We probably all know someone who has filed for bankruptcy. We just may not know that we know. In Baton Rouge alone, there have been over 11,000 cases filed since 2013. Recent economic shifts are predicted to cause a new wave of filings. Attorney Morley Diment addresses some of the common concerns about filing and shares strategies for getting out from behind the eight ball.
When the walls of debt feel like they are closing in, it’s time to look for a lifeline. Of course, people do everything they can to avoid bankruptcy, but the reality is that life happens—for better or worse—and it is usually a sudden change in circumstances that lead people into debt, not just making bad financial decisions.
Diment knows how daunting it can be to navigate this alone. He still remembers his first debt case. “I thought I was going to meet someone who was in this position because she was a slacker who just didn’t pay her bills,” Diment says. “Instead, I found a woman who had lost her husband and son in a car accident then, in grief, couldn’t take care of her diabetes and ended up in a coma. The medical bills—along with the loss of her job—put her in this position.” Helping this person start fresh led him to practice bankruptcy law.
For many in our community, each day that passes is another day with more creditor phone calls, compounding interest and stacking debts. Diment & Associates recognizes that most clients are already in a low place when they call. “I understand that asking for help is embarrassing to most of my clients,” Diment says. “I want people to understand that they shouldn’t be embarrassed and that the earlier they contact me, the sooner they will find themselves in a more comfortable financial position.”
There’s no shame in bankruptcy: Simply put, it’s a legal process through which most debts are forgiven primarily based on one’s income, assets, and debt. There are many different kinds of bankruptcy, and different reasons to file: Restructure a bad car loan, catch up on a mortgage, clean up credit, get caught up on back tax debt/child support, or save a struggling business. It’s easy to see how so many people we know may have filed, and why there’s no reason to feel ashamed.
The first step is to consult an attorney. This is tricky terrain to navigate and the more information you have, the better your decisions will be. The team at Diment & Associates knows all the options and can help you get a fresh perspective on what you are really facing and how you can come out in the best position.
If I file bankruptcy I will lose my car?
Generally, no. That’s part of why there are lawyers like those at Diment & Associates – to make sure you don’t do it wrong and lose everything! In fact, filing for bankruptcy does not mean you have to sell everything and often, it can even improve your payments on the stuff you do keep or let you pay them off faster. Many bankruptcies aren’t even designed around canceling the debt. Instead, they focus on reducing interest rates and restructuring payments so you can afford to pay your debts and get back on your feet. Diment & Associates can help you plot a course to get out from under your ever-growing mountain of bills and on to a healthier financial future. Often, it’s a matter of restructuring debts and changing some spending habits. So, don’t be ashamed to ask for help – we all need it sometimes. Just be honest with your lawyer about all the details so they can help you find lasting solutions.
Filing bankruptcy ruins your credit and you can’t borrow money to buy a house. This is one of the most common concerns that Diment and his team have to address. Credit is important –its how we get cars, houses, and even education. Many people are under the impression that filing bankruptcy will ruin their opportunities in the future. The surprising truth is, while bankruptcy does have an immediate impact on credit score, it’s not what you’d expect. For many people, their credit score is actually improved at the conclusion of the bankruptcy because it removes many of the “derogatory” marks—the things that lower your score—from your credit report. Even more interesting is that for many, their access to credit is improved. “Most people don’t realize that mistakes from their past like evictions, repossessions, or accounts in collections are highly impactful on credit decisions. Having a bankruptcy, for many lenders, is a factor that impacts interest rates – not approvals. This is especially true after two years from your bankruptcy. Many people are further from realizing their dream of buying a house or a car than they thought – because of derogatory marks. Once they file bankruptcy, they end up closer to that goal than they were before. Diment & Associates is offering free consultations to 225 readers. Visit dimentfirm.com/225 or call 225.341.7433. to schedule.