In this wonderful but cold economy of ours, it is basically sink-or-swim. Once one cannot swim (pay his or her debts as they come due), one tends to sink faster and faster. Many consider bankruptcy briefly but dismiss it as too severe a remedy.
In order to make deals with creditors to resolve debts, one needs a means by which to pay the creditors. Moreover, the creditors will usually demand large lump sums if there is to be any discount given.
And, they do not just go away. The associated negative entries will remain on credit reports usually for 7 years. Collections on any given debt will vary from nasty daily calls to apparent silent indifference, as the debt gets sold from collection agency to collection agency, moving from desk to desk. But eventually a creditor will bring a lawsuit.
Unless one mounts a successful defense to the suit, a judgment will be ordered, at which time the creditor can garnish wages and bank accounts until his debt - and the high costs of each garnishment - are collected. And, the judgment can be valid for up to 20 years.
Debts Don't Just Go Away
Some people believe you can avoid being sued by "disappearing." This is based on the myth perpetrated by movies where a party will avoid being sued by avoiding service from a process server. In real life, if a person cannot be found, a court will usually allow that person to be served by mail...typically at an address that is no longer valid nor forwards to a valid address. In such cases, judgments end up being entered without knowledge of the person being sued. Usually, one finds out when he or she suffers a garnishment or credit is denied because of the judgment.
Simply put, there is little between being able to pay your bills as they come due...and bankruptcy. Bankruptcy has the power to instantly stop all collection actions on all debts except for domestic support obligations. Generally, all debts will be discharged except for some tax debts, domestic support obligations, student loans, court fines, and criminal restitution. Although the bankruptcy will take at least 3 months to complete, relief is accorded upon filing of the bankruptcy. Garnishments are abruptly stopped, and collection letters and phone calls will cease promptly.
Reconsidering the "Honorable Thing to Do"
Many of my clients had attempted to avoid bankruptcy as a matter of honor. Although deciding to file bankruptcy is certainly a very personal decision, many have pointed out that much of what they owe is actually comprised of exorbitant interest rates, late fees, and the like. While I am not seeking to villainize creditors, one should consider that paying debts is not a simple issue of right and wrong. Indeed, the whole reason bankruptcy exists is to allow persons a second chance. Capitalism depends upon its citizens taking some risks – yet being able to “live another day” if those risks do not ultimately pan out. Who would start a business if its failing would relegate the entrepreneur to decades of poverty?
Being Realistic About One's Credit Rating
Finally, many of my clients fear the hit that their credit ratings will take because of the bankruptcy filing. To be sure, filing bankruptcy is a major event for credit rating purposes. But, one has to be realistic about where he/she would be if he/she did NOT file bankruptcy. If one cannot realistically see climbing out of a credit abyss without help, one's credit rating may already be or soon will be very bad.
The fair comparison, then, is not of a person with great credit deciding whether or not to file bankruptcy. The fair comparison is of a person who either already has bad credit or soon will have bad credit because he cannot sustain minimum payments on debts – deciding whether or not to file bankruptcy. In that light, the bankruptcy can be seen as it should be seen: Not a mechanism that ruins credit but rather a possible way out.
Consider that there are many post-bankruptcy credit-rebuilding success stories. I will argue that bankruptcy is very often actually the very significant and responsible first step for those trying to rebuild their credit and restore financial soundness. Many former clients rebuild their credit scores to very good levels within 2-3 years after filing bankruptcy.
Why use a Bankruptcy Attorney?
Bankruptcy is often cited as a legal process that a person can navigate on his own without the guidance of an attorney. Nothing could be further from the truth. There are many pitfalls that could easily derail a case. The possible negative consequences include: a) denial of discharge of debts (meaning none of the debts would go away); b) forfeiture of property; and c) even criminal charges.
...But I Hired a Paralegal
Paralegals are NOT attorneys. Not only are paralegals horribly underqualified to advise and represent parties through bankruptcy, it is illegal for them to do so.
Of all of the attributes that a bankruptcy attorney can offer you, issue spotting is the most important. Even if a bankruptcy attorney does not know how to handle a problem, he can mitigate the situation as long as he can spot it. This sense is honed by years of "battling in the trenches," which is something that paralegals simply don't have.
Moreover, if something goes wrong, you will not be able to hold the paralegal responsible. In a sense, you are getting a guarantee from your attorney that he will do a competent job in representing you. You get no such guaranties from a paralegal - remember it is actually illegal for him to advise you in the first place!
Peace of Mind
It's like do it yourself plumbing: you may save a little money up front, but you will, at a minimum, be denied the peace of mind of knowing that the job was done competently (assuming you are not a plumber). Very possibly, you will end up spending much more money later having to hire an attorney to undo and redo your plumbing job. And, quite possibly you will suffer harm that cannot be undone in the process.
Why Use THIS law firm?
The biggest complaint clients have of their attorneys is their attorney's failure to communicate promptly and reliably. The Law Offices of Lance L. Lee is a ONE ATTORNEY office. Staff is used sparingly and only for purely administrative tasks. All communications regarding your case will be directly with the attorney. All meetings will be with the attorney. All documents will be prepared by the attorney. All hearings will be attended by your attorney, in almost all cases.
Practice Devoted to Bankruptcy
You would be hiring a true bankruptcy lawyer. Since 2000, this firm has only handled bankruptcy and bankruptcy-related matters. It is hard to stay on top of any one area of the law – don’t settle for a lawyer who “also practices” bankruptcy law.
Low Flat Rates
I do not strive to be the least expensive attorney, but I offer very competitive flat rates. Beware the level of service and expertise that is offered by bargain-basement bankruptcy lawyers.
Furthermore, discounts are typically offered to those with very limited income.
Call or email me for a free initial evaluation of your case. In most cases, I can give you a very good idea as to whether bankruptcy would work for you right over the phone or email.
Free Initial Consultation
Then, I offer a free, one-hour initial consultation at my office. There is no cost or obligation for the appointment: You only need to be seriously considering hiring me to represent you through the bankruptcy process.
You deserve to be treated like an individual, not a case!