“I don’t know what to do.”

“I’m stuck, which way should I turn?”

“I’m procrastinating because I don’t know what will bite me.”

This happens all the time to everyone in their life. EVERYONE.

Unfortunately, most people are paranoid of everything falling apart or failing IF they make a critical decision.

When I work with clients (who range from CEO’s to Solopreneurs), I help them understand there are only three (or four) scenarios:

1. Things will get better. (sometimes much better)
2. Things will stay the same.
3. Things will get worse.
4. The world will veer from it’s axis, plunge into the sun, and we will all die.

I usually then say — If you make a decision and you use my model, 2 of the 3 choices are either good or average. One is bad.

I don’t know about you, but I like the odds (2 out of 3). Most people focus on #3 — the bad (or worse). All the time.

To increase your chances of hitting the upper end of the curve or lessening the lower end, try to mitigate certain unknowns.

Here’s a typical example: Apple launched a new iPad into the marketplace back in March. Management at Apple had three scenarios when developing/launching the iPad:

1. It either will be a hit and sell more than the iPad 1.
2. It will match the sales of the iPad 1.
3. Due to increase competition, or other factors, it will sell less than the iPad 1.

Steve Jobs, Jonathan Ive and a host of other Apple troops were out in force mitigating the last scenario. The iPad2 was a success.

They’ve done their market testing. They’ve surveyed the marketplace. They’ve got info on their competition and a host of other mitigating behaviors. They’ve done their homework.

Most of the time, your homework is to sit down and clearly think about the results of your decision. Understand most (not all) of the permutations – what might happen. And develop alternatives if things go awry. But also think about the positive and average scenarios too. Doing this will make it easier.

Shameless Plug: If you have financial difficulties, speaking with a qualified professional is the way to go. They will take all the emotion out of your decision and help you look at your options factually and in a bright light. My friend George Weber helps you do this.

And then make a decision. “Lose your sleep before your decision, not after it.”

The answer depends on when the most recent chapter 7 was filed and if a discharge order was granted by the court.  At least eight years must pass between the filing of the first chapter 7 petition, in which debts were discharged, and the filing of a subsequent chapter 7 petition.  If the last chapter 7 bankruptcy was filed less than eight years ago, you cannot eliminate your new debts by filing another chapter 7.  If non-bankruptcy options for dealing with your debt won’t provide the necessary relief, you are left with two options.  The first option is to wait to file the subsequent chapter 7 bankruptcy until the eight years pass after the first filing.  If waiting is not an option, you may be able to stop creditors by filing a bankruptcy petition under chapter 13 of the bankruptcy code.  Unlike chapter 7, which is relatively quick and easy, chapter 13 is a debt repayment plan that may last for three to five years.

Because of the limitations on discharging debt in multiple bankruptcies, it is important to carefully plan your bankruptcy filing. Be sure to discuss any foreseeable changes in your financial situation with your attorney and to carry adequate insurance before filing the petition. With proper planning, you can reduce the risk of needing to file another bankruptcy petition down the road.

When you file the bankruptcy petition with the court, your bankruptcy estate is automatically created.  Your property interests include all personal property, all real property, and any other interest in property you might own at the time the bankruptcy petition is filed.  Property of the estate is not limited to property located in the United States.  If you have property anywhere in the world, that property is part of your bankruptcy estate.

Generally, the bankruptcy estate’s interest in property is no greater than the debtor’s interest at the time of the filing of the bankruptcy petition.  The primary exception to this rule is for property recovered by the bankruptcy trustee by use of the trustee’s avoidance powers.  These powers enable the bankruptcy trustee to undue certain transfers of property and payments to creditors that occur before the bankruptcy petition is filed.  Another common exception to this rule includes property acquired by the debtor within 180 days of the petition filing by any of the following means: inheritance, property settlement agreement with the debtor’s spouse, or life insurance policy payout.

