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Bankruptcy Overview

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Bankruptcy * Licensed in Kansas and Missouri

BANKRUPTCY - THE BIG PICTURE

Consider this perspective – last year over 1.6 million individuals and married couples filed for bankruptcy.  The most common reason for filing a bankruptcy is because of (1) job loss and an inability to find work at the previous level of compensation, (2) medical expenses that are not covered by insurance or government programs, (3) business ventures gone sour, and (4) divorce or legal separation.

It’s not an issue if you have sufficient savings, but many of us lack those savings.  There are a number of reasons for this, but let’s face it, most of us are over our heads in debt and we’re only one paycheck away from financial ruin.  In these troubled financial times, economic distress is not only a concern, it’s a reality.  Bankruptcy or reorganization can be a positive way to obtain some relief.  Some people think bankruptcy is the end, when in fact, it’s really just the beginning.

Why Credit Counseling doesn’t work.

We have to hand it to the credit card companies.  They are the masters of manipulation.  Why do you suppose all of these recent “Non-Profit” consumer credit counseling agencies have popped up?  Whose idea do you think that was?  Some genius in a collections department somewhere came up with the idea of changing the marketing of credit counseling agencies.  They are nothing more than a collections business with great marketing skills.  Consumer Credit Counseling agencies are all backed by the megalithic credit card companies.  Have you ever wondered why certain agencies can work with some creditors, but not others?  Have you ever wondered why consumer credit counseling agencies can only deal with credit card debt and not medical bills, taxes, or other types of debt?

Don’t get us wrong.  From a certain standpoint, it’s admirable.  We have to admire their public relations ability.  The way they have hoodwinked the public into thinking they were doing you a favor.  In fact, the truth of using consumer credit counseling is that it looks just as bad on your credit report as a bankruptcy does.  So why are you struggling to make that credit counseling payment (plus a small ‘donation’) each month when you could be using the government’s own laws to protect you from creditors?

Why you should not feel guilty about filing bankruptcy or seeking relief from your debt.

2/3 of the Gross National Product is based on consumer spending.  It’s your dollar that really keeps this economy afloat, not manufacturing, and not business, it’s your dollar.  The system needs you to spend your money in order to perpetuate itself.  Remember right after September 11 when the president himself told us to keep on spending?  He urged us in his State of the Union address to spend more, it was our patriotic duty.

As a consumer, we are bombarded daily with messages of, "spend, spend, spend, buy, buy, buy."  Marketers have developed all sorts of sophisticated advertising techniques (we prefer to call it “manipulation”) to get you to part with your hard earned dollar.

Did you know that over 3 Billion credit card solicitations were mailed last year to consumers?  That’s ten solicitations for every man, woman, and child.  Credit card lending is a multi trillion dollar a year industry.  Young individuals who are just getting started and people with bad credit are the most targeted segment of the population.  Credit companies know that high-risk debtors are willing to pay ultra high interest rates.  That’s how credit card companies make money.

The simple truth.

Having so much credit readily available makes it easy for us to live beyond our means.  It’s hard to resist the temptation of the credit card companies offering us a brand new car for no money down, or even better, cash back.  Did you think the car company would ever give you cash to buy a car?  Of course we have to pay that back later on!  But that new car is so nice, we don’t think about that fact.

When we finally do get caught up in the bills and the late payments, the first feeling we have is guilt, fear, or shame.  We’re the ones feeling bad because the credit card companies want us to.  It’s a play upon our social values.  They know they are able to take advantage of you.

You don’t have to feel guilty.

Point of order – the airlines needed a 15 billion dollar bailout in 2001.  WorldCom has filed for bankruptcy.  United Airlines has filed for bankruptcy.  In the age of multibillion-dollar bailout packages, do you really think you should feel bad because you could not pay your bills?  Consider that even if you do file for bankruptcy, the credit card company gets to write it off on their taxes and they get yet another break.  Do you still feel bad that you can’t pay your bills?

There is more to life than money.

As you have read above, divorce or legal separation is one of the biggest contributors to bankruptcy.  But in our experience, we believe that financial trouble is the biggest contributor to family troubles.  So many times we see families being torn apart because of the stress that is created by money.  Many clients come to see us for both a divorce and bankruptcy.  We recommend the bankruptcy first and then we’ll see if the dissolution is really necessary.  Often times, it isn’t.  You shouldn’t be losing sleep at night over money.  Creditors should not be permitted to harass you at all hours of the day and night.  Life simply is not worth that hassle.  Bankruptcy provides you with a chance for a fresh start and a renewed perspective on life and your family.

All that sounds wonderful, what’s the down side?

Bankruptcy is a wonderful solution, but it has a downside.  It will be difficult to obtain new credit for a couple of years.  You will get new credit cards very quickly, but in terms of buying a home or a car, that’s about two years away.  You have to provide the bankruptcy court with a lot of information about your life.  And let’s face it, bankruptcy still has a certain stigma.  Nobody ever wants to go bankrupt and nobody wants to say they can’t handle their finances.

While those are definite downsides, they also pose a certain opportunity.  In facing the truth, you gain experience and responsibility to not let yourself get caught in the same situation twice.  By not having credit, you learn to live life without debt (a distinctly rewarding experience).  The truth is, many or our clients have found a renewed lease on life after their bankruptcy, and we have yet to have someone come back and tell us it was a mistake.  We must be doing something right.

Call us today and let us show you how we can eliminate your debt and help you get your “Fresh Start”.
    
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