“Just Don’t Pay” as an Alternative to Bankruptcy

Posted by Robert Weed / in Alternatives to bankruptcy, Blog, Weekly Posts /

Bankruptcy Alternative: Just Don’t Pay

Some people want or need an alternative to Chapter 7 bankruptcy. 

Meet Henry Hudson and his wife Beth. They came to see me several years ago. Their alternative to bankruptcy was a two part plan: just don’t pay, and “call my lawyer.” Here’s why.

Henry and Beth were elderly, he was retired, she was working a little. They had credit cards they couldn’t pay, about $40,000.

They could file Chapter 7 bankruptcy and clear those debts. But they didn’t want to. They owned an investment that had lots of sentimental value, and if they filed Chapter 7 bankruptcy, the court would sell it. The creditors would only get 10 cents on the dollar or less, if it was sold, but the emotional loss to the Hudsons was more than they were willing.

“Call my lawyer!”

So I told them, just don’t pay. (They were already about five months behind when they came to see me.)  And start taking the calls!  When they call, tell them “call my lawyer!” We’ll see if that get’s them to leave you alone.

Henry and Beth paid me $700 to rent my fierce reputation, plus $100 a month. We met in person every three or four months. Years went by. I told them, if the bill collectors leave you alone too long, they are too late.  That’s called the statute of limitations.

How Long is the Statute of Limitations?

Original creditors, like the credit card companies, have five years to take you to court. If they wait longer than that, they are too late. (That’s in Virginia; other states can be more or less.) For debt buyers, people like LVNV, Midland, Portfolio, it’s probably only three years, arguably two.  (The three years was based on Opinion of the Attorney General 10-028.  The current Virginia Attorney General appears to have deleted it.)

Finally, years later…

Finally, years later, Henry got court papers from one the biggest credit cards, around $8,000.  We had met just two months before and I told them I thought time had run out and everybody was SOL (Statute of Limitations.) Now there’s court papers.

We File Chapter 13

Chapter 13 is a payment plan through the bankruptcy court.  In Chapter 13, you don’t put your property at risk (unless you want to sell it) because you are paying your debts. Henry and Beth file a plan to pay their debts in full.

Pay in full? Yes, but not $40,000 that would have been payment in full when we first talked. Pay in full all the debts that were not SOL.  Turned out only one $700 recent credit card was not too old under the Statute of Limitations.  Including the one that had filed the warrant in debt. 

So that $700 card got paid in full; and the other debts were just gone.

This Doesn’t Always Work

We were helped that Henry and Beth did NOT owe money to Discover. Discover is very quick to sue. Their cars were paid for. And they were renters, not home owners. That means their credit report did NOT show any debts actually getting paid.

It’s My Job to Suggest the Best Plan for You

As a lawyer, I’m a fiduciary. I’m required by law and legal ethics to give you the best advice I have. Even though I’m a bankruptcy lawyer, sometimes a non-bankruptcy solution works best. And when it does, I tell you.

For most people, bankruptcy works.

But when “just don’t pay” will work better, I’ll tell you so.

PS  More on the statute of limitations

The Washington Post just had this interesting article, about how debt collectors can try to get around the statute of limitaitons.

Filing Bankruptcy and Keeping Your Car with Your Credit Union

Posted by Robert Weed / in Weekly Posts /

The Small Print Says Your Credit Union Can Repossess Your Car If You Are Late on Your Credit Cards.

When you get a car loan from a credit union, you sign in small print that they can repossess your car if you don’t pay your credit cards.  (I have never seen a bank do this; I don’t know why they don’t.)  That would apply to a credit card you already had with the credit union, or one you get later.  This is usually called cross-collateralization. 

Credit Unions really do it, too.  If you get maybe three months behind on your credit card payments with your credit union, they will apply your car loan payments to the credit card, and send the repo man to your house, to pick up the car.

How Does Bankruptcy Change That?

The basic rule of law is that secured debts–debts attached to something like your car–pass through the bankruptcy unaffected.  So the deal may still be the same.  

In my experience, once you file for bankruptcy, the credit unions will usually allow you to just pay the car loan.  (Since the credit card is discharged, applying the car payment to the credit card would violate the bankruptcy discharge.)  But once the car loan is paid for, they won’t send you the title.  That’s because the credit card is still attached to the car and the credit card has not been paid off. So, you never really have a paid for car.

If they want to be mean about it, the credit unions can just pick up the car.  Because under the 2005 bankruptcy law, they are allowed to pick up your car when you file bankruptcy, even if you are current.  (I explain that, here.) I’ve seen Alaska Credit Union and Suncoast Credit Union do that.  (There are probably others that do. There are 7000 different credit unions; I barely know seven.)

