You’ve probably heard the story of Sisyphus from Greek mythology. Sisyphus endured the never-ending task of rolling a giant boulder up a hill just to watch it roll down again where he would have to begin again. For many of us, our debts are just like Sisyphus’ boulder: a heavy burden that never seems to have any sign of stopping. Bankruptcy is one option to put an end to the debt cycle.
We meet with individuals every day who are asking the same questions as you: Is filing bankruptcy the right choice? It depends on your individual situation, but here are some common circumstances that make bankruptcy the better option for our clients.
1. You are at-risk of losing your home. You are behind on your mortgage payment, and you don’t know how you can catch it up. You can make the current payment now, but you can’t make up the past-due amount with one lump sum payment.
You can still keep your house! In a Chapter 13 bankruptcy, a repayment plan is established so the past-due amounts on your mortgage can be caught up in monthly payments you can afford. You also can resume your monthly mortgage payment while in the Chapter 13 so you can become and remain current. The filing of a bankruptcy petition stops the foreclosure process, even if a lawsuit has been filed, in most circumstances. Even if you have a sale date, in most circumstances the filing of a bankruptcy petition stops the sale of the home.
2. You received notice of a garnishment. You were sued, a judgment was entered against you, and now you have either just found out your bank account has had all the money removed or you just received word from your employer that your wages will be garnished. Living on an income where every penny on your paycheck is needed to make ends meet leaves no room for creditors to take substantial portions of your paycheck.
Once a garnishment has started, other than paying the debt in full, oftentimes there is little you can do to stop the garnishment process. The filing of a bankruptcy petition, in most cases, stops garnishments.
3. An old debt is haunting you. You have an old, substantial debt, whether it be from medical bills, a foreclosed home, a repossessed car, or some other source, that continues to haunt you. Because of the debt, you can’t get approved for a loan to buy a house, a car, or even a credit card. You’ve looked at repayment terms for the old debt, but it seems it will take you many, many years to pay it off in full with the monthly amount you can afford to pay. The interest keeps building on the debt even though you are paying. You’ve seen those credit card statements that say if you pay the minimum payment, it will take you 20.2 years to pay the debt in full?
Bankruptcy can put an end to the debt once and for all. Whether through a Chapter 7 or through a Chapter 13, there is an end in sight! (Sisyphus would have been thrilled!) In a Chapter 13, the interest for debts like credit cards is “frozen” on the date of filing your petition. It makes it possible to actually pay the debt once and for all! There is also a definite time frame to know when you will receive your bankruptcy discharge, the point at which your debts zero-out or are forgiven.
4. You have to get out of your home, your car, the lease, or some other debt, and there seem to be no other options to do so. We have many clients who have made a bad decision or were just the victim of circumstance and are now burdened with a debt they cannot afford or that is going to turn into situation number 3 above: the debt that haunts you forever.
Sometimes bankruptcy offers the protection from creditors you need while also relieving you of the obligation you can no longer afford. Some clients choose to “surrender,” or return the item to the creditor instead of keeping it and continuing to make the payments. You can surrender a home, a car, or other assets you have that are collateral for a debt. Sometimes keeping the house, as in circumstance 1 above, is the last thing you want to do. Bankruptcy can help you accomplish this in a controlled manner where the risk and potential outcomes are more easily anticipated.
5. You can’t sleep; you can’t answer your phone; you feel that gnawing in your chest and gut every time you open the mailbox. The anxiety that comes with having debt you cannot pay on the creditors’ terms is overwhelming. A survey in 2012 from Citizens Advice revealed that of those struggling with debt, 1 in 2 people found it hard to concentrate at work, more than half felt it affected their relationships and was causing problems with their partner, and 3 out of 4 felt it affected their mental health, while 1 out of 2 felt it negatively impacted their physical health. 4 out of 5 people said they lost sleep at night due to their financial debt. As you probably already know, struggling with debt with no solution in sight is stressful!
Many, many people tell us they are so relieved after meeting with an attorney to discuss the solution. For many people, that solution means filing bankruptcy; the filing of the bankruptcy means there is, finally, an end in sight!
Put down your boulder and rest. Call our office at 502-339-0222 to schedule a consultation with one of our attorneys who can help you determine if bankruptcy is the solution for you.
