Law
Offices of
Scott
Alan Weible, P.L.L.C.
(866) 378-2350
The answer to this question is many times easier than one would expect.
But, you may have trouble accepting your own answer. Why? Because of a misplaced social stigma some people associated with bankruptcy.
Generally, when I meet people for bankruptcy consultations, I always start with the general question of “Do you think you can realistically pay off all your debts within the next two to three years?” If they give me an unqualified “Yes” (and I bring up the fact that they can’t cheat and eat Top Ramen for the next 3 years), then I advise them to pay their debts and wish them well. If they answer “No” then I almost always recommend filing for bankruptcy relief.
It is at this point that the emotional roller coaster starts. On the one hand, the client is overjoyed with the good news … that they will be debt free. They are immediately filled with happiness, and elated with the wonderful news of eliminating the 800 pound gorilla. It’s almost like winning the Lottery! The Kleenex come out of my drawer!
But then I see my clients sink into a personal turmoil filled with blame, shame and regret. They are saddened and feel like their efforts never achieve success. They think of themselves as having “failed”. Despite all their hard work, they were not able to keep their word on their financial responsibilities. Their friends, family, and co-workers all seem to make ends meet, but for some reason they cannot. What would their parents or grandparents think? No one ever filed for bankruptcy in their generations!
And so the battle begins. Pride versus happiness versus common sense. The “Debt Free Dream” is in whispering into your left ear; and the “Pay Your Debts Shrew” is pleading fervently in your right ear. A war has begun. Its almost like watching a political debate. But this is real and has much more direct consequences than a couple of politicians. Sometimes the battle is quick, lasting only minutes. Other times, the individual will struggle and vacillate for hours, days, weeks EVEN months. It is this internal debate that is usually the biggest hurdle to making a rational, reasoned, correct decision to file for bankruptcy relief.
Inevitably, most people that need to file end up filing. And unfortunately, those few who will not voluntarily file after I recommend it, are eventually forced to file after a wage garnishment or bank levy. And, by that time, their finances are in even worse shape than when they first came to see me. And so the client who comes to see me usually does file for bankruptcy relief … and the only question is whether they resolve the internal debate immediately and take my advice right away, or wait until their creditors are making their life even more miserable and then ask me to make an emergency filing.
So to put some order, and some sense, into the debate between the a responsible choice to seek bankruptcy relief and the self-abuse people sometimes impose on themselves just to avoid the ‘embarrassment’ of having filed bankruptcy, here are the “Top Five” Reasons to File Bankruptcy. Certainly there are many other valid reasons, but these five are at the top of my list.
1.) You and your family are priority number One! If you can not realistically take care of yourself and your family, then the same rationale applies to your creditors. Eventually, you will not be able to take care of them. Of great importance, is the fact that in this country there is no involuntary servitude … slavery (whether racial or financial) is prohibited by our Constitution. Our Constitution emphasizes our natural and inalienable rights to life, liberty and the pursuit of happiness. We cannot pursue happiness, much less be possessed of liberty or really be said to be participating in anything resembling a “life”, when our blood, sweat, tears and toil accomplish nothing but paying the late fees, penalties and interest on debts which we undertook in good faith, but cannot now honestly pay.
2.) Your credit will be better! This is a tough pill to swallow. Yet, the reality is that when you eliminate your debt, you actual improve your credit score. Generally speaking, 1/3 of your credit score with all three bureaus is based upon the debt to credit ratio. Bad credit always improves with Bankruptcy. Only good credit drops, but usually not as much as you would think and only temporarily. Its not uncommon to be in the 600 to 700 credit range within 1 to 2 years, provided that, after your discharge, you get at least four main lines of credit and keep up your payments.
3.) Justice requires it! Bankruptcy actually has its roots in Biblical times. In the Old Testament, the “Book of Numbers” required a financial release every 7 years. For centuries, humankind has realized that the forgiveness of debts actually creates a productive society. Risk taking, entrepreneurship, capitalism, etc., are created with these “releases” and “fresh starts.” Our founding fathers found this so important that they actually set forth a “uniform set of bankruptcy laws” in our Constitution!
