“Dear Steve,
We have been married almost 25 years. My husband lost his job about 3 years ago and does have another job, but making way less money. We have made alot of financial mistakes in the past and have made an appointment to meet with a bankruptcy lawyer, I am now so scared.
Our bills are being paid, but we are struggling so bad….living paycheck to paycheck, adding stress to our marriage. Of course our house is not worth what we owe and we’d sell it in a heartbeat. We are just in way over our head and not able to figure how to get out…..we are at the end of our rope. We have a mortgage, 2 car paymts, 3 to 4 credit cards, college tuition payments, the the normal living expenses, (utilities)
We have made a appointment with a bankruptcy attorney and now I am so scared and wondering if this is the right decision for us, especially since we have made so many mistakes. The attorney is Jarnicki and Assoc. in Lebanon Ohio. We feel as if we should be getting ready to live our lives to the fullest with a son in college and a daughter in high school, but I don’t know if our marriage will survive. Please help and advise me.
Thank-you!!
Kelly”
Dear Kelly,
You appear to be suffering from debtor guilt. It’s natural and normal. Typically people become afraid and fearful for a number of reasons. They feel as if they have failed in some way, or maybe they believe money problems only happen to irresponsible people. Some people get sucked in to religious beliefs or labor under misconceptions.
I’ve been helping people with debt problems since 1994 and lived through my troubles in 1989-1990. What I know after all that experience is that bad debt happens to good people. For whatever reason people hit the financial wall and then out of fear make even worse decisions and mistakes in how to get out of debt.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
The fact is that bankruptcy is the only process that gives you and rights and protections under the law. And least we forget, bankruptcy is a legally prescribed process that operates with the blessing of the court and judicial system.
If I could wave a wand right now I’d wish for you to stop thinking emotionally about the situation and instead think logically. Logically it sounds like there is no reasonable expectation you are going to get caught up by staying on the current path. It does not sound like you are able to save or build up emergency cash in case of an unexpected financial surprise and it sounds like unless you take some action you will simply be trying to dig yourself out of this hole for the next decade rather than filing bankruptcy.
So let’s look at what happens if you file bankruptcy. When you file the creditors can’t call you, can’t try to collect and can’t sue you. The majority of people that file qualify for a Chapter 7 bankruptcy and their debt is discharged in a few months. After that they can begin to save, build an emergency fund and rebuild their credit. Read this guide on how easy it is to rebuild credit.
Don’t be a victim of your past misfortune. Instead, think logically about bankruptcy and if you decide to file then take what you can about your past mistakes and learn from those experiences. There is no sense wasting the education gained from perfectly good mistakes.
Finally, the bankruptcy attorney is not there to judge you. They are there to be your advocate and help you through the process. There is nothing to be afraid of. If you want, you can click here to find a local bankruptcy attorney.
Please post your responses and follow-up messages to me on this in the comments section below.
ok Steve, we met with attorney and just not sure what to do. Bottom line is he recommended chapter 7 and we would lose our home and 1 vehicle. We are okay with the vehicle, but he said it would take about 1 year til we would lose house, which would be right at the beginning of our daughter’s senior year, do you know if there is a way to prolong that? We would like to live here at least til she graduates high school. We have made some really bad financial decisions in the past, one being getting scammed by Credit Solutions, which of course we wish now we would have NOT done. We are afraid several years from now we may regret filing chapter 7.  Please Help, we are just not sure what to do or who might we talk to for more advice. ??????
ok Steve, we met with attorney and just not sure what to do. Bottom line is he recommended chapter 7 and we would lose our home and 1 vehicle. We are okay with the vehicle, but he said it would take about 1 year til we would lose house, which would be right at the beginning of our daughter’s senior year, do you know if there is a way to prolong that? We would like to live here at least til she graduates high school. We have made some really bad financial decisions in the past, one being getting scammed by Credit Solutions, which of course we wish now we would have NOT done. We are afraid several years from now we may regret filing chapter 7. Please Help, we are just not sure what to do or who might we talk to for more advice. ??????
I’m sorry to hear about your experience. But from the people who work swiftly it is not necessarily the experience most have.
Current restrictions in lending are due to a number of factors but bringing the credit score back up deals with most of that.
