For Your Clients Considering Bankruptcy
In these tough times, people are considering their options and some may be in dire financial straights. For those considering bankruptcy, I will share a message from fellow MSBA member, consumer attorney Sam Glover. Mr. Glover can be found on the web at http://caveatemptorblog.com/ and consumerlawyer.mn.
A lot of people who are getting calls from debt collectors think their only option is bankruptcy. Bankruptcy may indeed be the best option, but it really depends on a few things.
First, if the creditors are debt buyers--that is, they bought the debt from someone else--the client may be able to beat those cases in court.
Second, if the consumer is being harassed by debt collectors, they probably have claims under the FDCPA. While winning an FDCPA case does not mean the consumer no longer owes the debt, debt collectors are often willing to satisfy the debt as part of settlement. Plus, the consumer may end up better off as a result of the lawsuit.
A bankruptcy is always more harmful than wiping out the debt by fighting the collection. When potential clients contact you and want a bankruptcy referral, take a moment to see if they might have other options.
Thank you Sam for sharing this useful information!
Dr. Shaun Jamison
www.guideonyourside.com
Labels: bankruptcy
posted by Shaun @ 2:55 PM
1 comments
1 Comments:
I agree. It's always best to work on every option before going to bankruptcy.
Also, if the client decides to go ahead with bankruptcy, but wants to keep some credit (such as a retail credit card) open, please advise them that "just not telling the creditor" won't work. Many credit card companies now subscribe to electronic services that notify them of bankruptcy filings, or find out by other means, and if they know, must submit to the bankruptcy process.
Instead, the client should contact any creditor whose card they intend to keep to find out if that creditor is willing to work with them to reinstate that card through such legal means as reaffirmation. And they should do this before the formal filing, following up once the filing has taken place.
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