bankruptcy: top ten reasons not to feel guilty
TRANSCRIPT
Bankruptcy: Top Ten
Reasons Not to Feel GuiltyLaw Offices of Andrew D. Myers
attorney-myers.com
@attorneymyers
Reason 1:
Loss of Income
It often is the case that there is a
job loss, followed by an inability to
find work that pays nearly as well. If
you have worked in a high income
level and taken an hourly low
income position, or found nothing at
all because you are
"overqualified", your loss of income
is out of your control.
“We are not hiring” courtesy of billsphoto on Flickr
Reason 2:
Medical Expense
Medical expenses that are not
reimbursed by insurance or
government programs are a top
reason for bankruptcy. It is not your
fault and medical providers by
federal law may not deny you
treatment for the fact that you are
filing bankruptcy.
“SDC10680” courtesy of tahini on Flickr
Reason 3:
Divorce or Legal
SeparationDivorce often leaves one swimming
in debt. It may be that one was
trying to keep up or trying to
provide an acceptable standard of
living. Regardless, divorce often
leads to uncontrollable
circumstances. It is almost always
better to wait until the divorce is
over before filing bankruptcy to
make sure that the final court
orders allocate responsibility for
debt. It is "cleaner" this way. But,
there are circumstances in which
an earlier bankruptcy might be
desirable.
“99% Dissolved” courtesy of disneyite on Flickr
Reason 4:
Small Business
Failure
Often people launch small
businesses which for whatever
reason do not make it. Sole
proprietors do better in a chapter 7
or 13. However even if there is an
LLC or other entity, banks and other
lenders often require a personal
guarantee, and your personal
bankruptcy will discharge your
personal liability for the business
debt.
“Another sign of the times” courtesy of crobj on Flickr
Reason 5:
Consumer
Spending Drives
the USA
Economy
About two-thirds of the U.S.
economy is consumer spending.
We are all pressured to buy buy
buy. Just after 9/11 President
George W. Bush urged Americans
to spend more money as a way of
boosting the economy and not
letting the terrorists win. President
Obama has urged consumer
spending to remain high, as a way
of shoring up the economy.
American consumers follow this
advice with a vengeance.
“consumerism” courtesy of lissame on Flickr
Reason 6:
Consumers Give
in to PressureWhether it is the friend, neighbor or
other social contact that has the wide
screen TV, new computer, latest
cable/internet/high speed/recording
and other technology, car, interior
decorations or otherwise, often
consumers simply cannot avoid family,
social or other pressure to spend.
Credit card offers are relentless. On
college campuses, credit is offered to
teens with no income. There are
stores where you can't check out
without being pressured with the
enticement of a discount for opening a
new credit account. Some of these
stores charge 25% interest.
“Temptation” courtesy of hauntedplace on Flickr
Reason 7:
Bad Timing
Easy availability of credit allows
Americans to live well beyond their
income level. When unexpected
things go wrong, there are few
alternatives. Illness, job loss and
other factors force people against
the wall of impossible spiraling
credit payments.
“Time me” courtesy of mrlins on Flickr
Reason 8:
Bankruptcy Is In
The Bible
"At the end of every seven years
you shall grant a release. And this
is the manner of the release: every
creditor shall release what he has
lent to his neighbor. He shall not
exact it of his neighbor, his brother,
because the Lord's release has
been proclaimed." Deuteronomy
15, 1-2. This Old Testament
passage clearly embraces the
concept of bankruptcy.
“Bible” courtesy of manc72 on Flickr
Reason 9:
Bankruptcy Is a
Constitutional
RightBankruptcy is firmly embedded in the
U. S. Constitution. The same
Constitution which gives us
democracy and our freedoms of
speech and religion also directs
Congress to pass “uniform Laws on
the subject of Bankruptcies.” (Article
I, Section 8.) The U.S. Supreme
Court explained bankruptcy law this
way: „[I]t gives to the honest but
unfortunate debtor…a new
opportunity in life and a clear field for
future effort, unhampered by the
pressure and discouragement of
preexisting debt.” Local Loan Co. V.
Hunt.
Reason 10:
How Do You
Spell Relief?Potential bankruptcy filers often worry
about their credit rating. It is true that
under the 2005 revisions to the U.S.
Bankruptcy Code, the filing of a chapter 7
bankruptcy can stay on a credit report up
to 10 years. But, most people considering
bankruptcy already have relatively bad
credit. One could keep paying minimum
payments or more for years, and simply
"swim" in the interest and other charges,
never reducing the principal. The
bankruptcy will at least give the filer a
fresh start. Secured creditors will continue
giving loans, and unsecured creditors are
increasingly giving fresh credit based on
the fact that another chapter 7 cannot be
filed for a long time.
Law Offices of
Andrew D. MyersBankruptcy and Personal Injury Lawyer
Derry, NH and North Andover, MA
www.attorney-myers.com
800-206-3889