Washington DC Bankruptcy Court Attorney
In 2008, the year of the financial crisis, the number of personal bankruptcy filings — nationwide, not just in Maryland — increased a startling 32 percent. By 2012, the number had moved up to 1.3 million. One sign of the economic recovery is that fewer people are filing: At mid-year 2013, the number was back to the 2008 level of about 1.1 million.
There is a lesson in there, we think, and Suze Orman seems to agree. Consumers learned that bankruptcy is often the best option for people who are mired in debt, because it allows the consumer to face the situation head-on and, in a short time, to start over. Filing for personal bankruptcy, be it Chapter 7 liquidation or Chapter 13 repayment, does not carry the social stigma it once did.
In a recent “gripe” on CNBC, Orman responded to critics that said she was wrong to recommend bankruptcy. She said that, to her, the unwise choice would be to ignore the debt, the credit card bills, the mortgage payments and the car loan. Just sticking your head in the sand, she said, is not a solution.
Orman knows that the consumer may ignore the debt, but the creditor does not. If a credit card debt goes into default, the creditor can sue for payment. With that judgment in hand, the creditor can then garnish the consumer’s wages. Similarly, the consumer can lose his house to foreclosure if he ignores his mortgage or have his car repossessed if he stops making those loan payments.
It is not a good alternative, the financial guru seemed to be saying. The smart thing to do is to take the legal route and ask the courts for protection from all of this. By filing for bankruptcy, the consumer is telling his creditors that he really cannot afford to pay his bills — and the court agrees with him.
If you have questions about your debt load and whether you should file for bankruptcy, please consider consulting with a Washington DC Bankruptcy Court Attorney.
Source: CNBC, “The good thing about bankruptcy,” Sakina Spruell, Oct. 21, 2013