I’m currently seeing people getting very reasonable rate mortgages after three years, car loans after two years and if the credit report has been addressed in accordance with my guide, unsecured credit is available again in a couple of years or less. And that’s less time that it takes to complete a credit counseling program.
Bankruptcy is legal and appropriate solution for many. And if facing a future situation ahead of the 8 year limit the way some handle this is to enter a Chapter 13 to get you to the 8 year mark and then convert it to a chapter 7 if appropriate.
I guess ultimately the issue comes down to the same old thing, making sure you use the right solution to address the situation and goals.
Debt solutions never come with absolute application and people considering solutions should fully investigate the solution before they embark, in this case to meet with a bankruptcy attorney licensed in the state to understand what bankruptcy would mean in a particular situation.
If we were going to talk about comparing credit counseling and bankruptcy there are many factors to consider when it comes to cost.
If you are able to qualify for a Chapter 7 and discharge your debts in a couple of months and then begin rebuilding credit and regain the capacity to save money to build an emergency fund, that has a significant mathematical component and be far cheaper in the long run.
A credit counseling program that takes five years and leaves you with less ability to save along the way and protect yourself and family in case of a financial emergency, can be must costlier. For example, the extended repayment period in a credit counseling program delays rebuilding your current credit and provides for years more in payments. But for some, that might be the solution they consider to meet their goals.
The ability to save while getting out of debt is one of my current major concerns. Recently I covered a stud that showed nearly 50% of Americans would be able to get their hands on $2,000 within 30 days. For me that’s the most concerning issue to plan for as part of any plan to deal with the situation immediately at hand.
Bottom line, when it comes to bankruptcy, don’t make any assumptions and don’t base the decision on the perception of stigma or impact but on the reality of the debt problem and what the best solution is to achieve that goal.
Thank you Nicole!!
Thank you, I appreciate the response.
Kelly,
It will be the best thing you ever did! I had so much angst when I visited the office for the first time, by myself AND on my birthday; the worst part about it was making sure that I had all of the paperwork that they requested! Make sure you have everything they ask for; it makes it a breeze. We met with the attorney in October and sat before the trustee this June 1st; it does take a while, but it is so worth the peace of mind you feel afterward. I also feel I was very lucky with the attorney’s office I found. After consulting with Damon Day I chose an attorney whose choice of law was bankruptcy’s ONLY. I am so glad that we did! Best of luck to you!
Nicole
Kelly,
It will be the best thing you ever did! I had so much angst when I visited the office for the first time, by myself AND on my birthday; the worst part about it was making sure that I had all of the paperwork that they requested! Make sure you have everything they ask for; it makes it a breeze. We met with the attorney in October and sat before the trustee this June 1st; it does take a while, but it is so worth the peace of mind you feel afterward. I also feel I was very lucky with the attorney’s office I found. After consulting with Damon Day I chose an attorney whose choice of law was bankruptcy’s ONLY. I am so glad that we did! Best of luck to you!
Nicole
Thank you Nicole!!
if a person qualifies for a chapter 7 bankruptcy, then it is usually quick and painless- probably in 4 months all your debts will be discharged and it is not that hard to start fresh and start rebuilding your credit. HOWEVER, and I say this HOWEVER with a stern warning being a person who is still going through it – do prepare to be “punished” after bankruptcy for as much as eight or more solid years – you will be able to get credit, but probably not Premium credit and NEVER go bankrupt for small amount of debts because after bankruptcy, you have an 8 year statute of limitations where you cannot file chapter 7 again- 8 years is a long, long time – anything can happen in 8 years – loss of job, accident, no medical insurance and like many Americans who filed for bankruptcy in the early 2000’s and started to build a life once again, only to loose their jobs or become a victim of the housing crises a few years later due to the “great recession” and mortgage crises – they are out of luck and have to wait 8 solid years to be able to file a chapter 7 again. Many of them cannot afford a chapter 13 or do not even qualify for a chapter 13 due to unemployment, as th ecost of a bankruptcy attorney has gone up significantly since the October, 2005 bankruptcy laws were changed. Always explore credit counseling if the amount of the debts can still somehow be managed. If you are in a hopeless situation, yes, do indeed explore filing a chapter 7 as long as you are aware that many creditors will “punish” you for many years by denying you any type of premium credit – especially in an environment where the banks will still not lend in this very stalled economy and the fact that for 8 years after you may not file a chapter 7. Because of this reason and the absolute tremendous expense of a chapter 13 bankruptcy, the authors of these debt articles need to understand that not everyone can file for bankruptcy.
