What is the first step in determining whether or not bankruptcy is my best option for dealing with debt?

When Is It Time To Consider Bankruptcy?

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No one ever really wants to file bankruptcy.  After all, admitting to financial distress and that you have lost control of your finances is not an easy task, especially for someone who has a great sense of pride and independence.  Filing bankruptcy is admitting that you need help and for many people, that initial step is the most difficult one to make. 

However, when is it absolutely, without a doubt time to consider bankruptcy?  Here are some good leading questions to help you determine if bankruptcy is the right option for you.

1. Is the financial stress you’re under affecting the rest of your life and personal relationships? For our married clients, not only do their finances improve post bankruptcy, so does their marriage.  After all, what do you always fight about- MONEY! And your finances will be in better shape post bankruptcy.
2. Are you depressed, anxious, or otherwise physically stressed due to being unable to make your monthly payments on time or due to collectors calling? 
3. Is your home in foreclosure?  If so, did you know that you can delay the process, allowing yourself more time to catch up on payments, perhaps even eliminate a second mortgage, if you file for bankruptcy? 
4. Are you currently having your wages garnished?  If so, and if you are barely able to make your monthly payments, such garnishment can wreak havoc on your financial stability and budgeting.  Filing bankruptcy can stop the garnishment and possibly discharge the debt, depending on what type of debt it is (taxes, child support and many student loans cannot be discharged). 
5. Are you able to save any money at all?  If you answered no to this, then bankruptcy might be your best option to get back on your feet financially.  If all of your monthly income is going toward necessary expenses and bills, you will never be able to save for a rainy day and get yourself in a better financial position.  This ability to save is a crucial step to getting on the right track financially.  

Should I tell my bankruptcy attorney everything that is related to my financial situation or can some things be hidden?

Should I Tell My Bankruptcy Attorney Everything?

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When you hire a bankruptcy attorney, you are hiring a legal professional to protect you and your financial interests.  Your attorney is unable to do his or her job if you aren't completely honest about your financial situation, and you should look at your attorney-client relationship in much the same way as you view your doctor-patient relationship.  Your privacy is protected with client privilege and what you DON’T tell could end up hurting you.    

This is because whatever facts you are attempting to conceal about your finances are likely already known by the bankruptcy trustee or the attorney that has been hired by your creditors.  If the “other side” knows more about your true financial situation than your own attorney does, you are setting up a scenario in which your attorney is going into the fight blind.  In this situation, he or she cannot fight for you without the proper knowledge to do so. 

Your bankruptcy attorney has a fine line to walk.  He or she must keep the bankruptcy trustee happy and present your bankruptcy case to the court without appearing to hide something.  If there is information that the trustee knows but your bankruptcy attorney doesn't  this will look suspicious to the court and keep your attorney from doing the job he or she is trying to do—the job of helping you and your finances. 

So should you always be completely honest with your bankruptcy attorney about your financial situation?  The answer is a resounding yes!  You are paying an attorney to help you get your finances back on track, so you should take advantage of the opportunity to let your attorney know everything that is related to your financial state of affairs.  Then, and only then, will the attorney be able to help you in the best way possible.  In our experience, people get a lot of bad advice about bankruptcy- from their friends, the internet, their “primos en Kendall” and lots of other places.  The best advice regarding bankruptcy you can get is from a bankruptcy attorney.  Most good ones offer a free initial consultation (like us), so give them a call (our number is 305-663-3281) and tell them EVERYTHING.