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.