Bankruptcy
is not the end - it is a beginning!
You are
not alone in your financial distress!
Many of my
clients feel afraid or upset about filing a bankruptcy case. Please be
reassured that there is no reason to have negative feelings about filing or to
feel that it means you are a failure. Very likely you have friends, coworkers
and neighbors have filed and you just don't know about it. Also, many
famous individuals and big companies have gone bankrupt including:
•
President Abraham Lincoln
• Author
Mark Twain
•
Automobile Manufacturer Henry Ford
• Hall of
Fame quarterback Johnny Unitas
•
Hollywood director Francis Ford Coppola
•
Television personality Larry King
• Actor
Mickey Rooney
• Actor
Burt Reynolds
• Actress
Kim Basinger
•
Entertainer Jerry Lee Lewis
•
Entertainer Wayne Newton
•
Entertainer M.C. Hammer
•
Entertainer Toni Braxton
•
Continental Airlines
• United
Airlines
• US
Airways (twice)
• Donald
Trump through one or more of his corporations
Bankruptcy is
intended to provide you with a "fresh start" on your financial
life. There is absolutely no reason to feel guilty about filing
bankruptcy, especially if you use it as an opportunity to provide future
financial happiness and security for your family. All of these people went
bankrupt, yet all of them went on to achieve success in their fields. So remember that while your financial problems are serious,
they aren't the end of the world. Declaring bankruptcy is often the beginning
of your new world in financial freedom.
You
Don't Need To Be Broke To File For Bankruptcy
You can be
employed, have a bank account and own property as of the date your bankruptcy
case is filed. While there are some limitations on how much debt you can
have and still file under chapter 13, the other chapters have no
limitations. You only need to be in financial distress in order to
file. "Financial distress" can result from many things, such as
illness (physical or mental) or job loss - in other words, any thing that makes
it difficult or impossible to pay your bills. Many of my clients come to
me after they have been laid off from work and then gotten a new job but got
behind on the mortgage while unemployed. Very often the mortgagee won't
accept payments once you've gotten a couple of months behind, even if you can
now pay, so filing a chapter 13 case may be the only way to stop foreclosure -
simply because the lender won't cooperate!
There
Is No Minimum Amount Of Debt Required For Bankruptcy
Bankruptcy is
designed for people who are unable to repay their existing debts - it is not
designed for people who owe small amounts. There are many people who
file for bankruptcy owing very little money, and others who do not need to file
for bankruptcy in spite of the fact that they owe a large amount of
money. The decision to file a bankruptcy case should be based on your
ability to pay your debts, not how much those debts are.
There
Is Credit After Bankruptcy !
Many people
worry about being able to get credit after filing a bankruptcy case. The
first thing to remember is that it probably was "credit" that got you
into trouble in the first place. For that reason, it is a bad idea to
immediately start looking for credit again - learn to live with cash. For
many people, using credit is an excuse not to have a realistic budget and to
avoid thinking about how they use money. It is true, however, that the
negative impact of bankruptcy on credit is extremely exaggerated.
You will probably get offers for new credit cards fairly soon after your
bankruptcy case is over. The best thing to do, in my opinion, is to
refuse all offers of credit cards until you've put together a realistic budget
and savings plan. Once you've put a savings plan into place and start to build
up your "cash cushion", you will be able to start thinking about new
credit and may even find out that you don't need credit - that debit
card works just fine. If you want to buy a home or car after bankruptcy
you will probably be pleased to know that I have had many clients purchase a
home fairly soon after their case is over, but that only happens if they've
taken the steps necessary to establish their own financial
stability.
Your
Employer or Neighbors Probably Will Not Find Out About Your Bankruptcy
The Bankruptcy
Court does not get in touch with your employer when your case is filed, or tell
anyone else about your case, unless they are named in your bankruptcy
papers. Sometimes it is better to give notice of the case, since that
makes sure your debt is fully discharged, and it can help protect you from
potentially illegal collection efforts, so it is better to be cautious and give
notice. Keep in mind, however, that all of the papers I file in the
bankruptcy court are public records and anyone can go look at them.
Your
Spouse Does Not Have To File For Bankruptcy With You
Often a married
couple will file one petition together (called a "joint" petition),
but that is not required. The decision to file jointly or individually is
based on the nature of the debts at issue. This is particularly true in
Chapter 13 because the automatic stay protects co-signers on debts, too.
Note that "married" may be defined by federal law, not state law,
especially in Massachusetts since Massachusetts currently permits same-sex
couples to marry.
Your
Immigration Status Is Not Likely To Be Affected By Bankruptcy
While this
office is not expert in immigration law, we know of no reason why filing a
bankruptcy case would affect your immigration status so long as you are
completely honest.