Over the past few years there have been many Americans that have taken the time to visit a bankruptcy attorney and see if filing bankruptcy has something to offer them. During the last decade credit card debt has vaulted to one of the main reasons for bankruptcy filing. Just like a payday loan, the interest rates that credit cards have if left unchecked will destroy anyone's financial well-being. When people get overwhelmed with unsecured debt problems they first try to negotiate something with the creditors that in the beginning will offer nothing except threats. After having a conversation with their creditors the next stop is the bankruptcy attorney to see if they qualify for Chapter 7 bankruptcy or of a Chapter 13 could help in their situation. When it comes to credit card debt, Chapter 7 bankruptcy is king. This totally depends on the situation of the debtor. If the debtor has five or $6000 in credit card debt, it's probably not a good idea to file for bankruptcy. First of all, the cost of a bankruptcy filing and the fee a bankruptcy attorney will charge will wipe out the benefits that filing bankruptcy has to offer.
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Sometimes a bankruptcy attorney will get potential clients walking into their office with similar circumstances. There is no minimum amount of debt that a debtor is required to have two file for bankruptcy, but it should be used when it's impossible to pay the debt back. The typical rule of thumb for a bankruptcy attorney is generally around $20,000 mark. Otherwise, they will usually discourage a person from filing bankruptcy because the benefits are there and that person will suffer damage to their credit. If a person is filing for bankruptcy and going to have their credit dinged, it's a good idea for them to make it worth their while.
While sometimes filing bankruptcy doesn't make sense for a debtor, advice from a bankruptcy attorney can be invaluable. Over the last few years, creditors have become more aggressive in their collection tactics. Lately, they rarely wait around for a customer to negotiate something with them before filing a lawsuit against them. If the debtor doesn't fight the lawsuit, the creditor will get a judgment against them that will be recorded in the County of record. The creditor will ask the judge for that judgment to include the interest owed, the attorney's fees and court costs. They will also ask for interest to accrue until they collect on the debt. Usually, the creditor will have their attorney file a wage garnishment against the debtor within 30 days of receiving the judgment if the debtor doesn't come forward to pay it.
This is a common situation that is heard at law offices nationwide. People facing a lawsuit usually visit the bankruptcy attorney to see if filing bankruptcy will stop the lawsuit. Filing for bankruptcy will stop a lawsuit, but at what cost? If it's for the amount of $5000, most attorneys will tell the individual to work out a payment plan to avoid the lawsuit with their creditor. If it's for a lot more money, filing bankruptcy is the silver bullet. After the bankruptcy attorney files a petition, and automatic stay is put in place that will stop the creditors in their tracks. The automatic stay will stop all collection activity including phone calls, letters, lawsuits, foreclosure, wage garnishments and judgments. Filing bankruptcy is the most powerful consumer tool out there, but only should be wielded in the proper situations.
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