If I asked 10 people to tell me one word they thought of when they considered Bankruptcy, 9 of them would say “broke.” Bankruptcy should involve lawyers and lawyers are not especially cheap. So, how do you pay for your Baltimore Bankruptcy when you’re broke? The answer may surprise you.
5 Tips to Pay for Your Baltimore Bankruptcy
Pay for your Baltimore Bankruptcy with your Tax Refund
It’s tax refund season. Many of my clients get at least a small amount of money back in taxes every year around this time. Most had earmarked it to pay their rising credit card debt, their delinquent mortgage or save their car from imminent repossession. Typically using the refund to pay for any one of these things leaves other bills unpaid. Why not use that refund to pay your attorney to help you address all of your financial areas of concern.
Pay for your Baltimore Bankruptcy with Your Minimum Payments
Inevitably 20-30% of my prospective clients are still struggling and making minimum payments on some of their credit cards. They do this even while other debts have been languishing or even moving on to litigation. If you cannot afford to pay your bills while cutting back in order to keep some of the wolves at bay, direct those payments into savings or to your Baltimore Bankruptcy lawyers. Get out of debt faster.
Pay for your Baltimore Bankruptcy with the help of family
A large number of my clients receive family assistance to help them afford their attorneys fees. For the family members, it’s almost as much financial relief for them as it is for my clients. Often my clients have been dependent upon family for help in fending off creditors, avoiding garnishment or foreclosure, so the final resolution of Bankruptcy will provide relief to the entire family, not just my clients.
Pay for your Baltimore Bankruptcy by cutting unnecessary costs
You would be amazed at the number of clients who come to see me who are continuing to pay for car insurance and car notes for vehicles that they have no intention of keeping. If you are maintaining car notes or insurance for an automobile and you intend to surrender that car in Bankruptcy, you should seriously consider voluntarily returning that car ahead of your case. How? Call your lender, advise them that you are surrendering the car and request that they give you a drop off location, usually a car dealership. Take the car to the dealership, leave the car with the keys with a manager at the direction of your lender, take the tags and go. Remember, before you cancel insurance, turn your tags into the MVA. Those fines are expensive, and not dischargeable in Bankruptcy!
Pay for your Baltimore Bankruptcy in installments
Absent family help or a tax refund, very few of my clients can afford to pay attorneys fees and court costs all at once. So, how can you pay for your Baltimore Bankruptcy? In installments. We can set you up on a payment plan to pay off fees over periods ranging from a few weeks to a few months.
3 Things NOT to do to Pay for your Baltimore Bankruptcy
Do not pay for your Baltimore Bankruptcy with your credit card
It is fraud to use your credit cards when you know you are filing for Bankruptcy. Even if you intend to “keep paying that card” it will cause more trouble than it is worth. Besides, how much of a fresh start are you going to get when you come out of Bankruptcy still owing money on a high interest credit card debt.
Do not pay for your Baltimore Bankruptcy with payday loans
Payday loans are illegal in Maryland. Unfortunately that doesn’t prevent online payday lenders from preying on desperate Marylanders. These loans often have contract interest rates close to or above the usury limits, but it’s ultimately the short term nature of the loans that wind up costing so much money. Before reforms took place in the early to mid 2000’s I would see clients coming in who had literally paid thousands of dollars on a short term $300 payday loan. The problem is that you borrow $300 until payday, then when payday comes you pay back as much as $450. But, you can’t afford to pay $450, so you have to borrow another $300. And next payday you’re paying back $450 again. In two pay periods you would have paid $300 in interest for a $300 loan. Now, imagine that you still couldn’t afford that, so you wind up borrowing that $300 again. So, now you’ve paid $600 and still owe the original $300. Dangerous.
Do not pay for your Baltimore Bankruptcy by closing out your retirement
401k’s, IRAs, 403b’s. Whatever kind of retirement savings you have, it’s often not worth the tax liability to withdraw from those accounts to pay for your bankruptcy attorney. Sometimes there are no other options, I get that. What I would implore is that you do not withdraw any more than is ABSOLUTELY necessary. We are limited in the amount of cash we can exempt and protect in bankruptcy, but unlimited in the amount of qualified retirement accounts we can protect.