If you run your life with the intention to file bankruptcy, then you are an idiot. It may happen, but after talking to a whole lot of people about bankruptcy over the years, it is a rare occurrence. It is sort of like trying to get into an auto accident so that you can sue for your injuries. The overwhelming mass of people who file bankruptcy do it because there is no other way for them to get crazy amounts of debt off their back.
Almost all of us plan our lives to get ahead, pay the bills, and get by happily. Then something upsets your apple cart. I have no idea what an apple cart might be but stay with me on this. Many times there is an unexpected medical debt. Sometimes your hours are cut at work or the job terminates for some reason. Sometimes for many reasons the credit card debt builds up. Again, if someone is TRYING to run up credit card debt, then they too are an idiot. I have seen that almost never. What people do is try this and try that, make a purchase that they should maybe not have made, and often get hit in the back of their head with a life event that they were not expecting. Hindsight is perfect, but most of us do not have a crystal ball to figure out stuff before it happens.
So all of a sudden there are few options. Bankruptcy might be one of those options. But, life is too short to put anyone in a bankruptcy unless it is the life option that makes the most sense.
For instance, If you are a senior on social security who has no assets and no other income then many times I do not see the point in you spending the money for a bankruptcy. Having said that, if even one call from a creditor keeps you from sleeping at night and you cannot for the life of you hang up on these sometimes nasty people, then maybe we can help you with an option or two. It might be bankruptcy or it might be someone for you to send them to or something else. No matter what, you do NOT have to put up with being awakened by creditors in the morning and put to bed at night by their phone calls.
For instance, if you are about to lose your home in foreclosure and the promises of modification have not resulted in your home being taken off the foreclosure list, maybe being in a bankruptcy until the modification goes through makes sense but maybe staying in it after the modification or an adjustment in payments or a conversion from a Chapter 13 to a 7 makes sense.
For instance, you may have no car, no house, no money in the bank, and no other assets and no job. You may be what is called “judgment proof”. Remember the phrase “you can’t squeeze blood out of a turnip”? By that I mean that your creditors have little they can do to you. Yes they can sue you and after that there are things that they can do that you need to be careful about. (For instance watch out for “creditor’s interrogatories”, which are questions that the Court may require you to answer.) But there may be no hurry to file bankruptcy. You may want to start the process of getting your credit back or have other reasons for bankruptcy, but maybe bankruptcy is not right for you.
For instance, if your bills are just killing you but you have a very small amount of bills, or you are being garnished but all of your debts are about to be paid off, maybe bankruptcy is not the solution. There may be other options or maybe just grinding it out for a short period of time makes more sense.
For instance, you may have filed a bankruptcy in the last 8 years and think that you cannot file again until 8 years goes by. The truth is that there is almost always a bankruptcy option that will work (again, if it is right for your situation). It might be a Chapter 7 if the 8 years can be waited out. It might be a full Chapter 13 or a partial Chapter 13. And remember, no matter what the media has tried to convince us since the new 2005 law, Chapter 13 does NOT mean that you pay off all your debts. Yes, if you make 300K per year you will probably be paying a LOT of debt (unless it is mostly business debt and that is another story altogether), but in many, many Chapter 13’s no creditors are paid at all. What IS true is that you will be making a payment in a Chapter 13. It may be $70, $80, maybe $100 or more but instaed of being garnished for a 1/4 of your wages?
We do not suggest bankruptcy without laying out our options as we see them. There may or may not be other attorneys who will push for a bankruptcy but we want to sleep at night.
We are not perfect and after 30 plus years of practice, we like you have run into life and the surprises that it presents. But we are honest. And we will use what we have learned to try to help you. -Tony Cross