Bankruptcy is not a Bad Word

You’ll hear a lot of people impulsively say: “bankruptcy is bad.”

That is because they have not given much thought to it and their response is based on F.E.A.R. – False Evidence Appearing Real.

No two bankruptcy cases are alike and consumers are forced into bankruptcy for a whole host of different reasons, most of which are beyond their control. Unforeseen life events such as a job-loss, drop-in income, medical emergency, or an act of God, such as a tornado or global pandemic can break even the soundest budget.

In these cases, bankruptcy can provide tremendous relief and an opportunity to start over. It’s easy for someone who hasn’t experienced hardship to say that bankruptcy is bad, but talk is cheap and people have families to take care of.

Why the bad reputation?

Many good people sometimes make poor financial decisions and feel embarrassed. There are those lacking empathy for people in financial trouble and seem to be of the opinion these people “dug their own hole and now they should lay in it”. This has created a stigma against bankruptcy that needs to be dispelled.

The Long Term Benefits of Bankruptcy Outweigh the Consequences

Bankruptcy is not inherently bad or good, but it is an important protection for honest consumers who find themselves in big trouble with debt. Honest people who have suffered through tough times and finally turned to bankruptcy because they can’t see a way out. Even Scripture calls for debt forgiveness once every 7 years. The Bible, in Deuteronomy 15, provides for a release of debts at the end of every seven years Prior to 2005, it was the law in the United States that an honest debtor could receive a chapter 7 discharge once every 7 years. The time period for chapter 7 bankruptcy is now eight years but other bankruptcy options may be available in the interim.

In return for a moderately lower credit score and not receiving the “best” interest rate on future credit; car loans, mortgage, credit cards, and such, you may experience the immediate cessation of all creditor harassment, future collection efforts, liens, judgments, lawsuits, wage garnishments and many other protections included in the automatic stay. Once completed you are discharged of most debt included in your chapter 7. And if chapter 7 is not a viable option, a chapter 13 repayment plan (sometimes for pennies on the amount owed) may provide the relief you need. Once discharged you are left free from most debt and ready to start your financial life over.

Don’t Let F.E.A.R. Stand In Your Way

If you find yourself in a tough financial position and can’t see a way out, use the form on this page to request an absolutely free initial consultation with one of our experienced bankruptcy attorneys.