Bankruptcy by numbers

Credit card companies will continue to solicit your business. Resist.

(1) When should you file bankruptcy? Here’s one rule of thumb: If your credit card debt is more than three to five times your monthly income, it may be time to consider filing.

(2) Remember: You are not alone. Luminaries such as Mark Twain, Henry Ford and Kim Basinger all filed for bankruptcy yet went on to later success.

(3) Organize your financial data. Chances are, you keep lousy records. Nevertheless, the new law requires detailed financial information from the previous six months.

(4) See a bankruptcy attorney. There are at least a dozen in the area, and most offer free consultations with no obligation.

(5) Consider credit counseling. The new law requires it, and you may be able to come up with a payment plan that avoids bankruptcy. A list of approved credit counselors can be found at www.usdoj.gov/ust/index.htm.

(6) Pro se or not pro se? Anyone who serves as their own attorney has a fool for a client. However, if you’re single and have no major assets, it may be worth the effort to file yourself. If you can’t afford an attorney, consider a good paralegal.

(7) Make no major purchases. Buying a $3,000 stereo with your Visa right before you file bankruptcy has a name: credit card fraud.

(8) Be honest. Really.

(9) Relax. Once you’ve successfully filed, there’s nothing left to do but kick back and wait. Be thankful that, by law, your creditors can no longer pester you.

(10) Go plastic-free. Believe it or not, credit card companies will continue to solicit your business. Resist. Use your ATM card in place of a credit card. Your account will now actually have money in it.