Bankruptcy: A powerful retirement planning tool.

When individuals are talking to their financial adviser about their future and their hope to retire, the financial adviser should have at least a basic understanding of the bankruptcy process.  While Bankruptcy is an extreme measure that should not be taken lightly, it is also a powerful tool for those in debt to free themselves of their past mistakes and get on track for a bright future.
Often times I see individuals who have been seeing a financial adviser for years.  He has advised them how much money they need to save for retirement.  He has advised them when they should start saving and how much they should be putting away each month.  He may even have helped them develop a plan to pay off their credit card debts over the course of the next decade.  What I rarely see is a financial adviser who has taken the time to review the individuals case with a qualified bankruptcy attorney.
Advising a client to spend the next decade of his or her life repaying credit card debts is simply not sound financial advise.  First, a decade is simply too long of a time to expect individuals to spend repaying old debts.  Second, the money being used to repay those old debts, often with absurd amounts of interest, could be used to help advance the retirement goals of the client.  Third, a decade is simply too long of a time to plan around “unforeseen circumstances.”  Therefore, even if the client is able to pay off the debt, they may find themselves disabled, laid off, or changing careers.  Meanwhile, they have no savings to fall back on because their financial adviser had them spend a full decade dealing with past mistakes.
It is important that individuals who have a large burden of debt, work with both a financial adviser AND a bankruptcy attorney to be sure that they have all of the options available to them to help them build a brighter future.  If you are in need of financial advice, or if you are a financial adviser who would like to sit down with me to discuss this powerful financial planning tool, please call me at 248-629-6367.