if a person qualifies for a chapter 7 bankruptcy, then it is usually quick and painless- probably in 4 months all your debts will be discharged and it is not that hard to start fresh and start rebuilding your credit. HOWEVER, and I say this HOWEVER with a stern warning being a person who is still going through it – do prepare to be “punished” after bankruptcy for as much as eight or more solid years – you will be able to get credit, but probably not Premium credit and NEVER go bankrupt for small amount of debts because after bankruptcy, you have an 8 year statute of limitations where you cannot file chapter 7 again- 8 years is a long, long time – anything can happen in 8 years – loss of job, accident, no medical insurance and like many Americans who filed for bankruptcy in the early 2000’s and started to build a life once again, only to loose their jobs or become a victim of the housing crises a few years later due to the “great recession” and mortgage crises – they are out of luck and have to wait 8 solid years to be able to file a chapter 7 again. Many of them cannot afford a chapter 13 or do not even qualify for a chapter 13 due to unemployment, as th ecost of a bankruptcy attorney has gone up significantly since the October, 2005 bankruptcy laws were changed. Always explore credit counseling if the amount of the debts can still somehow be managed. If you are in a hopeless situation, yes, do indeed explore filing a chapter 7 as long as you are aware that many creditors will “punish” you for many years by denying you any type of premium credit – especially in an environment where the banks will still not lend in this very stalled economy and the fact that for 8 years after you may not file a chapter 7. Because of this reason and the absolute tremendous expense of a chapter 13 bankruptcy, the authors of these debt articles need to understand that not everyone can file for bankruptcy.
Thank you, I appreciate the response.
I’m sorry to hear about your experience. But from the people who work swiftly it is not necessarily the experience most have.
Current restrictions in lending are due to a number of factors but bringing the credit score back up deals with most of that.
I’m currently seeing people getting very reasonable rate mortgages after three years, car loans after two years and if the credit report has been addressed in accordance with my guide, unsecured credit is available again in a couple of years or less. And that’s less time that it takes to complete a credit counseling program.
Bankruptcy is legal and appropriate solution for many. And if facing a future situation ahead of the 8 year limit the way some handle this is to enter a Chapter 13 to get you to the 8 year mark and then convert it to a chapter 7 if appropriate.
I guess ultimately the issue comes down to the same old thing, making sure you use the right solution to address the situation and goals.
Debt solutions never come with absolute application and people considering solutions should fully investigate the solution before they embark, in this case to meet with a bankruptcy attorney licensed in the state to understand what bankruptcy would mean in a particular situation.
If we were going to talk about comparing credit counseling and bankruptcy there are many factors to consider when it comes to cost.
If you are able to qualify for a Chapter 7 and discharge your debts in a couple of months and then begin rebuilding credit and regain the capacity to save money to build an emergency fund, that has a significant mathematical component and be far cheaper in the long run.
A credit counseling program that takes five years and leaves you with less ability to save along the way and protect yourself and family in case of a financial emergency, can be must costlier. For example, the extended repayment period in a credit counseling program delays rebuilding your current credit and provides for years more in payments. But for some, that might be the solution they consider to meet their goals.
The ability to save while getting out of debt is one of my current major concerns. Recently I covered a stud that showed nearly 50% of Americans would be able to get their hands on $2,000 within 30 days. For me that’s the most concerning issue to plan for as part of any plan to deal with the situation immediately at hand.
Bottom line, when it comes to bankruptcy, don’t make any assumptions and don’t base the decision on the perception of stigma or impact but on the reality of the debt problem and what the best solution is to achieve that goal.
Let me know how the appointment goes. If you don’t like the attorney for some reason, find another one.
Thank you so much!
Thank you so much!
Let me know how the appointment goes. If you don’t like the attorney for some reason, find another one.