Bankruptcy

When Will I Be Free of Debt if I Make Payments On My Credit Cards? Should I File a Chapter 7 or 13 Bankruptcy in Arizona?

By Joseph McDaniel, Esq.

Why?

Well, if somebody wakes up, and can't remember what, where or how much he was drinking last night, and can't remember the names of the people he woke up beside in bed, and he asks himself, "I wonder if I might be an alcoholic", you know he probably is an alcoholic. People who aren't addicts seldom feel the need to ask the question in the first place, so the question itself is diagnostic.

Equally, when somebody has reached the point that they have progressed past denial, and past anger, and past blame, and then asks the question, "should I file a bankruptcy", the question itself is diagnostic.

Now, there are various analytical tools in the "should I file a bankruptcy" process. One is age. If you're 60, and you want to retire by the time you're 65, and you have a hundred thousand in credit card debt, you might need to file a bankruptcy.

Or if you have a now-unsecured second mortgage debt of two-hundred and fifty thousand breathing down your neck, and you make seventy-five thousand a year, and have four children, you might need to file a bankruptcy.

Or if you're twenty and you have seventy thousand in credit card debt, and you're in default, and you are about to marry a nice person with good income and good credit, you might want to file a bankruptcy. Or not. You might be a little capricious and just want to surprise them on the wedding night! "Honey, you remember when you said I was priceless? Did you really mean that?"

There's another analytical tool, The Joseph C. McDaniel Rule of Inevitable Bankruptcy Filing, which looks at the amount of yearly gross income and the amount of unsecured debt. Of course, it's just a rule of thumb, and a filing isn't really inevitable. Just very, very likely.

Then there's an actual, factual free, online credit card payoff calculator, courtesy of CNN.

If you play around with that a little bit, it might bring you a little clarity in the decision-making process.

After that, find a free online retirement calculator of your choice and figure out what happens if you make the same payments into that, rather than into the 15-year payment process on your $120,000 in unsecured debt.

That may also give you a moment of clarity, you know?

Then, on the other hand, maybe you just go to Zillow.com, to find the value of your house, as opposed to the debt on your house; that's been known to bring clarity to the terminally befuddled.

But, frankly, this is a depression, no matter what anybody else may be saying. So crunch your numbers, make your choices, and you and your family will get to live with the consequences. And all of us, including me, will keep our fingers crossed that hyper-inflation isn't right down the road.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on April 18, 2010 (boomark / email).