My Response To Those Who Say You Should Never File Bankruptcy
When it comes to the subject of filing bankruptcy, there are a lot of “experts” who may say that you should never file under any circumstances. Any person who says that you should never file under any circumstances has either no idea what they are talking about or they are trying to sell you something.
Dave Ramsey will try to sell you his financial course and talk you out of filing because when he filed for bankruptcy, it was extremely painful. When Dave Ramsey filed bankruptcy he lost “everything he owned.” I believe that his experience with bankruptcy is extremely unusual because most people who file don’t lose any property unless they owe money on it and can’t afford to make the payments.
Dave Ramsey states,
“As a result of my experience, I don’t like bankruptcy. Do I hate it? Yes. I always look for another solution. Do I tell my listeners never to file bankruptcy? No. I have never done that. Does my team send clients to bankruptcy attorneys for advice in this area of the law? Of course. We treat it the same way we treat divorce. We hate that, too, and we look for another solution. But if that becomes the only way out, we want them to get the best help possible and move on to a better life when the process is complete.” (click here to read the full statement).
I don’t think Dave Ramsey is a bad guy but I don’t believe bankruptcy is the miserable experience that he describes. The vast majority of my clients will tell me that they wished that they had filed sooner. Dave has a great course (my Chapter 7 clients use his after bankruptcy financial management course) but there are some circumstances where bankruptcy is the only reasonable option.
In Georgia, a creditor can garnish up to 25 % of your net income. A creditor can repossess your car and a mortgage company can foreclose on your house in just over 30 days. The bottom line is that sometimes things happen that are beyond your control and sometimes you need to take action just so that you can survive.
Many Georgia consumers receive advertisements in the mail from “Debt Negotiators” who will wave their magic wand and make all of your debts go away in exchange for a small monthly payment. Others will receive letters from some company that will guarantee that you get a loan modification if you will just mail them $2,000.00. The reason it sounds too good to be true is because it is too good to be true. Don’t give your money to some company without checking them out on www.ripoffreport.com to see how many people have had their money stolen.
I agree that bankruptcy is a last resort but there are many situations where there is no other way. Most people wait too long before going to see a bankruptcy attorney because they have heard some myth that the attorney will pressure them into filing when they don’t really need to file.
As a Georgia bankruptcy attorney, I have never and will never put a person into a bankruptcy case unless I believe it is truly in their best interest. Being honest with my clients is not only the right thing to do but its in my best business interests as well. My bankruptcy law firm has been built on referrals from satisfied clients. At least half of the clients that come into my office do so because someone referred them us.
Let me give you a common example of where I will most likely advise someone that they should not file. Many clients come to see me because they have some house that they want to surrender back to the bank. Just this past week, I was talking to a client from Dalton, Georgia who was in this situation. In her case, it is not in the best interest of this Dalton client to file bankruptcy. The reason is that after the bank forecloses, they almost never go after the Dalton consumer for any deficiency in Georgia unless there is a second mortgage. You should see the look on the faces of these people when I tell them the truth that it is not in their best interest to file.
These people usually say, “Thank you so much for your honesty. Now, how much do I owe you?”
My response is always the same in these situations. I say, “You don’t owe me anything for a free consultation but if you know anyone you think might need my services, please send them my way.”