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Bryan P. Keenan

Chapter 7 bankruptcy might be preferable to other debt solutions

When a person is dealing with significant debt in Pittsburgh, they might feel a reluctance to consider personal bankruptcy. Television, the internet and other media entities have many advertisements that extol the virtues of alternatives to bankruptcy, while claiming that bankruptcy will be a negative. It is important to understand the truth about Chapter 13 bankruptcy and Chapter 7 bankruptcy before turning to ideas that can do little more than make the financial problems worse.

Many companies will push debt consolidation. With this strategy, the person's financial obligations will be packaged into a single loan. There will be a monthly payment, and it is perceived to be a lower amount than what the person is otherwise paying. Credit counseling services will assist the debtor in a reorganization of the financial situation with a plan to pay the debts without needing to go through bankruptcy. Some will suggest the person get additional loans to pay off what is owed and steer clear of bankruptcy. Examples include borrowing money on the equity of a home, borrowing against assets or getting a second mortgage.

While these might seem viable -- especially to a person who is reaching a point of desperation -- they are often simply moving the debt from one creditor to the other. It might delay the process of needing to file for bankruptcy.

For many, it is just that: a delay. Eventually, their circumstances will reach the point where they still need to file for bankruptcy except they might owe more than they did before and lose equity in their property. Some might even suggest transferring assets to another person. This is not an effective solution and if the bankruptcy is filed, the property will still be viewed as belonging to the debtor.

For people who own property and have income, Chapter 13 and Chapter 7 bankruptcy may be a wise step, regardless of negative statements about it from those who are attempting to get debtors to use their services. The key though is understanding all of one's options.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
Suite 101
Pittsburgh, PA 15220

Phone: 412-923-4941
Fax: 412-444-0158
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