. A reputable Bankruptcy attorney won’t recommend you file for Bankruptcy if it isn’t going to improve your situation. Sometimes credit counseling or credit repair is needed, instead of filing for Bankruptcy. If a house has an upside down mortgage but the overall financial picture is otherwise in good shape, loan modifications or short sales might be a better option than Bankruptcy.
There are no “one size fits all” remedies. Consumers are wise to seek advice from a variety of professionals with experience in the type of debt issues they are facing. Some people think Bankruptcy is for anyone with “too much debt”. What’s too much debt? That’s a subjective determination based on one’s assets, debts, income, and other circumstances, such as health issues, job loss, recent divorce, etc.
Some individuals feel paralyzed because debt is putting a strain on their marriage and they don’t know if they should file for Divorce or Bankruptcy, or both. Neither scenario looks very pleasant, so some choose to do nothing hoping the situation improves. Getting advice from a Bankruptcy Attorney or Divorce Attorney doesn’t mean filing for Divorce or Bankruptcy is inevitable. It is simply a way to become informed of one’s legal options to determine possible next steps. Some clients find that they are able to save the marriage and eliminate the debt, by working with the right professionals.
Troy tax attorney, Stephen Dunn, is of the view that Consumer Bankruptcy can actually do more harm than good, especially where tax liability is involved. In the first of two recent articles published by Forbes, Dunn said ”before filing a bankruptcy case, a consumer needs to determine whether it is truly in his or her best interests. In this regard the consumer should seek the advice of legal counsel independent of that recommending the filing of a bankruptcy case. Standing and dealing with your debts may be wiser than trying to run from them.” In the second article, Dunn elaborates as follows: “Relief from taxes in bankruptcy is illusory. I have come to realize that the 10-year statute of limitations on collections is the tax debtor’s best friend. Under 26 USC § 6503(h)(2), the filing of a bankruptcy case extends the collection statute by the pendency of the bankruptcy case plus six months. IRS will not acknowledge in writing that taxes have been discharged in bankruptcy. IRS certainly will not record discharge of a Notice of Federal Tax Lien recorded in a register of deeds’ office. The Federal tax lien may well continue in the debtor’s property notwithstanding discharge of the debtor in bankruptcy.” For full articles, click here.
Points to Ponder and Share:
•What stops you from seeking legal advice? Time, cost, fear?
•If you had an opportunity for a free consultation, would that make a difference? Would you be more likely to explore your legal options if no upfront fee was involved?
•Are you more likely to turn to friends and family for advice or seek the input of a trained professional?