There’s a $12.73 Trillion Gorilla in the Room?
Before founding my consumer bankruptcy law practice, I spent the last 26 years representing “the other side” in bankruptcy, the chapter 7 and 13 trustees. To nurture my transition to the consumer side, my peers advised me to read and listen to Dave Ramsey, which I have been doing. Dave Ramsey’s goal is to help get as many people out of debt as possible and keep them debt free. An admirable goal, and a goal that I support. We should all aspire to be debt free and live free, happy and unburdened lives. However, there’s a $12.73 Trillion Gorilla in the room. The total household indebtedness in the United States is at an all-time high of $12.73 trillion (as of March 31, 2017), so there’s probably still a need for a consumer bankruptcy law practice. I wanted to share with you a few tips if you are considering filing for bankruptcy.
First, if you’re even considering seeking the advice of a bankruptcy attorney, do not incur any new debt. Do not continue to charge on your credit cards, do not take out any cash advances, and do not take out any new loans. If you run up more debt in the 70 to 90-day period before filing a bankruptcy case, then those debts you incur may be determined non-dischargeable in your bankruptcy case. Meaning, you would still owe them even after you get a bankruptcy Discharge. Creditors could effectively argue that you took out the loan or incurred the new charges without any intention of paying them back, which is called fraud.
Second, timing is everything. Do not file, or reconsider filing bankruptcy if you are about to receive a substantial asset, such as an inheritance, a significant income tax refund, a settlement from a lawsuit, or a repayment of a loan you made to someone else.
Third, if you know you’re going to file bankruptcy, do not keep your checking and savings account at the same bank where you have a personal loan. Even if you have not filed a bankruptcy case, the bank may, on their own, take money out of your account if you are behind on payments. This procedure is known as the right of setoff, and no notice to you is required. Also, think twice if you have a credit card with your bank. While your banker may tell you, the bank will not set off your account for a credit card debt you put into bankruptcy, they may have the ability to do so somewhere in all the fine print you failed to read when applying for the bank’s credit card.
Are you mired in your share of the $12.73 trillion of total household consumer debt? Are Dave Ramsey’s methods to get debt free not working out for you soon enough? If you find yourself in a financial situation where you must file a bankruptcy case, call me for an initial free consultation at 813-308-9045. I will press on regardless for you to ensure you don’t make the wrong moves and that you make all the right moves when considering filing for bankruptcy.
