Reply To: Advising Client to File Bankruptcy

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Shawn Wright

I have handled over 2,000 bankruptcy cases, and I routinely see clients re-establish their finances quickly after bankruptcy. Most of my clients have extremely poor credit, and I see their scores go from the low 500s to 600 within 3 or 4 months of filing. I tell all of my clients that their scores should be 720 or higher within 2 years. Many of them wind up buying homes with very competitive mortgage rates after 2 years from bankruptcy.
Moreover, a good bankruptcy attorney can size up the vast majority of prospective cases, and tell someone during the initial consultation if there might be an issue of not being able to protect all assets from the Bankruptcy Trustee.
As for discharging personal income taxes, bankruptcy is much more efficient than doing an OIC. The only advantage of an OIC is that you can get rid of taxes incurred within the 3 years prior to filing. Otherwise, bankruptcy is a very quick and efficient option for many taxpayers.