4.) There are no regrets! Of all the people I have known who have filed bankruptcy, I have never known ONE person who regretted it. There are, of course, costs to filing bankruptcy. But, I have heard time and time again that the decision to file bankruptcy was the best decision they had ever made. And, what is important to note is that you are always free to repay the debts discharged in your bankruptcy. If you come into money later, or simply change your mind, you can repay your former creditors (and with interest if you want)! The only difference is that you will control the repayment process and will not be hounded, harassed, have your wages garnished or your telephone rung off the hook.
5.) Garnishments, Liens, and Bank Levies will be avoided! I see this happen so many times. People think they can manage their debts, pay some, forget others, and just try to maintain. Then all of a sudden they go into work one day to find an earnings withholding order has been sent to their employer wherein 25% of their gross income will be taken at the next payday. Or they go to pay their rent and the money has been taken from their bank account. Bankruptcy provides the peace of mind that this will never happen!
While there are many other reasons to file bankruptcy, such as to save a house from foreclosure, save an automobile from repossession, protect a co-signor, structure a repayment plan with the IRS, remove a lien off one’s residence, etc., the fact of the matter is that there is always more good that arises from any bankruptcy than the bad you may have to suffer in the short term.
If you are considering filing for bankruptcy, and are in debt over your head, please take your most recent paystub and list of creditors to an experienced bankruptcy attorney. Ask for advice and be open minded. What you might hear at that consultation shouldn’t surprise you. While the decision to file is usually the toughest decision, once it is made, it is always the most gratifying decision you can make!
Here is a list of some things you should NOT do if you are considering bankruptcy. Of course, this is not an exclusive list – what you really need to do is to get specific advice tailored to your particular situationfrom a qualified attorney.
1. Don’t fail to tell your attorney about ALL of your bank, checking, savings, brokerage, and credit union accounts.2. Don’t file if your income is greater than your expenses.3. Don’t use your credit cards.4. Don’t take credit card cash advances.5. Don’t use convenience checks.6. Don’t do balance transfers.7. Don’t pay money to family.8. Don’t pay money to friends.9. Don’t tell a creditor that you intend to pay.10. Don’t leave assets off of your paperwork.11. Don’t file if you are about to receive a tax refund or inheritance. Discuss the timing with your attorney.12. Don’t fail to tell your attorney about your small business, sole proprietorship, partnership, LLC, LLP, LC, corporation, or hobby.13. Don’t purchase a home shortly before filing bankruptcy without consulting your attorney.14. Don’t give or gift property to anyone.15. Don’t pay more than $600 on any past due bill.16. Don’t transfer property to anyone.17. Don’t cash out retirement plans or 401k’s.18. Don’t take out a second mortgage.19. Don’t gamble.20. Don’t hide assets or debts.21. Don’t take out “payday loans”.22. Don’t put your money in your kids’ bank accounts.23. Don’t omit to tell your attorney about one particular credit card in order to “save” it for after your bankruptcy.24. Don’t fail to list debt to family or other “insiders.”25. Don’t write bad checks.26. Don’t borrow money.27. Don’t forget to tell your attorney about liens you may have on your home or unpaid judgments so they can be avoided.28. Don’t make major financial decisions without talking to your attorney.29. Don’t get married before filing if your spouse has a high income.30. Don’t misrepresent facts to your attorney.31. Don’t run up your credit cards, or other credit, in advance of filing bankruptcy.32. Don’t fail to appear at state court hearings, trial or proceedings.33. Don’t hide from your attorney. Keep her up-to date with your address, phone number and email address. Stayin communication with, and coordinate with, your attorney.
There are many other do’s and don’ts when you are thinking about whether to file a consumer bankruptcy case. So,take what information you have gotten from the internet and make an appointment to meet with a qualified attorney, face-to-face.
There is no substitute for personal, and personalized, advice from your own attorney. I am happy to analyze your situation and prepare a game plan that works for you. So, feel free to phone my office at anytime (866-378-2350) or send an email.
"""""""""""""""" Scott Alan Weible, Esq. is admitted to practice law and active in Virginia, District of Columbia and California, and represents