As Philadelphia bankruptcy lawyers we are often confronted with clients who are concerned about filing. Some of those concerns are tangible, physical worries, like whether they’ll be able to keep the house or whether they will ever be able to get credit again.Others are far more emotional. And one of the most prominent emotions, the one that keeps many people from moving ahead into a fresh financial future? Is shame.
But you should never feel ashamed to do what’s right for you and your family. And the process might not be as hard to face as you think.
For most people, bankruptcy is a routine process.
It’s not a simple process by any stretch of the imagination. There are a lot of ways it can go wrong if you don’t have a qualified attorney by your side.
But 800,000 people filed nationwide in 2016. Most of those people got qualified attorneys and did everything they were supposed to do, which resulted in a pleasantly boring bankruptcy proceeding for all parties.
When do things typically get interesting? When creditors show up to challenge the filing, primarily, or when clients do something that can get them accused of committing fraud. A good attorney can help you avoid both situations.
Things still happen. If they do, you really need an attorney. Should your creditors challenge your case, a good attorney can defend you. And if you slip something by your attorney and land in hot water, it’s good to have someone at your side who knows how to help.
With a lawyer’s help, however…
You probably won’t ever see a judge.
If you’re having nightmare visions of having to stand before a perfect stranger to explain, even justify, the things that have gone so horribly downhill in your life lately, please let us put your mind at ease. Most Chapter 7 bankruptcy cases don’t go before a judge.
That happens, again, when things get “interesting.”
Even if you do wind up before a judge, they’re not going to be asking why you wound up in debt. They won’t be judging your unwise spending spree at the department store or asking why you didn’t put more money into savings when you had the chance.
Instead, they’ll be reviewing complex issues to answer simple questions like: does this creditor have the grounds to challenge your case?
In Chapter 13, you might see a judge once: to confirm your payment plan. Again, he won’t be scrutinizing every last financial decision you’ve ever made. The judge will be deciding whether the plan fits within the bounds of the federal bankruptcy guidelines.
But don’t take our word for it:
“A debtor’s involvement with the bankruptcy judge is usually very limited. A typical chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case. A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, which is usually held at the offices of the U.S. trustee. This meeting is informally called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.” –USCourts.gov
You will spend a little time talking to your trustee, but the trustee isn’t there to judge your life or your choices either. The trustee is there to make sure assets are handled appropriately.
Nobody is going to know, unless you tell them.
Your employer won’t know. Your mom won’t know. Your best friend won’t know.
There are no newspaper notifications. These people are not sent letters or given courtesy phone calls. The only people who will know you are filing for bankruptcy are you, your lawyer, the courts, and your creditors.
Things can get a little sticky if you owe money to relatives. You have to disclose those debts in a bankruptcy case even if you’d prefer not to, or else you’re committing fraud. That can be a little difficult, but hopefully your relatives will understand. You can certainly assure them you will pay them as soon as you can, as nothing stops you from paying any debt after a bankruptcy discharge.
Attaching moral obligations to financial circumstances makes little sense in the modern world.
Obviously it’s important to only take out debts you intend to pay. To do anything else would be a form of fraud.
However, today’s world is complex. Sometimes credit card interest stacks up in a way that ensures you’ve paid three to five times what you originally owed on the card. After you’ve paid $199 for a sweater that cost $36 your moral obligation is probably met. Interest rates exist to profit the credit card companies.
You’re not taking money out of some sweet family business owner’s pockets. Most likely, you owe major corporations. They will usually just write the bad debt off on their taxes. They are designed to absorb some loss. The system is designed to help them.
Speaking of major corporations, they declare bankruptcy all the time. And while they are solvent? They use financial laws and tax laws to their advantage. Some of them have access to tax breaks or subsidies the average American family can only dream about. If they get to use the law to protect their interests, you get to use the law to protect yours.
If you must attach some morality to the process, use it to help you figure out how to do a better job of living within your means so you can make the most of your fresh start.
Ready to move forward?
Call us to schedule your free consultation today.