The Credit Unions around here will give you a chance to reaffirm the loan.  That means you make a new, after-bankruptcy promise to pay, and they agree to accept it.  When that new promise is paid off, they should send you the title.  (They “should” send you the title. The reaffirmation form, set by law, says nothing about that. I got into a fight with Apple Federal Credit Union on that, once.  Apple, an outfit we like, then agreed to send the title.)

Ordinarily, I do not like to reaffirm car loans, as I explain here.  But you do get something when you reaffirm with the credit union. You get the title when the reaffirmed loan is paid off. So if you want to, I’ll sign your reaffirmation. (I charge $100 for doing the very annoying form.)

Do They Ever Negotiate?

Recently, I had a client who had two car loans with PenFed Credit Union. On one, he was about break even; on the other, he owed $11,000 and the car was only worth $8,000. He told me to tell PenFed, “I won’t reaffirm for more than the car is worth.” So, I crossed out his agreement to pay back $11,000, wrote in $8000, and sent it back to them.  They told me, “We’re not negotiating on the loan; we’re coming to get the car.” “Don’t do that,” my client said, “I’ll sign.”

As your lawyer, I have to sign on your reaffirmation, that I helped you “negotiate” the reaffirmation. I’ve never actually negotiated any change from what the credit unions demanded. They will drop the credit card cross-collateralization; beyond that, they won’t budge.

 

Can they put a lien on a house I bought after the bankruptcy?

Posted by Robert Weed / in Virginia Bankruptcy / 9 comments

Did you put off filing bankruptcy until after somebody got a judgment against you?

Pre-bankruptcy judgments are liens on property you own before the bankruptcy.  (Sometimes they can be removed;  sometimes they can’t.)   But they cannot put a lien on a house you buy after the bankruptcy.

At least, not legally.

After Bankruptcy: What If I Win the Lottery

Posted by Robert Weed / in Virginia Bankruptcy / 61 comments

People often ask me, what happens after bankruptcy if I . . .

Get a big raise…

Start a business…

Get a big tax refund in future years…

Become a reality star…

Win the lottery…

How does that affect my bankruptcy?

Do I need to file business bankruptcy?

Posted by Robert Weed / in Virginia Bankruptcy / 2 comments

Do I need to file business bankruptcy?

A lot of people who think they need to file business bankruptcy really don’t.   They often need to do a personal bankruptcy, instead.  And they need to just dissolve their LLC or S corporation.  Does this apply to you?

You probably don’t like to hear from me that you need to file a personal bankruptcy.  After all, Donald Trump has been through three or four business bankruptcies and NEVER filed a personal bankruptcy.  Why?

Bankruptcy and bank statements

Posted by Robert Weed / in General Information About Bankruptcy Law / 43 comments

Bankruptcy and bank statements

Planning to file bankruptcy?  You will need to round up bank statements.  You’ll need them at the beginning of the bankruptcy process; and you’ll need them again for your bankruptcy hearing.

(Here are specific instructions on what bank statements you need for your bankruptcy hearing in Alexandria, Virginia.)

Since you need to tell the bankruptcy court about all your accounts when you file your bankruptcy papers, you want to talk them over with your lawyer early–in time to identify and fix any problems.

Does that include the account with only five dollars that you never use any more?  Yes.

Does that include your mother’s account that she “just put your name on in case of emergency”?  Yes.

Does that include the account where only your wife’s paycheck goes, but is in both names?  Yes.

Does this includes credit unions, too?  Yes.

Does it includes accounts you have with your minor children?  Yes.  And also college savings plans you have for them.

Does it includes money markets?  And investment, brokerage accounts?  Yes and yes.  And Bitcoins; and Paypal accounts. And accounts you have overseas.

More than just banks, it includes every place you have money.

When you first talk to your lawyer, you need to talk about all those accounts.  So bring bank statements–and other accounts–with you.

Is your mother’s $200,000 life savings–in the account you are on “for emergencies”–going to be a problem?  You want to talk that over when you first meet with your lawyer.  Do not wait and bring it up when you are signing the final draft of your bankruptcy papers.

The same thing with your wife’s account that’s “in both names.”

When you bring in the bank statements, then you are not guessing.  You and your lawyer can see whether, and how, your name is listed on each account.  And how much money goes through it every month.

Both of those can be important to getting your bankruptcy approved–without having the bankruptcy trustee take some of your money.  (Or worse, take some money that’s not yours–that belongs to someone else in the family.)

Getting through bankruptcy, without losing any money, may take some planning.  Your lawyer may have your wife change her direct deposit to a different account–one only in her name.  Your lawyer may want mom to take all the money out and put it in a different account.  Maybe the lawyer will just want proof of where mom got all that money.

Besides the bankruptcy trustee maybe grabbing those accounts, some of your creditors might try to get to them.   Your lawyer will want to compare your accounts with your creditors–and may suggest you change banks for that reason.

