I have heard many different reasons for not filing bankruptcy, but most of them aren’t good reasons. Lack of information or bad information has created fear for many people about filing bankruptcy. In this article I attempt to dispel some of those fears.
- Filing bankruptcy makes me a bad person. Most people that file bankruptcy are good people dealing with a difficult situation. Sometimes they get sick, divorced, or a spouse passes away, and they are unable to pay their debt. I would bet that 90% of Americans would find themselves in severe financial difficulty if they got sick and couldn’t work for six months. We wouldn’t think they are bad people if they couldn’t afford to pay their medical bills. The same logic should apply to someone who lost their job and couldn’t find work for a year. They aren’t bad people but rather the victims of bad luck. Should they suffer with debt for the rest of their lives? Bankruptcy is federal law created to provide debtors a fresh start. Filing bankruptcy doesn’t make these people bad. It simply gives them a second chance.
- I have to be insolvent before filing bankruptcy. Debtors do not need to be insolvent before they file bankruptcy. Please do not cash out your retirement accounts to pay off your credit card debt. Don’t pay off unsecured creditors with a home equity loan. There is no requirement that you spend all your money on your debt before filing bankruptcy. In fact the law specifically protects some types of assets from seizure by creditors, including your home and your retirement accounts.
- I don’t want to hire a bankruptcy lawyer because they will look down on me. Actually, the opposite is true. I treat my clients with the respect they deserve. Customer service is a top priority at our law firm. We will not talk down to you or judge you. We simply want to help you with your financial difficulties.