What to Avoid Prior to a Bankruptcy Filing

Interviewer: That is good to know. You’re saying that people seem to put themselves through this this trauma and all the ensuing problems for a long time. What are some of the mistakes you see people make that cause them to unnecessarily wait too long – any mistakes people make in this process?

Avoid Applying for High-Interest, Short-Term Relief Loans

Court: Yes. One of the most common things that I see is people go try to procure advance check loans or payday loans. These loans have insanely high interest rates. They’re just impossible to pay off.

If you’re in a situation where you need money, and you go to one of these loan places, it’s almost like the first step toward filing bankruptcy. I hate to put it so bleakly, but that is the most common mistake. People waste a lot of money.

I will have somebody finally come in and see me, and want to file Chapter 7 bankruptcy, and it turns out that they’ve paid maybe $500.00 to $1,500 in payday loans over the last few months, and could have used that money to file bankruptcy.

They could have filed a lot sooner, had a lot less stress, and could have not wasted all that money on interest rates. That’s one piece of advice.

Do Not Disregard Debt Collection Lawsuits

Another mistake to avoid, though it’s not as detrimental to your case, is ignoring debt collection lawsuits. If you get sued for a debt collection, and you don’t show up and they get a judgment against you, nothing typically will really happen to you.

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Then if they get a wage garnishment after that, that’s when you come in and see me. Once you file that wage garnishment stops, so it’s not a big deal in terms of financial costs, but over this time period you’ve been avoiding this debt collection suit, it’s been hanging over your head and causing you so much stress, which is really very physically draining.

I don’t know why people don’t come and see me earlier. We give free consultations, where you can come in and talk to me about your situation, and I might be able to help you out of a stressful situation like that.

Do Not Delay in Filing for Bankruptcy Because You Feel You Will Be Judged

Interviewer: I think people don’t come because it is frightening, and I think they will feel judged, even by the attorney. Wouldn’t you say there are probably a lot of attorneys out there that are usually mean about it when people come in, and not accommodating or nice when they talk to someone about bankruptcy?

The Right Attorney Will Treat You with Respect and Courtesy

Court: I hope not. I try to be nice. I am providing a service, and I don’t judge anybody that comes in. I have heard stories about mean attorneys. Sometimes attorneys are just mean in general.

I’ve heard clients I have say that they called another office and they were asked all these questions and interrogated, and they felt judged and they felt stigmatized.

I don’t know how common that is, but it does happen. I know that if you call me, you’re not going to feel that way, because we don’t treat people like that.

Interviewer: Yes. I’m sure you do a better job because you understand that there’s so much emotional abuse that someone’s probably had, that they are in a fragile emotional state.

By Court Koehler

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