All that takes time and planning–so make sure you bring in all those bank and other account statements at the beginning.

Toward the end of the bankruptcy process, you are required to show those statements to your bankruptcy trustee.  What statements?  Every one that your name is on.

Those will mostly be the same accounts that you went over with your lawyer at the beginning, but maybe with some changes.  If you have accounts that you don’t use, your lawyer may have told you to close them.  If your accounts were in a bank where they weren’t safe, you may have new accounts now.

The bankruptcy trustee is looking at your account statements for two reasons.  First, because the law (Bankruptcy Rule 4002) requires it.  Second, to see if you had too much money on the day you filed your bankruptcy case.  (“Too much money” meaning enough that the bankruptcy trustee can grab some of it.)

Sometimes getting those bank statements is a problem, if you wait until after your case is filed.  Some banks, and especially some credit unions, stop sending statements when they get notice of the bankruptcy.  And they may cut off your internet access, too.

(Stopping the statements and cutting off internet access is most likely a problem if you owe money to that bank.  They don’t want to be violating the bankruptcy law by trying to collect your old debts, so they just stop sending you ANYTHING.)

I recommend a two step process.  First, when you come in for your court preparation appointment, bring your most recent bank statements.  Those may be a few days, or even a few weeks old.

Then, the day after your bankruptcy case is filed and your papers go down to the court, get an internet print out from the end date of the last statement on through to the day after your bankruptcy is filed.  Take care of that right away–in case the banks and credit unions cut off your internet access when they get notice of the bankruptcy.

Taking care of bank statements–and all account statements–both early and late in the bankruptcy process, is a key to have your bankruptcy case go smoothly.

 

Bankruptcy and bank statements: Update–there’s now a charge

Filed a bankruptcy case for some folks last week who had SIXTEEN bank accounts. Half of them they hadn’t used in years, but kept open because it was too much trouble to close them. Now they are trying to get account statements showing the date the bankruptcy was filed, and the bank is not cooperating.

Duh–if you’ve left a three dollar balance on a bank account for four years, the bank is NOT going to consider you a good customer. And if you thought it was too much trouble to close those accounts before you file bankruptcy, see how much trouble it is to get that bank statement balance now that you have filed bankruptcy.

You need to do yourself–and the bank–and the bankruptcy court a favor and close accounts you are not actively using.

So, I’m starting to charge. I’m charging for the extra paperwork we have when people have multiple, unnecessary bank accounts.

For a single person, your first THREE bank accounts are free. If you have more than THREE! accounts on the day you file bankruptcy, there’s a $50.00 charge.

For a married couple the first five are FREE. After five, there’s a fifty dollar charge.

(You also get one more for free for each child you have.)

Each bank account you have means a lot of work–for you, for me, for the bankruptcy trustee. And the more you have, the harder it is–for you, me. and the bankruptcy trustee–to make sure they are all covered. So, close ’em.

If it’s too much trouble to close them, I’m charging for the extra paperwork on my end. You will still have to do extra work to get each statement balance. And if you get sent home from your hearing because the trustee thinks you missed one statement, you were warned.

So, close those accounts you’re not using.

Bankruptcy means test: Watch out for January 2012!

Posted by Robert Weed / in The 2005 Bankruptcy Law / 8 comments

Your bankruptcy means test may be too high if you file your bankruptcy case in January 2012.

People with bi-weekly paychecks get 26 paychecks a year.  Usually you will have 13 paychecks in the six months look-back period of the bankruptcy means test.    But some people will have 14 paychecks instead of 13 for the six months of July – December 2011.  If your first September paycheck was dated September 9, you will be one of those people.  (It’s no problem if you got paid on September 2.)

Most people on bi-weekly pay look forward to those months with three checks.  They usually come every six months.  But this year, if you got paid September 9, both July and December will be three check months.  (Your next three check month will be June 2012.)  But in bankruptcy, good is bad.  That 14th paycheck could force you into a five year Chapter 13 bankruptcy repayment plan, because your income could be just a little too high.)

Here’s one example:

Take a single parent supporting one child in Virginia making exactly $30.00 a hour, no overtime, renting, one paid for car, no medical issues, no child care.    That family is means test eligible for a Chapter 7 bankruptcy, if the parent files in October 2011 or November 2011, or December 2011, or February 2012, or March 2012.  But in January 2012:  not eligible. Mandatory five year Chapter 13 payment plan.

This problem can be fixed with proper planning.  I had to change the bankruptcy filing date for a client I met yesterday, to avoid that problem.  Otherwise, it would cost him $300 per month for 60 months–an $18,000 mistake.

The 2005 Bankruptcy Reform has a lot of tricks and traps.  This is one of them.

Bankruptcy and security clearance, and defense cutbacks.

