It happens all the time. Someone walks into my office convinced that bankruptcy is their only option and walks out with the kernel for a plan to get their finances under control. Take today, for instance. A gentleman came in for a consultation wanting me to file a Chapter 13 bankruptcy for him (as a side note, he came in after working on the petition himself and finally called my office after realizing that it was too complicated for him to tackle alone).
My first objective was to get him to slow down and to talk about why he was thinking about bankruptcy, specifically Chapter 13, in the first place. I asked him to tell me about his debts, what he owed, whom he owed, etc. I also asked him about his income. It turns out that he only owed about $10,000 in unsecured debt. Given his income, this amount wasn’t completely unmanageable. Sure, things were tight, but a lot of his money was going to non-debt expenses.
He also told me that he had filed Chapter 7 bankruptcy just a few years ago. That explains why he wanted to talk about Chapter 13. You can only file Chapter 7 bankruptcy every eight years. You can file a Chapter 13 four years after a Chapter 7. He had also bought a new car several months ago, and the monthly payment was taking up a huge chunk of his income. Of course, he wanted to keep the car.
After I got all this information, we talked some more about some alternatives to filing Chapter 13. First, would be to take better control of his disposable income, maybe staying in for dinner more often. Second, we talked about trading his new car in for a reliable used car, which would reduce monthly payments, and registration and insurance costs. Finally, we talked about the impact of filing bankruptcy again could have on his credit record, as well as his personal life.
The fact is, he hadn’t used his first experience in bankruptcy as the opportunity to make changes that he could have. I think he recognized that, but he needed someone else to tell him. Instead of living within his means, he had decided that his new beginning from bankruptcy was a chance to start racking debt up again. It was a long conversation. Things slowly came into focus for him and hopefully he’ll use some of our ideas to get things under control. And hopefully, I won’t be filing his Chapter 13 bankruptcy.
If you’re struggling with your debt, we hope you’ll come in for a free, no-obligation consultation with an experienced bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.