Ashamed to file bankruptcy? Afraid of doing something wrong or worse, stealing? Forget that, get your fresh start!
December 7, 2012 Leave a comment
I have had many clients who are ashamed to even talk about the possibility of being bankrupt and are therefore extremely reluctant to file for bankruptcy even if they desperately need to. These clients may have a huge debt load that they cannot pay where they are having trouble even paying the interest on the debt. They may have had credit cards they charged up and maxed out, or automobiles that were repossessed with huge deficiency balances owing, or they may have medical debts that are high.
In addition these debts may have been sold to collection agencies. This means that the collection “experts” have purchased these debts and they are now motivated to collect them. The collection agents are experts because they are mean and angry and demanding and even threatening. Like the terminator machine in the movies they have one goal in life. This is to get as much money out of you as quickly as they can.
The collection agents believe nothing you say because they assume you are lying and even if they did believe you they do not care about anything you say. They want your money now and they will pull out all the stops to get it. The only way to stop them is to pay them or through filing a bankruptcy.
Many of my clients are unemployed because they were laid of or they may be underemployed because they are now working part-time. These people may have a job currently that pays far less than the one that they had when they incurred the debt in the first place. In addition they may have had medical procedures that they had no insurance for at the time that is costing them far more than they can possibly afford.
All of this can be occurring in my clients’ lives yet some of them are still holding back on filing a bankruptcy. They still think that some miracle will occur that will help them pay and they do everything they can to resist a filing.
I believe people avoid bankruptcy because of the stigma that bankruptcy carries and has carried for some time. In the 1929 stock market crash people jumped out of windows to avoid what they believed to be the shame of bankruptcy. People still believe that bankruptcy carries shame and signifies failure of some kind and as Americans we hate failure and we wrongly believe that it is always bad.
But things have changed considerably. Bankruptcy is not bad as many think now or ever. Corporations file bankruptcy regularly and reorganize and then continue to function. Even towns and cities do this and they can continue to carry on. There is nothing dishonest or immoral about this whatsoever for them or for you.
You also can file bankruptcy, discharge your debts, and reorganize like a business or municipality. There is no shame and no disgrace to this. In fact it is usually the moral and legal and best thing to do when you cannot pay your debts. It frees you and the creditor from the charade that someday you will pay the debt. You can move on and the creditor can now write off the debt as uncollectable and take a deduction on his taxes.
In fact part of bankruptcy law is the concept of you the debtor getting a “fresh start”. Bankruptcy laws themselves that have been with us for hundreds of years contain the fresh start language. This is because bankruptcy was not created to cause humiliation or to put a sense of defeat into people. It was created to liberate people and businesses, and later municipalities from the crushing effect of debt which cannot be paid by anyone.
Once freed from the debt an individual or entity can utilize the fresh start by starting anew and carrying on without the previous debt burden. The psychological boost one can receive from a bankruptcy discharge is tremendous. I know because my clients regularly tell me so.
I am a San Diego bankruptcy attorney. For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com. Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!
For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at email@example.com.
Couple photo courtesy of Justin maier. Polar bear photo courtesy of thelearnr.