Much, if not all, of the property comprising your bankruptcy estate will be protected from creditors and will be yours to keep once the administration of your case is complete.  Before filing your petition, your attorneys will explain to you what property is protected and what, if any, is not.  Your attorney’s goal is to eliminate any unpleasant surprises that could arise in your bankruptcy case.

* Acknowledgment for “The Pug Father” at http://www.flickr.com/photos/fleur-design/1394346975/ for use of his photo.

In addition to the person who filed the chapter 7 bankruptcy petition, the meeting is also attended by the debtor’s attorney and the chapter 7 bankruptcy trustee.  Although creditors rarely attend the meetings, they are notified of the meeting and do have the right to attend.

The bankruptcy trustee is usually a bankruptcy attorney who is hired by the Office of the United States Trustee.  In addition to administrative duties, the bankruptcy trustee is responsible for collecting and selling any unprotected property held by the bankruptcy estate and then distributing the proceeds to creditors.

The bankruptcy trustee will ask the debtor a series of questions about events leading up to the bankruptcy filing and the bankruptcy estate.  All answers must be truthful and as accurate as possible.  The debtor gives all answers under penalty of perjury.  Giving false statements at the meeting of creditors is a crime and every year, some dummy goes to jail for trying to cheat the system.  Don’t be that dummy.

The Law Office of George H. Weber, LLC will prepare you for the meeting.  Either in person or over the phone, your attorney will give you an idea of the questions you will be asked at the meeting.  You will then practice answering the questions with your attorney so that you will feel as comfortable as possible when your meeting takes place.  With proper preparation, there should be no surprises.  Our goal is to make the entire process as efficient and stress-free as possible.

It’s generally easier to find more sources of income if you take advantage of all the programs given to you. These programs change from time to time, so be sure to research them more in depth before relying on their assistance.

If you have recently lost your job or have had your hours significantly reduced, you should apply for unemployment compensation as early as possible. You have the greatest chance of getting unemployment pay if you’ve been laid off, but it’s also commonly given to those who have been fired or who have quit. The National Employment Law Project (NELP) has a lot of useful information. You can call them at 212-285-3025, or you can look at their website www.nelp.org.

If you are still employed, you can apply for the earned income tax credit (EITC). This is based on your income and the size of your family. If you qualify and file the necessary tax returns, you can get this tax credit even if you don’t have to pay taxes. To see if you qualify, contact a tax specialist or go online and use the IRS EITC Assistant at www.irs.gov.

The Temporary Assistance for Needy Families (TANF) program exists in every state and assists those with a minor child or a pregnant woman in their family. You can find the application form and instructions at www.acf.hhs.gov/programs/ofa/.

Food programs are varied. Food stamps supplement your monthly food budget. If your income falls below a certain point for your family size, you pay less for food and may get emergency food stamps. You can meet with food stamp officers (located within public assistance offices) face-to-face or by telephone or have an application mailed to you. If you are not initially accepted, make an appeal before the deadline expires. For more information, visit the U.S. department of Agriculture website www.usda.org, or contact the Food Research and Action Center at 202-986-2200 or www.frac.org.

If you are a pregnant or have a child less than five years of age, you should consider applying for assistance from the Women, Infants and Children program. It provides food important to mothers and children in the early stages of their development. America’s Second Harvest does a lot of food drives. Contact them at 800-771-2303 or visit their website www.secondharvest.org.

The minimum age requirement for Social Security is 62, and the full requirement age is 65. If you retire between 65 and 62, you will get some benefits but not all the benefits of Social Security. However, this may not be for you—to get the benefits from Social Security you have to have been employed for a long enough time, and sometimes retiring early reduces your over-all benefit. Call 800-772-1213 or visit www.ssa.gov to get more information.

These are only some of the ways you can supplement your income to provide more buying power during your time of need.

Chapter 7 bankruptcy can be a great way to eliminate unsecured debt.  Credit card debt, medical debt, and even personal loans that are not secured by your home or personal property are ordinarily unsecured.  Many, if not all, of these types of debt can be discharged in bankruptcy.

