Interviewer: What are some common reasons people take a long time to decide to file for bankruptcy, hesitate or avoid doing it?
Marilyn Minger: I just don’t think people come to filing bankruptcy easily. It’s a serious step for most people, one that they’d rather not take. My experience is that people don’t want to file but do so ultimately when they need to. People don’t want to file because I think that there is a sense of failure, of shame. Many people see the filing of a bankruptcy as a personal failing. I don’t agree with that. It’s sort of my position that a debtor probably hasn’t gotten there by themselves. In many instances, the fact that our economy is structured sort of how it is and almost nobody has enough and you end up using the credit you have available to you and at some point, it can overtake you. You get hit with an unexpected bill, a medical bill or car repair, or you get laid off. As I said, I don’t see it as a personal failing. I try to help my clients understand that maybe it’s not a personal failing.
Other times, people feel they are going to make it, that ultimately they won’t need to file. Sometimes people come to me and I see that in the last 2 or 3 years, they have been trying so hard to stay afloat, but they’ve really been sort of circling the drain. They’re buying groceries with one credit card and paying off that credit card with another credit card and it just comes to a point where they can’t stay ahead, and they decide to find out about filing.
Bankruptcy is something that can have an almost immediate and often a tremendous impact on a person’s life. While I do understand the hesitancy, if it is something that would vastly improve your life, why not at least learn about it. Bankruptcy has been around a long time. Way before the United States was born, but Article 1, Section 8 of the United States Constitution does state that “. . . Congress shall have the Power . . . To establish . . . uniform Laws on the subject of Bankruptcies . . .” I just hope that if someone is in trouble they will not be ashamed to inquire as to whether a bankruptcy might help them.
The Adverse Impact of Filing Bankruptcy in the State of California
Interviewer: How serious is filing bankruptcy? Is it just a simple thing with guaranteed relief or can it be a real big deal?
Marilyn Minger: As always, whether or not you are eligible to file or should file, or it’s going to be a simple thing with a foregone conclusion, depends on your circumstances. The fact of having filed a bankruptcy stays on your credit report for 10 years. Once you file a chapter 7, you can’t file again for another 8 years. (You can file under another chapter, but are not eligible for a discharge.) When you file a chapter 13 with a five-year plan, you have the court in your business for five years. So whether filing is a good idea or not really depends on the person’s income, prospects, health in some cases, and what the person owes. For one person who owes $5,000, a bankruptcy should not even been considered. For someone else, for instance someone on a low fixed income, it may make sense to file, especially is they are being threatened with garnishments, repossessions, or levies.
We are a debt relief agency helping people file for bankruptcy relief under the Bankruptcy Code.