Questions about debts or bankruptcy? Call Doug Beaton, a local specialist in American bankruptcy law.

Not many people would file for personal bankruptcy unless it was advantageous to do so. As a matter of fact, one of the best reasons to talk to a bankruptcy attorney before you file is just that — to see if bankruptcy is in fact in your best interest.

For most folks, especially those with high-interest credit card debts, there are some obvious advantages. But there are also some less obvious advantages as well — call them pleasant side effects, if you will.

Among the obvious bankruptcy advantages, your bills will either go away, or be controlled by a Chapter 13 plan. For most filers, credit card and medical debts are simply eliminated. Also, creditors stop calling, writing, and suing you — its part of the law. This gives you a fresh start, a financial do-over where you don’t start each month behind the eight-ball.

But you also get some unintended benefits when you file. Consider:

* Your positive outlook on life is restored. You get your pride back. If you walk around worrying about the mortgage or the car payment constantly it is tough on your self-esteem and can get pretty depressing. Once you file bankruptcy, however, those feelings will stop.

* Strange but true — your credit score will improve. The biggest effect on your credit score is late payments. A bankruptcy won’t help your score immediately, but since the bills that weren’t getting paid will be gone, you can rebuild your credit, usually in about a year.

* Your whole life comes back. Money problems are often damaging to your home life and relationships. When you and your spouse do nothing but worry about where the rent is coming from, you can get easily irritated and start fighting. With the source of the trouble removed, tenseness and bickering becomes a thing of the past.

If you’re having trouble meeting your obligations, talk to a experienced local bankruptcy attorney. It might just what you need to turn your life around.

By Doug Beaton

Significant increases in credit card debt within six months of a bankruptcy filing is often treated as a red flag by the bankruptcy trustees who are charged with policing the system. That does not mean that you cannot use a credit card for six months before you file. It means that large charges or a substantial increase in credit within the prior six months could draw scrutiny.

In a perfect world, trustees would be able to sort out acceptable reasons for the increased debt from fraudulent ones. People who after they see bankruptcy as a good option intentionally run up credit cards to buy things they want but do not need are trying to take advantage of their creditors and the bankruptcy system; there is no problem with trustees coming down hard of this type of debtor abuse.

On the other hand there are folks who file bankruptcy reluctantly after a financial setback such as a job loss, pay decrease, or unexpected large debt. These people will use credit cards to buy necessities because they hope that their fortunes will improve and they can avoid bankruptcy. These individuals should not be penalized for increasing debts.

But even those with acceptable motives are taking a risk when they borrow in order to buy time to work out of their financial situation. If they are unable to increase income, or decrease expenses, these well-intentioned debtors may still have recent debts challenged in Chapter 7 bankruptcy.

In order to avoid problems at the meeting of creditors, advance planning with a bankruptcy lawyer is important. If you are in the Merrimack Valley and are looking for bankruptcy assistance with credit card or other debts, feel free to give me a call.

By Doug Beaton