Bankruptcy as A Learning Experience

The idea of filing for bankruptcy is difficult for many people to  swallow. Among other things, the shame of letting themselves get into  financial hardship can keep people from taking that action. While the  process can be difficult to commence, the reality is there are times  when it is necessary to simply regroup and start over.


If  you are experiencing financial hardship, you may find that the stress  of dealing with your situation makes each day a little harder to get  through. When you file for bankruptcy under Chapter 7 qualifying debt will be discharged and  you will begin again with a clean slate. While it takes a little time  to rebuild your credit following a bankruptcy filing if you are filing  for bankruptcy your credit was already suffering.


There  are certain things a filer can expect once you file for Chapter 7  bankruptcy. One of the first is an automatic stay. This means as soon as  the filing process has begun, creditors are forbidden from trying to  collect on unsecured debts. Secured debts, like car loans or mortgages,  typically aren’t included in bankruptcies, and while most won’t be  forced to sell their homes, they are still vulnerable to possible  foreclosure. Some debts, such as tax debts, judgments, and child support  obligations remain intact as well.

As  is the case with many difficult things in life, in addition to resulting  in a fresh start filing for bankruptcy is also a learning opportunity.  It is possible for those who have gone through it to take the lessons  they learned and apply them to the future. If you feel like your debt is  swallowing you, consulting with a bankruptcy attorney may help you  figure out if filing bankruptcy is the right choice for you.


Those  facing serious financial pressures don’t often understand the unhealthy  consequences of their situation. Heavy debt load causes stress and  depression which is a leading cause of stroke and heart attacks. Clients  have told me that they had a fear of answering the phone or even  opening mail.

A heavy debt load causes  undesirable choices: pay the rent or mortgage or pay the car note or  skip needed medicine. Then there is the fear of Wage or Bank  Garnishments that cause instant chaos.

Heavy  debt loads also cause problems in other areas of life. The pressure can  hurt job performance, create a disincentive to finding employment, and  cause problems in the marriage: even Divorce.


After decades of helping thousands of client work through the bankruptcy system either by filing a Chapter 7 or a Chapter 13 we can report very positive and healthy outcomes:

  1. Can sleep better at night
  2. Rebuilds credit; yes credit scores rises after a bankruptcy
  3. Relieves stress and depression
  4. Studies find bankruptcy relief adds 1.2 years to one’s life span
  5. Increases the amount of money each in a month in their pocket
  6. Decreases foreclosures rates by over 19%
  7. Can work better and can concentrate on their jobs; thus better employment security and better possibilities for promotions
  8. After the bankruptcy, many clients are able to buy a house
  9. After the bankruptcy, many clients are buying decent affordable cars

These  positive results were recently confirmed by a study based on data of  over 500,000 Chapter 13 cases. Chapter 13 cases that were confirmed show  increased annual earnings of over $5,500 or about $105 per week.

The  paper concludes bankruptcy removes a disincentive to work by removing  the fear of Wage Garnishments. The paper also showed that people live  longer after a successful bankruptcy.

The  lawyers and staff at Robert J. Adams & Associates are proud to have  helped thousands regain their lives by filing a bankruptcy. If you’re  going through financial pressures, give us a call and see what we can do  for you.

Certain data was based on “The Effects of BAPSCPA (the current bankruptcy law) on Credit Card Industry Profits and Prices.



There  are many uncertainties in life. Even when things seem to be going well,  it doesn’t take much for it all to change, particularly where finances  are concerned. The inability to pay bills could lead to a great sense of  anxiety and make it difficult to face each day. Though it may not seem  like it, you do have options available to address the issue. Depending  on your circumstances bankruptcy may be a route to relief not only in  the long term, but the short term as well.


Bankruptcy  is a process made available by the federal government to help people  who find themselves experiencing financial difficulty, move on with  life. Your specific situation will determine which chapter you file  under. While Chapter 7 results in the discharge of all qualifying debt,  Chapter 13 involves the creation of a repayment plan. In either  situation, the outcome of a successful bankruptcy is that you will be  set on a path for a positive financial future.


It  is important to recognize that there are benefits to filing for  bankruptcy that kick in virtually immediately, as well. Upon filing, an  automatic stay takes effect. This stay does several things.

First,  it stops the harassing phone calls you may be receiving from creditors  seeking to recoup money owed. This alone can have a huge impact on the  quality of your life.

Second, it stops entities from trying to take things from you. For example, wage garnishments will be stopped.

Last,  it can keep you from having to move. Whether you are facing eviction or  foreclosure, the automatic stay will halt those proceedings.


You  don’t have face this process on your own. A bankruptcy lawyer can help  you determine the best approach and guide you through the process.


A  five-year study of the 2005 Bankruptcy Reform Act conducted by The  Institute For Financial Literacy paints a picture of who files  bankruptcy, and why.

  • Women file bankruptcy more than men,  by about 52 to 48 percent, but the gap narrows with an increasing  percentage of men filing each year.
  • The older you are the  more likely you will file bankruptcy. Almost 56 percent of filers were  between the ages of 35 and 54. More people older than 54 file bankruptcy  than people younger than 35.
  • Almost 72 percent are  Caucasian; over 11 percent are African American and Hispanics make up  the third-highest filing ethnicity with almost 9 percent.
  • While  over 36 percent of bankruptcy filers attained a High School diploma or  GED, the number with College degrees and Graduate Level degrees steadily  increased over the years. In fact, college-level attendees and higher  make up over 57 percent of filers, while less than 6 percent of filers  did not attain a High School diploma or GED.
  • People  earning less than $20,000 annually make up the bulk of filers, at 38  percent, but that number is declining. The next higher group, at 21  percent, is the $20,000-30,000 income level, also a declining number.  Likewise, the third-highest filing group earned $30,000-$40,000 and also  shows a decreasing percent of overall filers. Remarkably, the highest  income category of those making over $60,000 almost doubled to 9 percent  over the five years studied.
  • Almost 70 percent were  employed and less than 17 percent were unemployed, with the rest out of  the job market as being retired, homemakers or students.
  • Over 64 percent were married and less than 15 percent of unmarried filers were divorced.

Just  what causes people to file bankruptcy? Frequently it’s due to job loss,  medical bills or divorce. This study asked debtors to identify factors  that affected their situation and most people chose being overextended  on credit, a loss of income, unexpected expenses, job loss, illness and  divorce, in that declining order.

Who files bankruptcy? Look like any average American from just about any demographic group.


Same-gender  couples now have the same rights, privileges and responsibilities as  all other married couples in the Bankruptcy courts. Illinois,  fortunately, allows the same-sex or same-gender marriage.


Legally married same-gender couples can file a joint Chapter 7 or  Chapter 13 case. If you are legally married but live in a state that  does not allow or recognize same-sex marriage, you can still file a  joint case. For example, the individuals are married in Illinois but now  live in Alabama-the couple can file a joint bankruptcy case.

Other  than what is mentioned above all matters of pre-Marriage planning,  Marriage and Divorce involving Bankruptcy are the same as discussed in  our other blogs, as follows:



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