123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Legal >> View Article

How To Avoid Bankruptcy

Profile Picture
By Author: Kirsten Gross
Total Articles: 91
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

I lost another potential client today. He was a young guy. His bills, especially his car payment, are overwhelming him.

Thing is, he doesn't need to file bankruptcy. And I told him that. What he needs to do is get rid of his car and start riding the bus. In fact, I also told him he should let the bank repossess the car.

Before anyone gets upset, let me just say that this advice isn't necessarily the advice I would give to anyone else. But in his case, it made sense.

This guy had just a few debts: the car and only about $3,000 in credit card bills. Right now, he's about three months behind on his car payment. On top of that, the bank has started tacking on insurance payments since he let his own insurance lapse. Clearly, he can't afford the car or any car-related expenses.

With that in mind, let's look at why for him bankruptcy is a bad idea. First, he said he wanted to keep the car after bankruptcy. What that means is that he is going to have to keep making the car payment and might even have to sign a reaffirmation agreement to keep it. So the basic effect of the bankruptcy is that the only debts ...
... he'll be getting rid of are his credit cards, which he is already not paying.

Get the picture? If he files bankruptcy and keeps the car, he'll be in the same exact place as if he didn't file bankruptcy. The bankruptcy isn't going to free up any money at the end of the month. It's simple math: his expenses exceed his income. The only thing that will give him some breathing room is if he gets rid of the car.

So, that's what I told him to do. Yes, the bank will sell the car and come after him for any deficiency after they pay off the loan, but it will be less than what he owes right now. The bank wasn't willing to refinance or negotiate any payment terms. And maybe he could trade his car in for a less expensive one, but his loan wasn't that high and he'd have to finance anything he owed over what he got for the trade in.

If he gets rid of his car, he'll have money available to pay off his credit cards and take care of the deficiency on his car. In return for 12 - 18 months of public transportation, he'll get his financial life on track and feel better about his future.

Should you get rid of your car to avoid bankruptcy? It depends on a lot of things, but it might make sense for you. If filing bankruptcy won't put you in any better financial position afterwards, maybe you need to explore other options.

For more information about Denver Bankruptcy Attorney, please visit coloradobankruptcyguide.com.

Total Views: 179Word Count: 473See All articles From Author

Add Comment

Legal Articles

1. Safeguard Your Child's Future With Top Legal Representation In Delhi
Author: Nidhi Rajoura

2. How To Choose The Best Fingerprinting Agency In Edmonton
Author: Hardik Shah

3. Best Corporate Lawyers In Delhi: Navigating Business Success With Expert Legal Guidance
Author: Advocate Rahul Bhardwaj

4. Key Considerations In Uk Commercial Transactions: Legal Perspectives For Business Owners
Author: Rainer Hughes

5. How An Ri Divorce Lawyer Can Simplify Your Separation Process
Author: Law Office of John R. Grasso

6. How To Handle A Slip And Fall Case In Minnesota: A Comprehensive Guide Of Hiring A Lawyer
Author: sussmanlaw

7. Uk Spouse Visa Processing Time: Updated
Author: The SmartMove2UK

8. How A Minnesota Dog Bite Accident Attorney Can Help You Seek Justice
Author: sussmanlaw

9. Legal Remedies For Cyber Crime In India – Advocate Deepak
Author: Advocate Deepak

10. Legal Remedies For Cyber Crime: Advocate Deepak's Expertise
Author: Advocate Deepak

11. Mitigating Consequences For First-time Offenders: Defense Lawyers On Keeping Records Clean
Author: glennrroderman

12. The Benefits Of Hiring A Collective Bargaining Attorney In Nyc
Author: indexblogger

13. Interview Waiver For Us Visa Renewal - Everything You Need To Know
Author: Hardik Shah

14. Dui Lawyer Dinwidde Va
Author: Dui Lawyer Dinwidde VA

15. The Evolution Of Content Marketing For Law Firms: Trends And Innovations
Author: jamewilliams

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: