Bankrupcy: Protect Yourself

As you may be well-aware, a new bankruptcy law is taking effect this
month. Now it will be far more difficult for consumers to walk away from
debt. You may think you'll never file for bankrupcy, but 90% of filings are
due to simple misfortune like divorce or health problems. So, it's better to
be prepared for such outcome, even if it seems to be remote.

Here are some tips for what you can do to protect yourself:

Contribute the maximum to your 401 (k) and IRA. Under the new law,
retirement accounts up to $1 million are out of creditors' reach.

Consider an umbrella insurance policy. It's a lifesaver if an accident
maxes out your auto or homeowner's insurence. A couple of hundred
dollars a year buys $1 million in coverage.

Be more careful about protecting your assets; under the new law creditors
are more likely to go after all your disposable income. Transfer assets to a
trust, and name your children as beneficiaries. If you declare bankrupcy
more than four years later, those assets will probably remain safe.