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Knowing when bankruptcy is the right choice

Many Tennessee readers may be familiar with Suze Orman. Orman is well known television host and financial advisor who has spent her career educating the public on financial responsibility. Among the wide variety of financial matters that Suze Orman has discussed throughout her long financial career is filing for bankruptcy. According to Orman despite public perception, bankruptcy can actually be very a good option.

When someone is facing serious financial challenges and really does not have the money to pay their bills Chapter 7 or Chapter 13 bankruptcy may be the right decision, according to Orman. Some critics disagree with Orman's assessment, suggesting that she is encouraging bankruptcy. According to Orman, however, if someone stops paying their debts because they do not have the money there isn't much of a difference.

In fact, Orman suggests that the alternative, not paying, is actually far worse. If a person simply decides to stop paying their bills because they cannot afford to and a creditor sues and wins a judgment they will then have the legal authority to garnish the debtor's wages or place a lien on the debtor's home. The legal route of bankruptcy allows a debtor to protect assets and show creditors that they really cannot afford it.

If a consumer is facing serious financial challenges including credit card debt, car loans and mortgage debt it may be worthwhile to discuss the option of bankruptcy with an attorney. The most common type of bankruptcy is Chapter 7 or liquidation bankruptcy. In Chapter 7 the trustee for the bankruptcy estate sells the debtors nonexempt assets, allowing them to keep exempt assets, and discharges the remaining debt. An attorney can help debtors determine whether Chapter 7 bankruptcy is right for them.

Source: CNBC, "The good thing about bankruptcy," Sakina Spruell, Oct. 21, 2013

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
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