Bankruptcy: Top Ten

Reasons Not to Feel GuiltyLaw Offices of Andrew D. Myers

attorney-myers.com

@attorneymyers

Reason 1:

Loss of Income

It often is the case that there is a

job loss, followed by an inability to

find work that pays nearly as well. If

you have worked in a high income

level and taken an hourly low

income position, or found nothing at

all because you are

"overqualified", your loss of income

is out of your control.

“We are not hiring” courtesy of billsphoto on Flickr

Reason 2:

Medical Expense

Medical expenses that are not

reimbursed by insurance or

government programs are a top

reason for bankruptcy. It is not your

fault and medical providers by

federal law may not deny you

treatment for the fact that you are

filing bankruptcy.

“SDC10680” courtesy of tahini on Flickr

Reason 3:

Divorce or Legal

SeparationDivorce often leaves one swimming

in debt. It may be that one was

trying to keep up or trying to

provide an acceptable standard of

living. Regardless, divorce often

leads to uncontrollable

circumstances. It is almost always

better to wait until the divorce is

over before filing bankruptcy to

make sure that the final court

orders allocate responsibility for

debt. It is "cleaner" this way. But,

there are circumstances in which

an earlier bankruptcy might be

desirable.

“99% Dissolved” courtesy of disneyite on Flickr

Reason 4:

Small Business

Failure

Often people launch small

businesses which for whatever

reason do not make it. Sole

proprietors do better in a chapter 7

or 13. However even if there is an

LLC or other entity, banks and other

lenders often require a personal

guarantee, and your personal

bankruptcy will discharge your

personal liability for the business

debt.

“Another sign of the times” courtesy of crobj on Flickr

Reason 5:

Consumer

Spending Drives

the USA

Economy

About two-thirds of the U.S.

economy is consumer spending.

We are all pressured to buy buy

buy. Just after 9/11 President

George W. Bush urged Americans

to spend more money as a way of

boosting the economy and not

letting the terrorists win. President

Obama has urged consumer

spending to remain high, as a way

of shoring up the economy.

American consumers follow this

advice with a vengeance.

“consumerism” courtesy of lissame on Flickr

Reason 6:

Consumers Give

in to PressureWhether it is the friend, neighbor or

other social contact that has the wide

screen TV, new computer, latest

cable/internet/high speed/recording

and other technology, car, interior

decorations or otherwise, often

consumers simply cannot avoid family,

social or other pressure to spend.

Credit card offers are relentless. On

college campuses, credit is offered to

teens with no income. There are

stores where you can't check out

without being pressured with the

enticement of a discount for opening a

new credit account. Some of these

stores charge 25% interest.

“Temptation” courtesy of hauntedplace on Flickr

Reason 7:

Bad Timing

Easy availability of credit allows

Americans to live well beyond their

income level. When unexpected

things go wrong, there are few

alternatives. Illness, job loss and

other factors force people against

the wall of impossible spiraling

credit payments.

“Time me” courtesy of mrlins on Flickr

Reason 8:

Bankruptcy Is In

The Bible

"At the end of every seven years

you shall grant a release. And this

is the manner of the release: every

creditor shall release what he has

lent to his neighbor. He shall not

exact it of his neighbor, his brother,

because the Lord's release has

been proclaimed." Deuteronomy

15, 1-2. This Old Testament

passage clearly embraces the

concept of bankruptcy.

“Bible” courtesy of manc72 on Flickr

Reason 9:

Bankruptcy Is a

Constitutional

RightBankruptcy is firmly embedded in the

U. S. Constitution. The same

Constitution which gives us

democracy and our freedoms of

speech and religion also directs

Congress to pass “uniform Laws on

the subject of Bankruptcies.” (Article

I, Section 8.) The U.S. Supreme

Court explained bankruptcy law this

way: „[I]t gives to the honest but

unfortunate debtor…a new

opportunity in life and a clear field for

future effort, unhampered by the

pressure and discouragement of

preexisting debt.” Local Loan Co. V.

Hunt.

Reason 10:

How Do You

Spell Relief?Potential bankruptcy filers often worry

about their credit rating. It is true that

under the 2005 revisions to the U.S.

Bankruptcy Code, the filing of a chapter 7

bankruptcy can stay on a credit report up

to 10 years. But, most people considering

bankruptcy already have relatively bad

credit. One could keep paying minimum

payments or more for years, and simply

"swim" in the interest and other charges,

never reducing the principal. The

bankruptcy will at least give the filer a

fresh start. Secured creditors will continue

giving loans, and unsecured creditors are

increasingly giving fresh credit based on

the fact that another chapter 7 cannot be

filed for a long time.

Law Offices of

Andrew D. MyersBankruptcy and Personal Injury Lawyer

Derry, NH and North Andover, MA

www.attorney-myers.com

800-206-3889