Often conscientious people delay getting the help they need, not so much out of pride as out of shame at having to ask for help. But bankruptcy exists for a reason. For every person who abuses the process, there are many who simply need the financial relief that bankruptcy provides. As with depression, or anxiety, or bereavement, there is no shame in seeking the help you need.
It’s not unusual for a bankruptcy attorney to see a client who comes to the office with a big box or bag full of unopened bills, because things have gotten so out of hand they have simply shunted it all aside in order to get on as best they can with getting through each day. It is often a positive feedback loop of avoidance leading to more debt, leading to more avoidance and more debt.
On the other hand, people may just be too optimistic about their financial outlook, thinking that they are going to get a grip on their debt when they get a new job, or when their partner gets a raise, or when their business takes off. Sometimes, avoiding dealing with debt may entail a combination, as strange as it may sound, of shame, guilt, mental paralysis, and unwarranted optimism. Whatever the reasons may be, and however it is experienced, it can be crippling, both emotionally and financially.
Have a Bit of Self-Compassion
In some cases, it may be possible to dig out of debt through a combination of debt forgiveness and structured payments, and by reducing expenditures, and through other measures, but when financial counsellors see people trying to dig out by doing things that are injurious to their long-term financial health–with potential impacts on their emotional and physical well being–they are quick to counsel clients to look at bankruptcy. For example clients may begin to liquidate retirement funds that normally would be protected in bankruptcy in order to meet their debt obligations. A stroke of fortune may make someone rich. A stroke of misfortune may likewise put someone in financial straits. Who knows what people are dealing with? Divorce, bereavement, medical bills, a spell of unemployment, a bad investment . . . lots of things might knock someone off their stride.
If you have been making yourself, and perhaps those around you, miserable because of debt, the time to seek counselling is now. There is no stigma, except what you lay on yourself, in seeking bankruptcy if that is what you need to do. And the settlement may not be as harsh as you think. Most people who file for the most common form of bankruptcy, Chapter 7, are able to keep their personal possessions, some of the equity and their homes, and often several thousand dollars in equity for a vehicle. What is covered varies state to state. If there are other assets that might not be protected under Chapter 7, Chapter 13 might be an option.
It’s possible in short order to get secured lines of credit that will help you begin to re-establish your ratings, though a bankruptcy will stay in your credit reports for up to 10 years. With positive steps, though, improvement can be rapid. Credit-building loans are often available from banks and Credit Unions to help get folks back on their feet. Some people who discharge their debt through bankruptcy are eligible for FHA or VA home loans in as little as 2 years. Need a new vehicle? You will probably pay higher interest, but consider how the interest is compounding on your credit card debt!
In short, there is no reason to remain under this cloud.
The Time Is Now
If not to seek bankruptcy, at least to get advice. Why? It’s more urgent than ever due to current events. Lots of folks have lost their businesses and livelihoods during the pandemic. To this point, foreclosures and other kinds of debt resolution have been held off by debt moratorium legislation, and some people have gotten by on those $600 federal payments. But when those protections and those payments end, credit counsellors, lawyers, and courts are going to be flooded with cases that require resolution. It’s best to get the advice you need, and to file if you should, as soon as possible.
Experience has shown that those who file earlier than later end up with better long-term results, but even if you’ve put off dealing with a financial hole that you just can’t seem to dig out of for a long time, it’s best to bite the bullet. Many people have been down this road before you. The vast majority have gone on to have happy lives and watch that road-bump grow smaller and smaller in the rear-view mirror. They have felt the great relief that getting that burden off their shoulders brings.
The bankruptcy experts at Burr Law stand ready to help you get into the clear as quickly and painlessly as possible. They want to help you put this chapter behind you, and get on with your life. The life you deserve.
Bankruptcy exists for a reason! It exists to help people like you.