Do not wait too long
The purpose of bankruptcy is to help individuals and families protect their remaining assets in the face of overwhelming financial problems. If you think you may need bankruptcy protection, try to do so before you lose those precious assets. For example, I see too many consumers invade their pensions and individual retirement accounts before filing. However, if they sought our bankruptcy advice before doing so, they would have learned that these types of assets are totally protected in a New York bankruptcy proceeding. Also, the sooner you file, the sooner you get debt relief. Once a bankruptcy petition is filed, it becomes against federal law for creditors to harass you any further.
Save a little money to file bankruptcy
Unfortunately for consumers, the 2005 Bankruptcy Amendment Act made the bankruptcy process much more complicated and consequently more expensive. In addition to the attorney's fee, there is a court filing fee of $299, and costs for mandatory credit counseling of about $50 before filing. Then, once your bankruptcy case is filed, you will no longer be responsible to your creditors and you will be in a position to start saving again.
Do not try to go it alone
The new bankruptcy laws are extremely complex and complicated. The prudent choice for the consumer is to retain an experienced bankruptcy lawyer. At my bankruptcy law firm, we provide a free, confidential bankruptcy consultation and explain how bankruptcy works. Many consumers who try to file bankruptcy without an attorney are unsuccessful, and their cases get dismissed without a discharge. At every Chapter 13 Meeting of Creditors at the Central Islip Bankruptcy Court on Long Island where I regularly practice, I hear my colleague, Long Island Chapter 13 trustee Michael Macco, make an announcement that in his 26 years as a trustee, he has never seen a Chapter 13 debtor successfully get a case confirmed by the bankruptcy court.
Know your options about handling debt
If you are overwhelmed by debt, or think that you may be in the future, learn what your rights and options are now. In addition to three different chapters of bankruptcy, there is also debt negotiation, debt consolidation, credit counseling, and foreclosure defense.