Do This Once, Carefully

Bankruptcy is not a process to be entered into lightly or without careful attention to all the rules.  Once you’ve filed a bankruptcy petition, you are headed down a path that will remain on your credit report 10 years.  For most people this is a stressful and emotional ordeal.  However, here are some things to keep in mind:

1.  My job as your lawyer is to guide you through the legal steps that give you the best possible outcome for your particular circumstances.  I can’t help but have a great deal of empathy and personal concern for all my clients, but you will want to rely heavily upon friends, family, and any other support available to you.  You will be amazed at who steps up to help you in this time of need.

2.  The recent Great Recession has produced many casualties – lost jobs, lost asset values, lost access to credit, and more.  The rules changed pretty dramatically, and even those acting with great care and consistency in their personal financial lives got caught up in this.   You may be a person in that category.  A friend of mine from another city knows many real estate developers whose names adorn charitable facilities and public buildings, even streets, but who lost everything in the meltdown.  Their net worth calculations went from $100 Million to zero in the 2008-2009 period.  Having a net worth of $1,000 or $1 Million or $100 Million makes a lifestyle difference when that number is positive, but when that number goes negative everybody is on a level field. All need a fresh start.  However, many of these same people have maintained their attitudes and perspective and are using their innate intelligence and work ethic to restore their fortunes, even after bankruptcies.  You never lose to creditors what’s in your head and heart.

3.  Bankruptcy is neither an excuse game nor a blame game.  Your reason for being in the situation that brings you to me may be the economy, a marital problem, a costly illness, or any of a number of misfortunes that may or may not have been under your control.  There’s no use looking for excuses or trying to blame yourself or someone else or some other entity for where you are.  Like a golfer who hits one out of bounds, you just have to take your penalty, drop another ball, and keep playing the game.  Yes you may be at fault with bad behaviors that only you can change, but you have access to credit counseling resources that can help you with that.  Or you may have other personal problems that require professional intervention.  But, the point is that you should view bankruptcy as a way to get started on dealing with things that are in your personal control and will keep you from needing me in the future.

4.  A bankruptcy on your record is going to affect your credit score, but you may be surprised at how quickly you can rebuild that if you are able to produce reasonable income and are just diligent about paying everything on time.  If you demonstrate to lenders that you are a person of good character, you’ll be able to buy cars and houses and get decent credit card limits, maybe not right away but sooner than you think.  You may find yourself excluded from some job opportunities or certain licenses, especially in the financial industry, but many hiring decisions are still made by humans who can hear your story and make a personal judgment in your favor.   Over 1.1 Million individuals in the U.S. filed Chapter 7 bankruptcies last year, so you are certainly not alone.  And, hopefully the causes of your situation will have been resolved in a way that you can proceed with your life and livelihood.

So, as I say in my headline, let’s try to do this once very carefully.  Unlike most professionals, I’m not looking for repeat business!