I began practicing bankruptcy law in 1991 and have been practicing it continuously since then, representing consumers and small businesses in the area of Chapter 7 and Chapter 13 bankruptcy. I was attracted to it in law school when I took several bankruptcy classes and liked them, so when I got out of law school and opened my own practice, I found that marketing for bankruptcy was a viable area of practice for me and I enjoyed doing the bankruptcy work.
Is There a Typical Person Who Files for Bankruptcy?
We cannot classify the type of person other than the fact that they’re generally making under $100,000 a year; I have young people just starting out who make mistakes in their youth and I have couples who are getting divorced and one spouse doesn’t have the resources to continue paying the debt. I have older clients whose life experiences catch up with them whether it is medical bills, supporting a child or loss of a job and they just could not keep up with their house payments and credit card payments.
Occasionally, I have older consumers who cannot afford to manage their own debt situation because they are retired and do not have the same level of income and they need to file. So, it is pretty much all over the place, I do not think there is any issue as far as age or gender, it is just people who deal with life experiences and have difficulties and just need a way to get a fresh start.
Do Men View Bankruptcy Differently Than Woman?
It is more along the lines of a personality type; there are people who are more prideful and they see bankruptcy as a moral issue rather than as a business decision. For those types of individuals, it is much more difficult to convince them to take advantage of the bankruptcy code. Other people are probably a little more humble and they understand that bankruptcy is there to help them and that it is really not a moral issue for them; they are just seeking help. Prideful people do not want to admit they need help, so when they come in, they look at the information but they will not take advantage of it.
Do People Hesitate in Filing for Bankruptcy Because of the Stigma Attached to it?
The whole stigma mentality is a game by the credit grantors such as the banks and the bill collectors. The whole idea is if you file bankruptcy, then you are a bad person morally. If we are talking 150 years ago, that may seem relevant, but in the modern day credit arena, you have grantors of credit that assign an account number to someone and give them credit along with a very high interest rate based on a loss ratio which means they have already built in an amount to cover their losses.
The idea behind the stigma is to encourage people to keep paying their debts and if they do not, then they are bad people. Banks want to force people who should be in bankruptcy to just keep paying because they do not want to lose the money and have their loss ratio impacted by an excessive number of people filing bankruptcy. As far as I am concerned, bankruptcy is a business decision; you have entered into a business relationship with the credit grantor and you are in a situation where you need to take advantage of the bankruptcy code; there is no moral issue involved. However, people wait because of the moral impact and end up doing more damage to themselves over the long run.
If consumers would just get the facts about what is really going on, then they could make an informed and intelligent decision on how to proceed. When the people come in with that attitude, I do my best to get across to them that this is a business situation. Once they understand that, then they can see it from a valid standpoint and decide if bankruptcy is their best option to give themselves a fresh start and improve the quality of their life and to be out from under all the bill collectors and the telephone calls and all the problems that come associated with debt.
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