For many considering bankruptcy, other options are available
A trip to the courthouse may not be the answer

In a weakening economy, bankruptcy filings are on the rise. But consumers and business owners who are struggling with their finances would be wise to seek counsel before they head off to the courthouse, local experts say.

However, sometimes it can be difficult to find the right place to go, said John Cooper, president of non-profit Consumer Credit Counseling of Central Oklahoma.

"If you go to phone book and try to get us, there’s a whole lot of consumer credit counseling,” Cooper said. "They’re not us, and I don’t know who they are. Some of them look pretty flaky.” Cooper urged consumers to understand what fees will be charged before agreeing to work with a company.

Waiting too long

A growing number of consumers who try to deal with their debts are waiting too long to seek help, Cooper said. For them, bankruptcy may be the only option. About 4 to 6 percent of Cooper’s clients are referred to bankruptcy attorneys, he said.

"The trend clearly has been people are waiting too long” to seek help, Cooper said.

Will Hoch, a director with the Oklahoma City law firm of Crowe & Dunlevy, said personal bankruptcy filings in Oklahoma’s Western District grew 20 percent in October when compared with the same period last year. His firm also is fielding more inquiries from companies that are experiencing financial difficulties, particular from retail businesses.

"I think everyone is hoarding cash, especially the banks,” Hoch said. "With the economy down, we are going to see some dramatic increases in bankruptcies, especially with businesses.”

More problems ahead

The upcoming holiday shopping season will be crucial for some struggling retailers, as many consumers are expected to cut back on spending during these uncertain economic times, Hoch said.

Individuals and businesses struggling with debt should seek out help, and an attorney can be an outlet, Hoch said.

Those looking for help can refer to lawyers listed with the American Bankruptcy Institute, the Oklahoma Bar Association or could seek a referral from their existing attorney, Hoch said. "They can advise you of your rights.”

Lawyers can offer advice on consumer rights regarding debt collection practices, options on dealing with assets and the different types of bankruptcy filings and also handle negotiations with creditors, he said. In some cases, a bankruptcy attorney will advise clients that they don’t need to file bankruptcy, Hoch said.

"The best thing is to be armed with information,” he said. "Even if you decide not to engage counsel, at least you have the knowledge of what it means to go through bankruptcy.”

Help is available

Cooper said his company doesn’t charge for credit counseling, and offers some courses at very low cost. For instance, the business offers a five-hour course on debt management that costs $25.

"I’m thrilled if they can go to the right people and get good advice,” Cooper said. "But don’t spend a lot of money. Sometimes what looks attractive isn’t the best answer.”

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