How Many Former Clients Regret Filing Their Bankruptcy Case?
I have been practicing exclusively bankruptcy law in California for over 30 years.
Much of that practice has been filing bankruptcy cases for debtors in need of a fresh start.
And I was recently asked by a potential new client how many of my past clients regretted that they filed bankruptcy.
I thought for a while, and combed through my client reviews and other notes, and I could not find any.
Now, to be sure, I did not hear from every single client I represented over the years. So certainly some may have regretted their decision.
Nobody wants to file bankruptcy.
But based on the feedback I did receive, most felt great relief after they did and wish they had contacted me much, much sooner.
In fact, as I have written about before, delaying filing bankruptcy can reduce options available and cause other problems.
Bankruptcy Laws Exist For A Reason
People avail themselves of laws that protect them all the time.
Yet for some reason many treat bankruptcy as a last resort, when it really should not be.
The oft-cited reason for this is that there is a “social stigma” surrounding a bankruptcy filing.
To that, I cite again the first section above regarding how many regretted filing.
But bankruptcy laws are there to help you. And, as with most laws, it is designed to benefit society on the whole.
That is why debtor’s prisons were abolished long ago–because they helped exactly no one. They punished someone by putting them in jail until they are able to pay their debts. Do you know anyone who can earn enough money in prison to pay anything?
So the creditors did not get paid, and the debtors languished in a cell unable to contribute anything to society.
Yes, discharging debts in a bankruptcy case negatively affects the creditors whose debts were discharged.
Although for many, such as credit card debts, the companies are insured for such losses anyway.
But the discharge allows the person filing for bankruptcy the all important fresh start, which frees them up to be more productive and able to buy goods and services which helps everyone.
Bankruptcy laws exist for a reason. Because when it is necessary to file, society as a whole benefits.
And, at least equally as important, the person filing bankruptcy benefits.
What Can Bankruptcy Accomplish?
Depending on your situation and which bankruptcy chapter is filed, bankruptcy can do many things:
- Eliminate most unsecured debts, including certain taxes. See more on which debts can be discharged in bankruptcy.
- Stop collection actions, including wage garnishment and foreclosures on real estate
- Allow leases and contracts to be broken without further obligation to pay
- Allow time to catch up on past due mortgage payments on real estate
- Remove liens against property
- And for those who have higher income and/or assets with more value than can be protected (exempted) in bankruptcy, Chapter 13 allows repayment plans which can pay anywhere from 0% to 100% of outstanding debts with zero percent interest.
- And much more.
Learn Your Bankruptcy Options
It is always a good idea to learn about your bankruptcy options from an experienced bankruptcy attorney sooner rather than later.
Learning what relief for which you are eligible and available options does not obligate you to file bankruptcy.
But waiting to learn them often has consequences, including possible loss of the ability to get bankruptcy relief when things get “really bad”.
Image courtesy of “no regrets” by Sean MacEntee is licensed under creative commons license