Often, the first thing a prospective client says in a client meeting is that “I don’t want to be here and filing for bankruptcy relief is the last thing I ever wanted to do.” I’m sympathetic always. My response is usually words to the effect : “Yet, here you are so let’s analyze the problem.”
Depite the fact that a client may have little or no equity in his home (if he owns one), and despite the fact that the client does not have any assets that can be marshalled by a trustee in bankruptcy, the client still has a negative opinion about the word “bankruptcy.”
What I usually say is that bankruptcy makes more sense than decimating retirement accounts and depleting other assets otherwise protected under the bankruptcy laws. The federal bankruptcy laws enacted by Congress are uniform throughout the United States. Consequently, wherever you exercise your rights under the laws, the same statute applies subject to certain state law exemptions.
Unfortunately, when people are in real trouble, they often wait too long to get the relief they need. Bankruptcy is designed to afford folks with a fresh start when no other reasonable alternative exists.
Discharging debts and moving on with your life is often the smartest move a burdened consumer can choose. To those who qualify, Chapter 7 relief discharges most debts. A Chapter 7 discharge generally discharges credit card debts, medical bills, personal loans, and other unsecured debts.
For those who need to stop a foreclosure proceeding or sheriff’s sale, Chapter 13 enables the consumer to pay some or all of his debts through a payment plan but still being afforded protection under the automatic stay provisions of the Code.
Some prospective clients say they need to avoid bankruptcy because they think they have perfect credit. These folks, respectfully, are usually fooling themselves. When one has overwhelming debt, one’s credit isn’t perfect at all. In fact, one may be making timely minimum monthly payments on credit card and other debts, but I explain, if one now applies to a lender for additional loans, one’s application will be rejected based upon the amount of the prospective borrower’s existing debt compared to his income.
The first step to moving towards a debt free future is meeting with an experienced bankruptcy attorney. Our offices provide free, confidential consultations.
