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Question for the Money Doctors

Question submitted on Nov 14, 2011.

Question

My father, age 82 has credit card debt of $36,000 for which he pays $760/month. He is short $300/month in paying his regular monthly expenses. Should he consider bankruptsy?

Answer

Hi - It sounds like you father is in a bind but bankruptcy should be your father''s last resort.  

Before bankruptcy, consider calling a "non-profit" credit counselor (i.e. http://www.greenpath.com/).  Since these credit counselors are non-profit groups, they usually have your/his best interest in mind.  They can also give your father practical, unbiased advice on budgeting, debt restructuring, and other options before talking to an attorney.  

If he is still considering bankruptcy, have him contact a reputable attorney who specializes in bankruptcies (one you trust).  Sometimes, your CPA can provide you a referral if you don't know who to call.  This attorney should give your dad his legal options during the first meeting (which should be complimentary) and will help him make an informed decision. 

Hope this helps!


For additional information visit http://www.360financialliteracy.org/