Bankruptcy is intended to provide a fresh start for those who are oppressed by unrelenting debt.  Once your debt has been discharged, you can manage your finances and start preparing for your future.  If you do not like the prospect of paying for the next 80 years for items that you already have, you may want to consider the bankruptcy option.

Bankruptcy is what we do, and if you are interested, we would like to talk to you about your options.  If it is a good option for you, we would be delighted to file your bankruptcy petition.  Please call our office for a free initial consultation.

When you file bankruptcy an “automatic stay” automatically protects your home collection action from creditors, even if you are behind on your payments, and even if your house is already in foreclosure.  The automatic stay is temporary, and under certain circumstances it may even be unavailable.  It is best to talk to a professional if you have filed a previous bankruptcy, even if you did not receive a discharge.

Many people find that they are better able to afford their home after filing bankruptcy because money that was going to pay unsecured creditors is now available to make mortgage payments.

When you file for bankruptcy, if you do not “reaffirm” the mortgage, you will not be personally liable to repay the loan amount.  This does not mean that you can keep your house without paying.  What it does mean is that if, for any reason, you can no longer make your mortgage payments and your home is repossessed, the lender cannot sue you to for the difference between what you owe and the amount the bank receives when it is sold.  For example if you owe $800,000 for your house, but the lender can only sell it $700,000, the lender could ordinarily sue you for the $100,000 shortfall.  When you file bankruptcy but do not reaffirm the mortgage, the bank cannot sue you for that $100,000 shortfall.  At most, the bank can take the house, as collateral for the loan, but it cannot sue you additionally.

On occasion, people will reaffirm the mortgage in bankruptcy.  When you reaffirm your mortgage, it means that you accept the contract anew, as if the bankruptcy never happened.  It also means that you will be liable for any shortfall if, for any reason, you are unable to continue making your mortgage payments.  Sometimes it is advantageous to reaffirm if a lender sweetens the deal by offering better terms on the mortgage.  Each lender has different practices and so there is no is no guarantee that your lender will make any accommodations in the loan terms as incentive to have you reaffirm.

If keeping your home is a priority to you, and if minimum payments on credit cards or medical bills are what prevent you from keeping up on your mortgage, bankruptcy may be just what you need to help you to keep your home.

Many IRAs and other retirement plans are protected, or what we call “exempt property,” in bankruptcy. This means that while they are listed as assets on your bankruptcy petition, the bankruptcy trustee will not look at it as an asset to distribute to creditors. Under certain circumstances, your retirement will be fully protected in a bankruptcy while your credit card debts will be fully discharged. While it depends upon the particular facts of your case, the potential for substantial debt relief is real.

Before you act, know whether you’ll have to pay any penalties or fees for taking out from your retirement funds to make debt settlement payments. Also, any debt that is “forgiven” by a lender is reported to the IRS, and can result in additional tax liability. However, debt discharged through bankruptcy is excluded from the general rule for reporting canceled debt as income.

Consider all of your options and all of the costs involved before you embark on a debt management plan. Attorney Weber, at the Law Office of George H. Weber, LLC can review your situation during a free consultation and advise you as to your options, and the consequence, of a variety of debt relief options.

A Chapter 7 bankruptcy may help you out of this crisis and set you back on the road of financial stability.  While there are some rules you must follow, much credit card debt can be eliminated through bankruptcy.

Imagine using that money you’re now spending on minimum credit card payments and instead using it to pay your mortgage.  Imagine lifting the heavy burden of unmanageable debt and grabbing hold of the reins of your financial situation.  Under the right circumstances, bankruptcy can be a liberating and life-giving process that gives an individual a financial fresh start and hope for a better future.

The attorneys and staff at the Law Office of George H. Weber, LLC want to help deserving people enjoy the benefits that bankruptcy provides.   If credit card debt is getting you down, come to us for your free consultation, to find out what bankruptcy can do for you.