In a statement released last week, the New York Mets (i.e. the city’s non-Yankees baseball team) announced that it was enlisting the help of a financial firm known as a “turnaround specialist and bankruptcy consultant,” as the New York Times puts it.
In 2010, the company helped oversee the bankruptcy filing of the Texas Rangers. But while the Mets are reportedly facing some pretty serious debt burdens (including $400 million owed to several banks and $25 million owed to Major League Baseball), the team has not given any other public or official indication that it is considering a bankruptcy filing. Still, the consultation with the bankruptcy-focused firm suggests that the team is certainly considering court protection.
So what can individuals learn from the Mets’ maneuvers? Primarily that the bankruptcy process should begin long before an individual actually files his or her bankruptcy petition with the court. For most individuals, the bankruptcy process really begins during the information-gathering period.
Talk with the Right People Before Choosing Bankruptcy
Like the Mets, those considering personal bankruptcy can and should consult with knowledgeable sources before deciding whether or not to file a petition with the bankruptcy court. Individuals have a few choices about whom to speak to:
- A credit counselor: Many credit counseling organizations provide free or low-cost financial evaluations for consumers in need of guidance about whether or not to file for bankruptcy. Credit counselors run by community groups often charge little or nothing for leading consumers through a non-bankruptcy debt elimination process. And if you do decide to seek bankruptcy protection, the court requires a pre-filing credit counseling session anyway.
- A bankruptcy lawyer: Most bankruptcy lawyers offer free initial consultations during which they can help clients determine whether filing for bankruptcy makes sense financially. After that consultation, the client can move forward with bankruptcy or a bankruptcy alternative confident that his or her decision will work in his or her own best interest.
- An accountant: Those who work with an accountant or tax preparer regularly may find consulting with this person useful as part of the bankruptcy-consideration process. Small business owners may be best served by an accountant’s opinion.
The Importance of A Well-Informed Bankruptcy Decision
Filing for bankruptcy is a major financial step in anyone’s life, and should not be undertaken lightly. Further, waiting until the last possible minute to file for bankruptcy can have detrimental effects on an individual’s or family’s finances.
By starting the bankruptcy process well ahead of actually filing a bankruptcy petition, individuals set themselves up for a less stressful (and potentially more successful) bankruptcy process. For many Americans struggling with debt burdens, consulting a financial or bankruptcy professional is the first step in making a decision about bankruptcy.