Share

Bankruptcy Law Blog

Tuesday, July 24, 2018

Just Sweat It Out, And Other Bad Advice

Did you ever have a coach tell you to “walk it off” after you got hurt playing ball? Or an uncle that advised you to pull his finger? How about a friend that suggested you stick with a partner you really should have broken up with? Bad advice is everywhere, and following it can lead to disastrous results.

In our practice, we work with a lot of clients who have gotten bad financial advice. One of the worst pieces of advice our clients get is that they should do everything possible to avoid filing for bankruptcy. This leads people to skip meals and put off medical treatment, to take out new loans to pay off old debts, and to sell off everything they own to make ends meet. The folks that do these things often end up in a much worse position than they would be if they simply filed for bankruptcy.

A new study published in the Notre Dame Law Review backs this up. The authors, Pamela Foohey, Robert M. Lawless, Katherine M. Porter, and Deborah Thorne, studied what happened in 3,200 bankruptcy cases between 2013 and 2016. They found that people who tried to “sweat it out” and avoid filing for bankruptcy ended up in worse shape than those who filed sooner. The fresh start that bankruptcy promises really wasn’t available for some people that waited because their financial lives had deteriorated too much.

We’re not saying bankruptcy is the right choice for everyone because it does impact your ability to take out future loans and get certain jobs and housing, but avoiding it by ruining your life is a worse option. Skipping meals and putting off medical care can cause serious health problems. Taking on new debt in order to pay off old debt may mean you end up paying off debt that you are no longer on the hook for. And selling off everything you own to make ends meet is bad if the items you are selling are things you will need to spend more money to replace in the future.

People often think that it is not a big deal to sell stuff off because you will end up having to give it up anyway, but that is just not true. Filing for bankruptcy allows you to protect certain assets from your creditors. Many people who declare bankruptcy are able to keep their house, their car, and personal property like tools and jewelry. Keeping these things while getting rid of excess debt is what makes the bankruptcy process work so well. The assets you keep allow you to begin to rebuild your life without having to immediately start going into debt to secure necessities like housing and a means of transportation.

If you are in financial distress, it is never too soon to talk with an experienced bankruptcy attorney about what your options are. Don’t put your health or your financial future at risk just because someone advises you to toughen up and sweat it out.


Archived Posts

2018
2017
2016
2015


Bankruptcy Law News

Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



© 2018 Padgett & Robertson
4317 Downtowner Loop N., Mobile, AL 36609
| Phone: 251-342-0264

Personal Bankruptcy | The New Bankruptcy Law | Testimonials | About Our Firm | Bankruptcy | Client Resources | Getting Started

Facebook

Attorney Website Design by
Zola Creative


Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”