You will often hear that “bankruptcy is bad”, or that “bankruptcy is a forever mistake”. It is likely that the people who say bankruptcy is bad don’t understand the process. Each bankruptcy case is a little different, and people chose bankruptcy for many different reasons, most of which are beyond their control.
Certainly, filing bankruptcy is not something to take lightly, but Congress created the bankruptcy law to help people get a fresh start on their finances.
Medical bills are often cited as causing a large percentage of bankruptcies. For many people, unexpectedly losing a job puts them into a financial tailspin. And in the current farming environment, with such low commodity prices, farmers are being pushed into bankruptcy by their lenders. And, unfortunately, marriages end in divorce, and the couple – who now have two apartments or houses on which to pay, with two utility bills, two of everything else, plus driving back and forth for visitation – cannot afford to pay their bills.
It is true that bankruptcy will be on your credit record for up to ten years. However, I routinely see people who filed bankruptcy four years ago getting perfectly normal home loans to buy a house because they have been able to rebuild their credit.
And, oddly enough, some creditors will offer you credit when you are just out of bankruptcy. They figure that since will you not be able to file bankruptcy again (there is an eight-year period between filing Chapter 7 cases, less for Chapter 13) that it is reasonable to take a chance on you.
None of this means you should not pay your bills, if you are able to do so. But if you cannot pay, the law gives you a way to deal with overwhelming debt.
Each person’s situation is different, which is why we sit down with you in person to discuss your options. We do not charge for a short initial visit. If you are in financial hot water, feel free to call for an appointment.