The title of this post is probably a little inaccurate, because we all know financial problems naturally lead to stress.  Maybe it should be avoid “most” or “some” of the stress. Whether one is starting a plan to pay off their debt, following a Dave Ramsey plan, or they have to consider a Bankruptcy case, the first step is to recognize there is a problem to be addressed.  The second step is to take control of the situation and start work on a plan.  Sit down at the kitchen table and open up all those bills and notices you have been avoiding, and all your bank statements.  Leave behind the “out of sight, out of mind” attitude and roll up your sleeves.  If you have judgments, pending lawsuits, garnishments or foreclosure notices, calmly tell yourself  “OK, I have an emergency situation, but I am going to take control of it.”  This really is a huge step.  If it is an emergency or could turn into one, get a notebook and make a “to do” list.  Do you need to review your budget (or create one)?  Cut unnecessary expenses?  Sell some unnecessary items?  Get a part time job for a few months?  Do you need to make an appointment with a Bankruptcy lawyer or two, just in case?  Start the process of identifying good lawyers in your area and make those calls.  All it costs you is a little time and the information is usually very valuable. It may even be a big relief if the lawyers tell you your situation is not as bad as you think.

The reasons for proper planning in a Bankruptcy case are numerous.  Timing can be very important for the Means Test.  Past payments to friends or relatives, or transfers of property, can be reviewed to see if a Trustee might try to get them back.  There is time to explore settlements with creditors.  Appraisals or brokers opinions can be ordered to see if liens can be stripped from a residence.  The budget can be planned.  This list can go on and on.  The other side if the coin is waiting until the last possible minute.  The reason that the biggest Bankruptcy filing day of the month in Georgia is the day before foreclosure day (the first Tuesday of the month) is because people delay and ignore the emergency.  We often get calls early on the very day of foreclosure.  The list of negatives that comes with this is equally long.  There is no time to review the Means Test, transfers of property, or properly plan exemptions.  You are simply stuck with your situation as it is that day.  You cannot review Chapter 7 or Chapter 13 to see what might work best for you, and how you might qualify for each.  There is no time to budget for the fees and expenses of the case.  Your choices of lawyers is very limited, and you will likely have to make a last minute appointment with a “volume” Bankruptcy firm who will run you through the office just to get paperwork signed.  The stress level might go through the roof, and it could get worse.   Most of this stress can be avoided by recognizing the emergency situation early on, and starting a plan.  This is the time to roll up those sleeves and take control!