When out attorneys meet with a potential bankruptcy client at Halcomb Singler, LLP, we typically begin the meeting by asking the potential client to give us some background on what happened. This helps our attorney understand what caused the financial situation so we can ask follow-up questions to best determine the appropriate method for solving the debt issues.
During these conversations at our Carmel, Indiana office we often hear about significant medical expenses, job loss, student loan debt or simply just a bit of overspending over a long period of time. We also hear about how the person(s) have done their best to avoid bankruptcy. Sometimes the avoidance of bankruptcy for that person made a lot of sense and other times it leaves us wishing that person would have spoken with a bankruptcy attorney years ago. The purpose of this blog is to discuss examples of when it makes sense to consider speaking to a bankruptcy attorney.
In my experience, people do not run up debt and then file bankruptcy on purpose in a premeditated manner. After meeting with thousands of Hoosiers to discuss debt, I know that the vast majority of people have spent years doing their best to pay down debt. They have done all the things that they should do including cutting living expenses, using income tax refunds to pay outstanding debts and sometimes even obtaining second jobs. Most people do everything within their power to avoid bankruptcy because they are honest, hard working people that would like to repay their creditors. Most people feel ashamed or embarrassed that they need to consider filing bankruptcy at all. While I do believe it is a good thing that people would prefer to avoid bankruptcy, I often wish that they would have sought the advice of a bankruptcy attorney years earlier.
Avoiding bankruptcy is a great plan for for most people and I routinely tell people I meet with about bankruptcy that if you can pay off the debt, you should pay off the debt. However, I have found that most of the people I meet with have been spending years attempting to pay off debt and have not made any progress. It is also common that these people are not saving any money for retirement because they want to pay off the debt. Finally, it is also fairly common for people to fail to take prescription medication during this time because they want to limit their out of pocket expenses. Sometimes people even tell me that they are only spending $100.00 per month on food.
All of those stories are sad. I recommend that if you have been attempting to pay off debt for 3 to 4 years, aren’t saving for retirement and aren’t making progress toward getting out of debt that you meet with an experienced bankruptcy attorney. In addition, if you are considering taking a distribution or cashing in a retirement account to pay debt, please meet with a bankruptcy attorney prior to doing so in order to be informed prior to making that decision. There are certainly times when taking funds from retirement to pay debt makes a lot of sense. However, we see a lot of people who have taken large retirement distributions, paid off a lot of debt and in the end still need to file bankruptcy. In every one of those cases I sincerely wish I could go back in time to prevent that person from taking a retirement distribution, as retirement account are typically protected in bankruptcy.
Halcomb Singler strives to put people in a good financial position moving forward from bankruptcy. We speak with people about the importance of starting to save for retirement and putting back funds for an emergency. We don’t want to see people spend 10 years attempting to avoid bankruptcy, only to be forced by a creditor though wages garnishment, etc., to file bankruptcy. We would prefer to meet with people 8 years earlier after they have tried for 2 years to get out of debt. We wish we could get that 8 years back to advise our clients to save for retirement and so that we can stress that it will be extremely difficult to live in old age without a nest egg because creditors aren’t going to give you a loan for retirement.
Finally, I want to stress that at Halcomb Singler we are looking for the method to solve your debt that works best for your specific situation. Sometimes that means we will recommend Chapter 7 or Chapter 13 bankruptcy. Sometimes we will recommend debt settlement outside of bankruptcy. Sometimes we will recommend that you discontinue payments to creditors and not file bankruptcy. Sometimes we will recommend getting a second job or changing jobs. But what we also stress at Halcomb Singer is that the decision is up to you. We will educate you regarding the options as we see them, but we will not pressure you to file bankruptcy or not to file bankruptcy. Our bankruptcy attorney, Erika Singler, has filed hundreds of bankruptcy for good people that need a fresh start, has negotiated debt settlements with creditors outside of Court, has negotiated with creditors to settle cases filed in Court and has advised many, many people against filing bankruptcy.
If you live in the Indianapolis area and would like to set up an appointment to meet with a Halcomb Singler attorney contact us at (317) 575-8222. Or, if you don’t live in the Indianapolis area find a local bankruptcy attorney to consult. Just don’t wait years and years before speaking to an attorney. Bankruptcy may or may not be right for you, but at least you will have the information you need to make that decision and an expert in the area of bankruptcy to whom you will be able to ask questions. Halcomb Singler does not charge a fee to meet with people regarding debt/bankruptcy issues. The meeting is up to 45 minutes at our Carmel, Indiana office. Call now for your appointment.