Tough Love for the Financially Challenged

Let me just start by saying that I love my job. I love my clients. I love helping my clients in a time of need.  I love that the end of a case means a new beginning. 

What I don’t like?

I don’t like the stereotypes about bankruptcy and I really don’t like judgment. And when I say judgment I mean the negative opinions about this area of the law that cause people to make truly damaging decisions before seeking the advice that they need.

1.      Trying hard to avoid personal bankruptcy by spending their hard-earned retirement savings – I have met many people over the years that had unfortunately gone through entire retirement accounts in an attempt to stay current on monthly creditor payments and still ended up in bankruptcy. In most cases, these retirement accounts are exempt from creditors and would therefore have been retained/saved in bankruptcy. 

My most fervent hope is that anyone who may even think that bankruptcy could be a possibility in the future seeks competent legal advice about the available future options.  As a bankruptcy attorney, it is always disheartening to discover this situation that could have been avoided.

2.     Ignoring your health and well-being to try to stay current on monthly payments – During a discussion with a potential client recently, I asked the age-old bankruptcy lawyer questions about income and expenses. I was horrified to learn that this older gentleman had not been taking his prescribed medications because he had no money left at the end of the month to pay for the medications after paying his creditors. 

This is the very moment when I step up to my soapbox, take a bow and begin my speech.  The Bankruptcy Code was created by our government for a reason!  If it is a choice between putting groceries on the table (or in this case necessary medications) or paying that Wells Fargo credit card, the code is telling you to take care of yourself. Wells Fargo is going to get along just fine without you.

3.      Self-Loathing – I have been filing bankruptcy cases since 2005 and I have never encountered a potential client that was excited to discuss a potential personal bankruptcy filing.  There are statistics out there that show the “reasons” that most bankruptcies are filed but I will not be boring you with those today. 

I don’t need those numbers to tell me that bad things happen to good people.  Bankruptcies can be caused by so many factors including catastrophic health issues, divorce, job loss, partial loss of income, death in the family, and disability.  More people than you can imagine are one catastrophe away from bankruptcy. 

Are some personal bankruptcies filed because bad decisions were made?  Of course!  Bad decisions are not a life sentence for financial misery.

Sometimes it is just time to admit a mistake, fix the problem, and vow to never make the same mistakes again.

4.       Waiting until your creditors are seeking a judgment before seeking competent legal advice – Often I receive calls from frantic defendants who just learned that their next paycheck is going to be garnished by 25%. For many, this means the difference between the rent being paid or not. 

Unfortunately, this also means that we don’t have the time that we likely need in order to have fees paid, documents gathered and a petition drafted. Only the actual filing of a bankruptcy will stop the garnishment and the delays mean that the creditor is collecting the 25% on each paycheck in the meantime.

The moral of the story is:  waiting to get the information you need is never the right decision. 

I understand the feelings that you have about seeking advice on your finances but taking that first step will prevent any number of horrific errors.