BAILING OUT; BANKRUPTCY PROTECTION: THE LAST-RESORT CURE.Byline: Ben Sullivan Daily News Staff Writer The bills just keep coming. Even without new spending your debt is growing faster than your ability to pay it off. Creditors are banging on the door, harassing your family and giving you an ulcer. Sound familiar? Then it's time It's Time was a successful political campaign run by the Australian Labor Party (ALP) under Gough Whitlam at the 1972 election in Australia. Campaigning on the perceived need for change after 23 years of conservative (Liberal Party of Australia) government, Labor put forward a for defensive action. And for thousands of Americans each year, that means filing for personal bankruptcy Personal bankruptcy is a procedure which, in certain jurisdictions, allows an individual to declare bankruptcy. In other jurisdictions, bankruptcies are reserved for corporations. protection. It's not for everyone. Plenty of people manage to dig their way out of debt with hard work and the help of a consumer credit counselor. But if your financial woes have ballooned beyond the realm of convenient monthly payments, read on. Who should file? Because of the stigma attached to it, choosing to file for bankruptcy protection is a highly personal decision. In general, however, it is an option for people who owe more money than they can reasonably expect to pay back. A rule of thumb is that if you owe to your combined creditors more than a year's gross salary, it's time to consider filing. Also, if your worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension financial situation is affecting your health and relationships, it's worth looking into bankruptcy. Consider your credit There are few things worse for a personal credit rating than filing for bankruptcy. For at least seven years it can hurt your chances of getting credit cards, home and auto loans, a lease on an apartment and even some jobs. Then again, if your existing credit is already so poor that you can't get these, starting from scratch could be wise. Spend now, save later At a minimum, invest in one of the many how-to guides available at most larger book stores before filing. (The Nolo Press annual guide is particularly good.) Better still, hire an attorney if you can. About half of all people who file for bankruptcy go it alone, so clearly it can be done. But bankruptcy law is an evolving beast and any book will be at least a bit out of date by the time it is published. A good lawyer will be abreast of the latest ways to let you keep more of your money and belongings. The going rate for a reputable bankruptcy attorney is about $1,000, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. David Hagen, a partner with Woodland Hills-based Merritt & Hagen. That might sound like a lot to someone who already can't meet his financial commitments. But with bankruptcy looming, many people stop paying their bills, freeing up extra household cash that could go to covering attorney fees. Spend now, save later, Part II If bankruptcy looms, say a year down the road, consult with an attorney now. For example, shifting your retirement savings to a 401(k) account from an IRA Ira, in the Bible Ira (ī`rə), in the Bible. 1 Chief officer of David. 2, 3 Two of David's guard. IRA, abbreviation IRA. protects it from seizure. Other steps taken well before your actual filing can similarly protect your assets. Tally ho Before filing, or even meeting with an attorney, prepare two lists - one, of all your creditors, the other of all your assets. Be sure to include the name, address, account number and account balance for each creditor. If you leave any of this information off, or omit o·mit tr.v. o·mit·ted, o·mit·ting, o·mits 1. To fail to include or mention; leave out: omit a word. 2. a. To pass over; neglect. b. a creditor altogether in your filing, you risk losing your protection from them. It's also fraud. One exception - and a potentially helpful one down the road - is that you do not have to declare a credit card on which you have a zero balance. Once you emerge from bankruptcy, that card can then help you rebuild your credit with small, regular purchases that you pay off immediately. What's not covered not covered Health care adjective Referring to a procedure, test or other health service to which a policy holder or insurance beneficiary is not entitled under the terms of the policy or payment system–eg, Medicare. Cf Covered. ? To the beleaguered be·lea·guer tr.v. be·lea·guered, be·lea·guer·ing, be·lea·guers 1. To harass; beset: We are beleaguered by problems. 2. To surround with troops; besiege. , filing for bankruptcy can sound like a panacea Some antidote or remedy that completely solves a problem. Most so-called panaceas in this industry, if they survive at all, wind up sitting alongside and working with the products they were supposed to replace. . But there are plenty of debts not covered by bankruptcy protection. They include: Luxury goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. and cash advances incurred within 60 days of filing for bankruptcy. Most state, federal and local taxes unless all of several requirements are met. Alimony alimony, in law, allowance for support that an individual pays to his or her former spouse, usually as part of a divorce settlement. It is based on the common law right of a wife to be supported by her husband, but in the United States, the Supreme Court in 1979 and child support payments. Money you owe from fraud, assault or embezzlement embezzlement, wrongful use, for one's own selfish ends, of the property of another when that property has been legally entrusted to one. Such an act was not larceny at common law because larceny was committed only when property was acquired by a "felonious taking," i. . Wages you owe to others. Student loans less than seven years old. Unlisted debts. Secured debts, or those you've incurred by offering the lender some form of collateral. CAPTION(S): Photo PHOTO (Color) no caption (Man holding out empty pockets) Myung J. Chun / Daily News |
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