Thursday, August 11, 2011

Should you hire a bankruptcy attorney?

Times are definitely tough in this economy, and I have several close friends who have been forced to consult with bankruptcy attorneys to get relief and a fresh start on things. There is such a stigma associated with this, that I think really needs to be evaluated. Filing for bankruptcy does not make someone a bad person, nor does it necessarily indicate they are irresponsible. Sometimes things just happen. I am going to give you a couple of examples of stories I have heard, some recent, some from my past as a bank loan officer, that I hope give you pause to rethink your personal feelings on the matter. I have seen this issue from all sides, so I think I have a good perspective on shedding some light. (*Note: Names and identifying details changed to protect the privacy of the individuals involved).

Story 1: This couple was very financially stable and strong. Combined, their salaries were well into the six figures. They owned a nice home, 2 average cars, and had a handful of credit cards that they paid off every month. They were responsible at saving, and had 4 months of income in liquid savings. Then, one of them lost their job. Immediately they went to "bare bones" spending while the spouse looked for a job. Then a child got very sick and had an extended hospital stay. They had a 20% copay bill for all expenses. The one spouse was getting interviews, and being told they were overqualified, and they were not hired. The housing market started falling, and several homes in the neighborhood went into foreclosure. After 8 months, this couple decided to sell the home because the savings had been stretched and was almost gone, and they knew they were in serious trouble. The appraiser came, and they found out the were now $60,000 upside down on the home due to the turn in market. Finally, with all other avenues exhausted, they turned to a bankruptcy attorney. They were able to file Chapter 7 and turn over the house, close and have all credit card balances forgiven, and the medical debt forgiven. They then moved into an apartment for 2 years, and were able to manage just fine on one income. After those 2 years, the unemployed spouse found a job, and then a month later the other spouse lost their job, and was out of work for 2 months. They made a smart decision at that point to begin budgeting long term on one income, and to save the second income. They have done very well since that point, and were able to purchase a new home at the 3 year post bankruptcy mark, and continue to live on the budgeted one income salary, and the entire second salary is in a savings account. If it weren't for bankruptcy and a fresh start, they would be burdened by a foreclosure and judgments from the medical and credit card bills they had been unable to pay when they were just trying to survive.

Story 2 is of an elderly lady. She was taken by some shady loan officers at several different companies. She was convinced that she needed a line of credit on her paid for home, to have available for emergencies, and the terms weren't completely explained as well as they should have been. When she became ill and was hospitalized for a month, she accrued sizable medical bills, even with medicare.  When she got home, her bank loan officer convinced her to payoff her medical bills with the line of credit, to "help on her taxes". She didn't realize that the minimum payment wasn't in her meager social security budget, and that she'd then be convinced to get credit cards and personal loans to cover her expenses. She found herself going hungry and without medication to try and pay these bills, until a family member realized what was going on, and stepped in. At that point they realized she wasn't of sound mind to make these types of decisions on her own anymore, but they still had quite a mess to clean up, and foreclosure proceedings were in process on her home because she hadn't been able to pay the line of credit bill, and didn't realize it put her home at risk. They took her to a bankruptcy attorney who got everything paused while they figured things out. Ultimately they decided to have her file, and then moved to a Senior Care facility. Fortunately they got this done and all the debts forgiven so they weren't forced to deal with it all after her passing and while they were grieving, and she was able to live out the remainder of her days without the burden of all that debt hanging over her head.

Now I know some people will disagree with my perspective on things, and that's ok, everyone is entitled to their opinion. I also know that there are irresponsible people out there. I just want to remind everyone that you don't know all the details of others financial situations, and should they need to seek the help of a professional, such as Nevada Bankruptcy Attorneys, for advice, then don't judge them. It's a very hard, personal decision, and a last resort for most people. Sometimes people have issues that aren't other peoples business, and they need to do what they need to do to get them resolved, without the judgment of others in their families, circle of friends, church families, etc.

You can rarely go wrong by offering support and encouragement instead of gossip and judgment.

This is a sponsored post, courtesy of Las Vegas Bankruptcy Attorneys, but is an issue I feel strongly about, and that is why I signed up to participate. As a loan officer, I saw many times the irresponsible angle, and I know it's there. As a consumer, and a friend, I have also seen responsible people fall on hard times, and suffer from problems not of their own making. Most people have good intentions and do the best they can, but it is great to know that their are solutions, occasionally bankruptcy, that are available when people absolutely need that relief.

***Disclosure: I am participating in a blogger campaign in behalf of Cary bankruptcy
attorneys and was compensated. However, the views and opinions are my own.***

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