Monday, March 28, 2011

Stopping garnishments without bankruptcy

Debtors frequently ask if they can do anything to stop a garnishment or a lawsuit before they are ready to file a complete bankruptcy case, perhaps as a "pre-filing" measure. After all, how can they afford to pay a bankruptcy lawyer once part of their take-home pay is being garnished? I am sorry to report that there is no procedure in bankruptcy to stop debt collection before you really file bankruptcy. The process is only started with a bankruptcy petition, and for Chapter 7 cases your attorney must be paid in advance. (Bankruptcy attorneys also usually want all the documents fully prepared for the time of filing, though you can file a "skeletal" petition and then file the complete forms within 14 days. However, there are serious pros and cons.)

Saturday, March 19, 2011

Bankruptcy exemptions: What property can you keep?

Many people who file for bankruptcy are allowed to keep all their property, though it is important to review and plan bankruptcy exemptions. First of all, the bankruptcy process (particularly in Chapter 7) is designed for a debtor to have property sold off for the benefit of creditors. If you have anything you cannot afford to lose in bankruptcy, this can be a tricky process requiring a lawyer who will help you plan carefully.

Friday, March 11, 2011

When to file bankruptcy

Deciding whether bankruptcy is best for your situation is complex enough. If you have decided you need bankruptcy relief, the next question to consider is whether to file now or file later. Although filing provides immediate protection against collection efforts, there are situations in which you will be better off if you wait.