However, there may come a time when your parent will not be able to make his/her own decisions.. If you’re a child of an aging parent, you should speak with your parent about taking proactive steps before the need arises.

What is a Power of Attorney?

A power of attorney is a document that a person signs in order to give another person control of managing their financial, medical, legal or business affairs if there comes a time they are unable to.

A power of attorney can be temporary, such as handling the affairs of someone while they are out of the country or undergoing medical treatment, or it can be permanent.

Is a Power of Attorney Necessary?

While your parent may not need help managing his/her finances and health at the moment, a durable power of attorney provides your parent an opportunity to appoint someone to act and take care of matters should he/she become incapacitated.

Without a power of attorney (or other legally-binding arrangements), the court can take control and appoint someone to act on behalf of your parent. This can be a time consuming process and can be very costly as well. At the same time, your parent (or you) may not have any say as to who the court appoints.

This is why it’s essential to take proactive action and appoint durable power of attorney to someone you trust before the need arises and the court is forced to intervene. Your parent can choose to appoint the power of attorney to you, or to anyone else he/she wishes.

Have you taken any proactive steps to obtain a power of attorney for your parent? If not, you may want to consider it.

A power of attorney can be temporary, such as handling the affairs of someone while they are out of the country or undergoing medical treatment, or it can be permanent.

Businesses usually have a couple of choices when filing bankruptcy. Chapter 7 bankruptcy is reserved for those companies that are struggling so badly that they cannot remain in business. The business is usually liquidated, then all assets left over are distributed between shareholders and creditors.

On the other hand, a Chapter 11 bankruptcy is filed when the business owners want to continue doing business. This is typically referred to as reorganization bankruptcy, and the business owner is allowed to remain in business while in the bankruptcy process

What are the benefits of declaring bankruptcy for my business?

One of the most beneficial aspects of business bankruptcy is the fact that the assets of the company cannot be seized once your business enters the process. This is why this option is appealing to small and large businesses in serious financial trouble. Once the bankruptcy petition is filed, your business is under the protection offered by the US Bankruptcy Court.

What is a “discharge” in bankruptcy?

A “discharge” is a term used during the bankruptcy process that means a debt does not have to be repaid. When a debt is “discharged” not only does it not have to be repaid, the creditor cannot attempt to collect future payments from you. Not all debts are dischargeable. There are specific qualifications that must be met in order for certain debts to be discharged. You should consult a bankruptcy lawyer directly to determine if your debts are dischargeable.

What can be eligible for discharge under a Chapter 11?

Some dischargeable debts include: business loans, back rent, business-related credit card expenses, as well as other similar debts. Some debts that cannot be discharged include: taxes, penalties or fines that have been imposed on the company by the government, and salaries owed to employees.

Under a business bankruptcy, it’s important to note that personal expenses and debts may not be dischargeable – only expenses related to the actual business.

How difficult is it to file business bankruptcy?

Business bankruptcy can be difficult and complex. If you fail to disclose information or disregard an essential step, you can face serious charges and/or substantial loss. That’s why it is vital to hire an experienced bankruptcy lawyer to handle these types of cases.

Estate planning

Many people work hard throughout their lives to provide for their families and build their estates, only to have the very things they’ve worked for and people to protect in disarray because they didn’t invest time in a comprehensive estate plan.

Statistics show that more than 50% of adults in American do not have an estate plan in place at the time of their death.

This is likely due to the average person’s unfamiliarity with the estate planning process itself. Because they do not understand its importance and how it works, many Americans forego having a written plan for their estate.

Without an estate plan in place at the time of your death or incapacity, you are leaving it up to a judge you don’t know to decide how to distribute your assets throughout your family, who will care for your minor children, and who will care for you if you’re ever unable to care for yourself.

Do you have an estate plan in place to protect your family? If so, please share them in the comments section below.

If you are experiencing more than one of these warning signs and have accumulated debt you cannot afford to repay, you may be on the verge of bankruptcy. You should seek the advice of an experienced bankruptcy attorney immediately.

Here are 5 warning signs you may be on the verge of bankruptcy:

1. You are living paycheck to paycheck and you have no savings.

If you are living from paycheck to paycheck, you are spending your money as quickly as you receive it, and you do not have any set aside for a “rainy day.” That means any unexpected event (i.e. vehicle repairs) can easily cause you to fall behind on your credit cards and other accounts.

2. Your debt-to-income ratio is high.

Your debt-to-income ratio is the percentage of your monthly income that goes towards paying your debts. For example, if your income is $2000 and your debts are $1000 per month, your debt-to-income ratio is 50%.

Lenders use your debt-to-income ratio to determine if they will approve your loan application. Generally, they do not want to see that you owe more than 40% of your monthly income to your debts. So, a debt-to-income ratio of 50% is significantly high.

3. You can barely make the minimum payments due on your credit cards.

When you pay only the minimum payments due on your credit cards, only a small portion, if any, is applied to the actual principal you owe, and the remaining balance likely incurs additional interest.

If you’ve been unable to pay more than the minimum payment on your credit cards or other accounts for an extended period of time, it’s likely you are nowhere near paying off the debt.

4. You owe substantial medical bills and expenses.

According to recent studies, nearly half of all bankruptcies nationwide can be attributed to substantial medical bills. If you have inadequate health insurance or none at all, you’re at risk of incurring substantial medical expenses due to unexpected injuries, illnesses or other medical conditions. A significant rise in medical costs can ruin your personal finances, and force you to file bankruptcy.

5. You are unable to make your monthly mortgage payments.

Many homeowners are having a difficult time making their monthly mortgage payments. And as a result, mortgage companies have seen a sharp rise in the number of loan defaults in recent years. If you’re struggling to make your mortgage payments and are threatening to lose your home to foreclosure, you should consult a bankruptcy attorney immediately. In many instances, chapter 13 bankruptcy can prevent you from losing your home to foreclosure.

If you have witnessed one or more of the warning signs listed above in your personal situation, it is time to evaluate your finances and see if you need the help of a bankruptcy attorney. Whatever you do, do not make your situation worse by delaying getting the help you need.

Have you dealt with any of the warning signs mentioned above?