What kind of person files for bankruptcy protection?

Many of my clients start our initial meeting with, “I really don’t want to be here.” When I ask why, they usually express feelings of guilt and the reluctance to be “that kind of person.” Most people have an unrealistic view of the type of person that files bankruptcy.

It seems that the stereotypical bankruptcy filer is someone who irresponsibly ran up thousands of dollars of debt buying things they couldn’t afford. Trips to Europe, diamond watches, fur coats, and 50″ HDTV sets for all! According to the stereotype, once the creditors asked that the money be repaid, the debtor skipped merrily to my office and forced the creditors to take a huge loss.

I’m not sure where that view originated, but it certainly does not accurately portray my clients. The vast majority of my clients either incur huge medical bills and don’t have insurance (more on that some other time) or fit the following pattern:

1 – Something causes a decrease in income. Typical events: divorce, illness, injury, loss of a job, cut in pay or hours.

2 – The cost of living remains steady or even increases.

3 – People need to pay the rent/mortgage and need to eat. So they use credit cards for a few months, hoping that things will get better “next month.”

4 – For a few months, they make the minimum payments on the cards, just trying to stay afloat for a few more weeks.

5 – By the time things turn around, the client is in such a deep hole that there doesn’t seem to be any hope of ever paying off the debt.

I don’t see irresponsibility in that scenario. I see people doing whatever they can to put food on their tables and keep roofs over their heads. I have no doubt that the “stereotypical filer” I described earlier exists, but I haven’t seen that person in my office.

If you’re suffering financial hardship, you’re not alone. Don’t let guilt or shame keep you from talking to an attorney and learning about your options.

Be Sociable, Share!

2 Comments

  1. In 2005 After 11 years at my job. they closed and went to India. All my 6 credit cards where close to there limit. I continued to use them to pay my bills no luxury items but always payed the minimum every month, I had money from my 401k and savings. Four years later after using my last savings paid the minimum to all my cards. Still no job. I had 4 anxiety attacks and went to the hospital. My mother took me in helps me out. It has taken me almost three years to save for Bankruptcy. I also have 6 judgement against me. i have no assets. If i file For Bankruptcy could it be denied or be accuse of fraud

    • While a creditor could object to your discharge, it’s highly unlikely on the facts you presented. Bankruptcy fraud would be an issue if you incurred debt with no intent to repay it, and you haven’t written anything to indicate such an intent. Based solely on the information you’ve posted, I don’t believe a denial of discharge or fraud complaint would be likely if you filed for bankruptcy. For legal advice specific to your situation, you should contact a local bankruptcy attorney. NACBA is a good place to start.

Leave a Reply to carlos carrasco Cancel reply

Your email address will not be published. Required fields are marked *

*