Des Moines, IA (Law Firm Newswire) May 11, 2011 – Last year was really rough for people declaring bankruptcy. Over 1.5 million Americans filed and started over afresh.
“I get asked this question quite a lot when people come to me for a consultation: ‘Can I avoid bankruptcy?’ Overall, that is a tough question to answer, as there are many variables that affect whether or not to file, such as the economy, what your financial practices are like and what your present circumstances are,” said Kevin Ahrenholz, an Iowa bankruptcy lawyer.
Typically, whether or not a person does file bankruptcy is a matter of personal choice and personal circumstances. While some elect to keep on struggling to pay their debts, others realize that they will not get on top of things without filing. “When to toss in the towel is a very personal decision, one that a lawyer cannot make for you. However, they can certainly assist you in choosing a right route to follow for your particular situation,” Ahrenholz said.
The obvious place to start when considering bankruptcy is to find out what the legal definition of bankruptcy means. “It means when your present income, plus cash reserves, cannot pay all the living expenses, pay interest on loans and/or reduce the principal on the loans for five years, you’re legally bankrupt. Why five years? That’s the max number of years a bankruptcy court lets you work your way out of bankruptcy protection,” Ahrenholz said.
“But, back to the question about avoiding bankruptcy. To do that, you would need skill, some luck and a lot of planning. There are times when all three things come together to make it all happen, and there are times when only one of the triumvirate is present. Timing also plays a large part in whether or not you need to declare bankruptcy,” Ahrenholz said.
These days there are a number of common reasons why people file for bankruptcy protection. They may include being unemployed, bad business decisions, bad advice or timing, a lousy economy, health issues and failure to pay bills on time. These things happen to anyone and most often, they happen through no fault of their own. Most Americans do not have the financial reserves to survive being laid off and having a medical issue at the same time. In fact, most are lucky to have some money to put food on the table.
“While planning to avoid bankruptcy is an admirable goal, even if you do have a higher education and skills that are in demand; that does not necessarily guarantee landing a job. It does not shield anyone from health issues either. You could have the best education in the world but not be able to find work,” Ahrenholz said.
The bottom line is that people cannot always avoid bankruptcy and when the need arises, make sure to make the first phone call to a qualified Iowa bankruptcy lawyer for expert assistance dealing with the complexities of handling all the financial issues.
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