A Fresh Start to a Bright Financial Future

While working on the electric light bulb Thomas Edison was asked by a reporter, “How does it feel to have failed seven hundred times?”

Edison replied, “I have not failed seven hundred times. I have not failed once. I have succeeded in proving those seven hundred ways will not work. When I have eliminated the ways that will not work, I will find the way that will work.”

As businessman Harvey Mackay says, “Failure is an attitude, not an outcome.”
When a person makes a decision to file bankruptcy, the decision is largely based on a recognition that something hasn’t worked and changes need to be made. Fortunately, the bankruptcy laws provide the tools to make those financial changes. Through bankruptcy you can have a fresh start at a new financial life without the burdens of overwhelming debt. The Supreme Court has stated many times that “[t]he principal purpose of the Bankruptcy Code is to grant a ‘fresh start’ to the honest but unfortunate debtor.” Marrama v. Citizens Bank of Massachusetts.

Does the fresh start work? Yes! A study by the Executive Office of the United States Trustee found that “[m]ost chapter 7 debtors have a substantial negative net worth at filing, but have a small positive net worth after discharge.” Bankruptcy works to put you on the right financial track with the hope for a better tomorrow.

A Chapter 7 bankruptcy releases the debtor from personal liability for certain types of debts. Unsecured debts (usually the most burdensome type like high interest credit card debt and medical bills) are discharged by the bankruptcy case without payment. The discharge is a court-ordered injunction that prohibits your creditors from collecting from you in the future. The creditor can no longer call, write, or take any collection action against you.

If you are ready for a fresh start, speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help. An experienced bankruptcy attorney can explain your legal options and help you find a way that works for a bright financial future.

Options When Sued Over Credit Card Debt

Receiving a lawsuit summons is a very scary thing. Whether served by a law enforcement officer, private process server, or received by mail, the idea of facing a judge and a skilled attorney is very intimidating. Fortunately, your legal options are very clear: (1) do nothing; (2) defend the law suit; (3) negotiate a settlement; or (4) file a bankruptcy.

The first option, do nothing, is obviously a bad choice. The court will enter a judgment against you and your wages may be garnished or property seized (e.g. the contents of a bank account). Even if the debt is ultimately paid or discharged in bankruptcy, the judgment will remain on your credit report for at least seven (7) years.

The second and third options, defend the law suit and/or negotiate a settlement, are very difficult to accomplish. Once the creditor has hired an attorney and filed a lawsuit there is very little that a person or non-attorney debt settlement firm can do to “settle” the debt. The collection attorney will use the legal processes to its advantage and knows that an unrepresented person is generally unable to successfully defend the lawsuit. Even the lay-person-friendly small claims process can be filled with pitfalls. Additionally, the cost of hiring an attorney and defending a lawsuit can get very expensive and the collection attorney is betting that you will not pay $3,000 to an attorney to contest a $3,000 credit card debt. The collection attorney believes (rightly) that it has the advantage and will ultimately obtain a legally enforceable judgment against you. Depending on your cardholder agreement, you may be liable for the principal, interest, penalties, court fees, and attorney fees. Why would they settle for less?

The final option, bankruptcy, is a very powerful tool. Bankruptcy immediately stops the lawsuit and prevents the entry of a judgment. Once the individual’s obligation to pay the debt is discharged by the bankruptcy court, the lawsuit must be dismissed and cannot be refilled. Filing bankruptcy prevents almost all future lawsuits from being filed and can discharge the obligation to pay most court judgments.

If you have been sued by a credit card company, discuss your situation with an experienced bankruptcy attorney. There are many options for dealing with your financial difficulty, and a bankruptcy attorney can help you select the best course of action for you and your family.