By Chris Stanford, The Stanford Law Firm
I see many people every month who desperately want to find a way out of serious financial trouble. Most people try to “fix” their financial problems rather than immediately rush to file bankruptcy. Ironically, the problem is that the “fix” that people often choose usually worsens the situation and is what leads to a bankruptcy filing.
A lot of people are living paycheck to paycheck and have no savings to fall back on. Then unexpected expenses strike: the transmission fails on their vehicle or a serious medical event hits that exceeds insurance coverage. Other times, people simply do not earn enough income to pay all of the normal bills that come with life.
Once the bills pour in, people flock to credit card and cash loan companies for a temporary fix. The interest rates that these companies charge can be predatory. High interest rate loans then spiral out of control until there are no more temporary “fixes” to be had.
The people I meet with are usually ashamed of their situation and never thought a bankruptcy would happen to them. I assure them that financial problems happen to a lot of us – after all, our mighty government is essentially bankrupt. Bankruptcy clients can be educated on helpful ways to manage their income and expenses. Some bankruptcies involve repayment of loans after debts are restructured. Ultimately, the bankruptcy process can be a healthy way to help folks manage their financial situations now and in the future.