08 Jan 2010 01:12 pm
Morristown, New Jersey Attorney with over 36 years experience in the Bankruptcy Process.
Mr. Pegg personally handles all of his matters and is dedicated to providing his clients with the knowledge and understanding to successfully complete their Bankruptcy filing in accordance with the Federal Bankruptcy Laws. Located in Morristown, New Jersey and serving all of Northern NJ.
THE PERILS OF BANKRUPTCY AVOIDANCE
Many people will go to great extremes to avoid filing a bankruptcy, all of which plays into the hands of their creditors and in the long run costs then dearly and fails to resolve their financial problems. Instead of seeking proper legal advice, they go on to the internet seeking legal advice and wind up hiring a debt consolidation company. Thousands of dollars of “blood money” is then “invested” over a course of many months in an attempt to pay down their unsecured creditors. After a time, they realize that they are getting almost no where and that the process will continue for years to come. Why do people do this?
They believe that their good FICO credit rating must be preserved at all costs so they can borrow yet more money. This is almost silly when you think about it. What does a good FICO score really entitle you to do?
- Buy a house. Not really, at least not after this current mortgage melt down. While a good FICO score is helpful in this process, such things as annual income, overall debt, how much you are putting down, longevity of employment, have a far more important role in the mortgage qualification process.
- Buy or lease a new car. Yes, good credit will help here. But again, it is but one of the factors. Good income and employment history are equally important in this climate.
- Get more credit cards. Yes, a good FICO score is a shorthand way the credit industry looks to see if they should lend you money at a high rate of interest. Well, is this not a continuation of mushrooming pile of high interest debt that is causing the problems in the first place?
They believe that if they file for bankruptcy they will never have any credit again. This is simply false. Consider that after the bankruptcy process is completed, people are a far better credit risk . Why? Simple: they now have no or little unsecured debts; and, assumedly, they are gainfully employed; and they cannot file for another bankruptcy for 8 years (in the case of a Chapter 7 bankruptcy). In short, from the standpoint of creditworthiness, they are more appealing prospects.
They believe they will loose their home. In the vast majority of bankruptcies , this simply does not occur if the mortgage payments are kept current (in the case of a Chapter 7 case) or are reorganized (in the case of a Chapter 13 case).
They are feeling guilty. Of course it does take “two to tango” and you did borrow the money, for whatever good or bad reason. But didn’t they make it easy for you with their low introductory rates, the promise of good times, and their “free” and easy credit? And then what happened? Were you late with the payment of a $50 utility bill only to find all of your credit card companies have boosted you to 30 odd percent interest because you are now a bad credit risk. And note they do this for your total outstanding debt, often with no warning at all as you simply see your monthly payments jump through the roof. This is nonsense.
The debt consolidation industry expanded by leaps and bounds over the past 5 years. They are spending millions on TV and internet advertising. One should stop and think about how this industry is funded and why it is so profitable for those engaged in it. Who pays for this profit? If the consumer is not paying for it, the answer is obvious: the credit industry. These people do not do anything which is not to their financial benefit at the expense of the consumer.
At least, to become an informed consumer, one should carefully consider and weigh out the alternatives to such a costly and often totally ineffective process.
Give us a call for a free consultation!
If you are experiencing financial difficulties, being harassed by creditors, have credit card debt, unpaid medical bills, repossession (s), pending lawsuits, judgments or are being on your mortgage or rent payments, then a Chapter 7 or a Chapter 13 filings may be of great benefit to you.
Related posts:
- Is Filing For Bankruptcy in New Jersey Difficult? Is It For Me?
- Bankruptcy is now common in the middle class of America.
- New Jersey Bankruptcy Lawyer in Hunterdon County
- New Jersey Bankruptcy Attorney In Hudson County
- New Jersey Bankruptcy Lawyer in Union County
