Over the past 30 years or so, I have seen lots of people make common mistakes. In this time of crisis, lots of people are going to be facing financial calamity. The New York Times has warned of this when the government support program ends on July 30 (“Federal Aid Has So Far Averted Personal Bankruptcies, but Trouble Looms” https://www.nytimes.com/2020/07/17/business/personal-bankruptcies-coronavirus.html?referringSource=articleShare)

So if you think you might be heading for trouble what are the mistakes that could cost you?

MISTAKE 1. First, DON’T PANIC. PLAN. Informed planning is never a waste of time.  This means starting with a budget to estimate what are your basic living expenses, without paying credit cards or other debts besides rent or mortgage, home utilities, and necessary car expenses. We have tools for this on the forms page of our website. https://www.nv-njlaw.com/bankruptcy-forms/ Then calculate what your income is or is likely to be. Then look at all your debt. Is there enough money left over to pay it all AFTER paying basic expenses?

MISTAKE 2. Not paying mortgage, car loans, taxes and utilities first. Many people try to keep up with credit cards or other debts, letting these essential debts slide. They are digging themselves into a hole.

MISTAKE 3. Using retirement funds to pay debts, without careful consideration of options. This money is generally protected from creditors and may be needed for your future.

MISTAKE 4. Selling or transferring assets except as part of a plan with the assistance of qualified professionals.

MISTAKE 5. Not filing tax returns, even if you cannot pay taxes. These debts will compound and usually cannot be escaped even through bankruptcy.

MISTAKE 6. Ignoring or discounting bankruptcy as an option. Put aside feeling of shame or admission of failure. Your first obligation is not to creditors, but to your family and those who rely on you. At the very least, you should explore and learn what a bankruptcy might mean and how it would work for you. Doing that does not mean you will be filing a bankruptcy. It means you have put this option into your list of options. And, while we are on this subject:

• Find a bankruptcy specialist with experience who is willing to listen and understand you and your needs. We have that experience. See our website for more.
• Find one who will take the time to learn about your situation and give you advice tailored to your situation without trying to “sell” you. This is what we do. This takes time and effort but is worth it. This is no time for cheap or “cookie cutter” solutions.
• Don’t rely on “advice” from well-meaning friends, relatives or others who do not have the training and experience. Each case is different, and one person’s experience may or may not apply to you. There is a lot of information out there, (see my blog and website) but also a lot of misconceptions, and poor advice. At the end of the day, you need to know what it means and how it applies to you.
• Avoid “too good to be true” solutions.

We offer a free initial consultation for you to meet us and see how we can help you. Feel free to call or refer people who might need our help.