Is Filing for Bankruptcy the Right Option?
This might sound like a simple question, but the answer is much more complicated. According to the Consumer Bankruptcy Handbook, numerous issues must be examined. Before an attorney can advise a debtor on how best to resolve his/her financial difficulties, the debtor must truthfully and fully disclose his/her financial situation to the attorney. Unaided, most debtors are unable or unwilling to recite every relevant detail of their financial situation to an attorney. It is the attorney's task to ask the appropriate questions necessary to obtain the information from the debtor. The preliminary information needed to intelligently analyze a typical debtor's financial problem includes the following:
1. The number of debts owed by the debtor.
2. The approximate amounts owed by the debtor.
3. Determination of whether the debt is dischargeable, whether the debt is secured, and whether there are any codebtors.
4. Whether the debtor wants to repay the debt, discharge the debt, etc.
5. The debtor's assets (real and personal property owned by the debtor).
6. Whether foreclosures, repossessions, garnishments, attachments, or other actions that may require immediate bankruptcy relief have been initiated or threatened against the debtor or the debtor's property (and, if so, by whom).
7. The debtor's income from all sources.
In most cases the above information should enable the attorney to propose an appropriate remedy for a typical debtor. The remedies available to most consumer debtors include: (1) determining the debtor's liability for a significant debt, (2) an out-of-court agreement or settlement with the debtor's creditors, (3) filing a proceeding under chapter 7 of the Bankruptcy Code, and (4) filing a proceeding under chapter 13 of the Bankruptcy Code.
