Bankruptcy is not the end of the world!

Bankruptcy is not the end - it is a beginning! 

You are not alone in your financial distress!

Many of my clients feel afraid or upset about filing a bankruptcy case.  Please be reassured that there is no reason to have negative feelings about filing or to feel that it means you are a failure. Very likely you have friends, coworkers and neighbors have filed and you just don't know about it.  Also, many famous individuals and big companies have gone bankrupt including:

•  President Abraham Lincoln

•  Author Mark Twain

•  Automobile Manufacturer Henry Ford

•  Hall of Fame quarterback Johnny Unitas

•  Hollywood director Francis Ford Coppola

•  Television personality Larry King

•  Actor Mickey Rooney

•  Actor Burt Reynolds

•  Actress Kim Basinger

•  Entertainer Jerry Lee Lewis

•  Entertainer Wayne Newton

•  Entertainer M.C. Hammer

•  Entertainer Toni Braxton

•  Continental Airlines

•  United Airlines

•  US Airways (twice)

•  Donald Trump through one or more of his corporations

Bankruptcy is intended to provide you with a "fresh start" on your financial life.  There is absolutely no reason to feel guilty about filing bankruptcy, especially if you use it as an opportunity to provide future financial happiness and security for your family. All of these people went bankrupt, yet all of them went on to achieve success in their fields. So remember that while your financial problems are serious, they aren't the end of the world. Declaring bankruptcy is often the beginning of your new world in financial freedom. 

You Don't Need To Be Broke To File For Bankruptcy

You can be employed, have a bank account and own property as of the date your bankruptcy case is filed.   While there are some limitations on how much debt you can have and still file under chapter 13, the other chapters have no limitations.  You only need to be in financial distress in order to file.  "Financial distress" can result from many things, such as illness (physical or mental) or job loss - in other words, any thing that makes it difficult or impossible to pay your bills.  Many of my clients come to me after they have been laid off from work and then gotten a new job but got behind on the mortgage while unemployed.  Very often the mortgagee won't accept payments once you've gotten a couple of months behind, even if you can now pay, so filing a chapter 13 case may be the only way to stop foreclosure - simply because the lender won't cooperate!

There Is No Minimum Amount Of Debt Required For Bankruptcy

Bankruptcy is designed for people who are unable to repay their existing debts - it is not designed for people who owe small amounts.   There are many people who file for bankruptcy owing very little money, and others who do not need to file for bankruptcy in spite of the fact that they owe a large amount of money.  The decision to file a bankruptcy case should be based on your ability to pay your debts, not how much those debts are.

There Is Credit After Bankruptcy !

Many people worry about being able to get credit after filing a bankruptcy case.   The first thing to remember is that it probably was "credit" that got you into trouble in the first place.  For that reason, it is a bad idea to immediately start looking for credit again - learn to live with cash.  For many people, using credit is an excuse not to have a realistic budget and to avoid thinking about how they use money.  It is true, however, that the negative impact of  bankruptcy on credit is extremely exaggerated.  You will probably get offers for new credit cards fairly soon after your bankruptcy case is over.  The best thing to do, in my opinion, is to refuse all offers of credit cards until you've put together a realistic budget and savings plan. Once you've put a savings plan into place and start to build up your "cash cushion", you will be able to start thinking about new credit and may even find out that you don't need credit - that debit card works just fine.  If you want to buy a home or car after bankruptcy you will probably be pleased to know that I have had many clients purchase a home fairly soon after their case is over, but that only happens  if they've taken the steps necessary to establish their own financial stability.  

Your Employer or Neighbors Probably Will Not Find Out About Your Bankruptcy

The Bankruptcy Court does not get in touch with your employer when your case is filed, or tell anyone else about your case, unless they are named in your bankruptcy papers.  Sometimes it is better to give notice of the case, since that makes sure your debt is fully discharged, and it can help protect you from potentially illegal collection efforts, so it is better to be cautious and give notice.  Keep in mind, however, that all of the papers I file in the bankruptcy court are public records and anyone can go look at them.

Your Spouse Does Not Have To File For Bankruptcy With You

Often a married couple will file one petition together (called a "joint" petition), but that is not required.  The decision to file jointly or individually is based on the nature of the debts at issue.  This is particularly true in Chapter 13 because the automatic stay protects co-signers on debts, too.  Note that "married" may be defined by federal law, not state law, especially in Massachusetts since Massachusetts currently permits same-sex couples to marry; as yet, it has not been decided whether a same-sex couple in Massachusetts can file a joint petition.

Your Immigration Status Is Not Likely To Be Affected By Bankruptcy

While this office is not expert in immigration law, we know of no reason why filing a bankruptcy case would affect your immigration status so long as you are completely honest.  

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