Thursday, December 27, 2012

Can Bankruptcy Be A Part Of Wise Financial Planning?

In short, YES.  There are basic commonalities that seem to flow through all financial planning advice – such as, live within your means and save for the future.  The path to reach those goals, however, can be vary greatly depending upon who is giving the advice.
As a bankruptcy attorney who holds an MBA degree and who formally worked as a CPA, I spend many hours a week counseling clients on how to develop a household budget, foster proper spending habits, and develop realistic saving goals.  In working with clients, I try to look at each situation broadly and realistically.  More often than not, the main inhibitor to saving for the future is overbearing debt.  Simply put, once a person sheds their debt, the individual/family will see an immediate increase in disposable income.  Disposable income can then be put to work to build a stronger financial future.

So, why is bankruptcy not on the usual list of discussion topics of financial planners? Well, because these professionals are typically not attorneys and they are prohibited from giving legal advice.  Further, they often lack a solid understanding of how bankruptcy can be used as a positive tool to move someone toward financial freedom.  Lastly, for some, they simply have a financial incentive to steer people away from bankruptcy and into more costly and complex work-out solutions.

To be sure, bankruptcy is not a proper option for everyone.  However, when used appropriately, bankruptcy is an inexpensive and effective tool in well-rounded financial planning.  Consider that Donald Trump, Thomas Edison, Walt Disney, and Benjamin Franklin all filed personal bankruptcy. Where these individuals financially unsuccessful?  Not by any measure.  So, why should you (or anyone) be treated differently? 

My focus as a bankruptcy attorney is to find the best solution(s) for my clients.  In doing so, I will regularly consider many different legal and non-legal options, including non-bankruptcy options.  I look at my role as a bankruptcy attorney to include putting the client on the right track once the case is over so that s/he will have a brighter financial future and be able to reach those long term goals of living within one’s means and saving for the future. 

If you feel a bit overwhelmed by your debt, act now by giving us a call.  We’ll have a frank and candid discussion of all your financial planning options.  The sooner you act the sooner you can map out a plan to get yourself on track for a brighter financial future.