As as a bankruptcy lawyer, I also consider myself a counselor at law. What this means is that I believe my first responsibility to my clients, or potential clients, is to give sound and competent advice that I believe is in their best interest. Sometimes that means I won’t make any money.
The fact is, sometimes bankruptcy isn’t the best option for people who are struggling with their finances. Sometimes the best solution for people who are making a good income but still struggling to make ends meet is to take a good, hard look at where their money is going every month.
Recently I had a young couple come in who were wondering if they should file bankruptcy. As I do during any consultation, I started by asking them why they were considering it. While the answer is often the same with most people (they can’t pay their bills), I’m also interested in knowing if there has been a specific event that has brought them in, such as a garnishment, service of a lawsuit, or the start of foreclosure proceedings.
Even though they had a considerable amount of debt, they also had a considerable amount of income, and it quickly became clear that if they filed, it would be a Chapter 13 bankruptcy. While it’s it’s generally difficult to determine what kind of Chapter 13 plan payment might have when we meet at that first consultation, we can usually come up with a ballpark figure. Unfortunately, after running down this couple’s expenses, it looked like they would have to pay 100% of their unsecured creditors. When I told them that, their next question was why they would even bother filing bankruptcy.
Frankly, I had the same question. I understood that money was tight, but after going through their monthly expenses it seemed to me that they could shave quite a bit of them by cutting back on some luxury expenses and their food budget, which was about three times what I would expect a couple to have. I told them that I thought that they could probably pay off their unsecured creditors within two years if they just tightened their belts, and that I thought that would be a better option than being tied to the bankruptcy court for five years.
The conversation got me thinking about myself. While my wife and I struggle sometimes to stick to a household budget, we’re fairly disciplined and (usually) of the same mind when it comes to money. But when it comes to my diet and fitness, I need extra help. With all the fitness help out there, including personal trainers, it got me wondering if there were something like a personal financial coach to help when it comes to financial discipline.
It turns out there is. Doing a quick search, I got several results for “personal financial coach”. One website, www.moneymastery.com (This is by no means an endorsement.), provides a virtual coaching experience. However, there are also “real” financial coaches out there. Sometimes all you need to get through a rough patch is some extra direction. A personal financial coach may be a better solution than bankruptcy.
Bankruptcy is just one option to consider when trying to get your personal finances under control. If you have questions about whether it might be the right choice for you, we hope you’ll come in for a free, no-obligation consultation with an experienced bankruptcy lawyer. You can call 303.331.3403 to schedule an appointment or use our online scheduling system.