Posted by Robert Weed / in General Information About Bankruptcy Law / 19 comments

Defense cutbacks are now certain.  (At least as certain as anything is in this world.)

Lots of people whose jobs seem safe now will soon be out of work.

Will you lose your job and get behind on your debts?  Please don’t jeopardize your security clearance–and your future.  Please don’t put off filing bankruptcy.

That’s the lesson of the thousand people with security clearances I’ve helped. And the lesson of the half dozen who lost their security clearances because they filed bankruptcy too late.

Bankruptcy and security clearance

Some people think bankruptcy destroys your security clearance.  That is false.  The worst thing for your security clearance is “irresponsibility.”

It is irresponsible to get into debt you can’t pay.

But if you have debt you can’t pay, the responsible thing to do is clean it up.  The irresponsible thing is to ignore it.   The irresponsible thing is to drag out the problem.

This is not just me talking.  The legal office of the Air Force Academy says the same thing.  (Thanks to the Air Force Academy for putting this valuable information in writing.  So much in the security clearance world is not for publication.)

“Not filing for bankruptcy may make you more of a security risk due to the size of your outstanding debts. By the same token, using a government-approved means of dealing with your debts may actually be viewed as an indication of financial responsibility. Eliminating your debts through bankruptcy may make you less of a security risk.”

Here’s a post on security clearances, from the US Army Ft Meade.  They say it’s a “myth” that filing bankruptcy means you lose your clearance.  They say, and I agree, you need to be ready to explain how and why you got into trouble.

Let me make it clear.  Bankruptcy is not a good thing.  Paying everything on time is a good thing.  But bankruptcy is better than not paying. It is better than ignoring the problem.

I’ve helped a thousand people with clearances; and I know a handful who have lost their clearances.  Nearly all lost clearances for an obvious reason–they did not come to see me in time.  They did nothing until they were told they were in clearance trouble for financial irresponsibility.  Then they checked around.   Then they found out they should have filed bankruptcy when they first got into trouble.

Too late.  They needed to show responsibility by facing the problem when they first got into the financial problem.   Waiting until you get into a clearance problem is waiting too long.

Don’t wait too long.

Bankruptcy and Security Clearance articles by two other lawyers

(Russ DeMott, a bankruptcy lawyer in Charleston, SC, has an excellent article on bankruptcy and security clearances.   His experience is pretty much the same as mine.  Except that he’s mostly talking about active duty military people.  And my experience is mainly with civilians:  DoD, CIA and Homeland Security employees, and employees of contractors in the defense, intelligence and security fields.)

(Here’s a more recent article by Brett Weiss, a bankruptcy lawyer in Maryland, who says pretty much what I am saying here about bankruptcy and security clearances.    He also emphasizes the importance of self reporting to your clearance officer when you get into financial trouble, and before you file the bankruptcy.)

Bankruptcy and Security Clearance Update–December 2014

Yesterday, a Federal agent came to talk to me.  A young lawyer who had worked for me for a couple years had taken a Federal job.  she needed a clearance.

So the Federal agent was doing an investigation.

No surprise there.

Here’s the headline.  The Federal agent, the guy doing the clearance investigation, had filed bankruptcy with me back in 2001.  He didn’t just have a clearance himself–he was doing clearance investigation.  (And back in 2001 he was working for the same agency he was working for now.)

Proof of what I tell people. If you get into financial trouble, you need to clean it up.  And if you can’t clean it up any other way, then file bankruptcy.  The people who lose their clearances are the people who just let the problem get worse.  Be responsible, take control, fix the problem.  File bankruptcy.   (And don’t forget to self-report.)

Bankruptcy and Security Clearance Update–December 2015

Just filed Chapter 7 bankruptcy for Don and Donna.  Both disabled veterans, both battling multiple medical issues, and starting a new family.

They first came to see me in February 2014.  they were in trouble because they downed a house in an area with defense cutbacks that they couldn’t sell.   Told them they needed to file bankruptcy to fix that problem.

Don lost his nerve and they didn’t come back until October 2015.  Don’s clearance had been suspended, along with his job, for financial irresponsibility–and failure to self report.  That’s exactly what I told him would happen, if he did NOT file bankruptcy.  If he was a contract, he’d just be out of luck–and out of a career.  Because he’s a Federal employee, he has more protections.  I’m HOPING that his clearance will be saved on appeal, now that he has, finally, taken care of the problem.

 

Bankruptcy and Security Clearance Update–December 2017

December 28, 2017

Chapter 13 bankruptcy and your credit report

Posted by Robert Weed / in Chapter 13 Bankruptcy / 130 comments

I don’t like Chapter 13 bankruptcy.  One reason is chapter 13 is much worse on your credit.

Since you are paying your creditors, at least a little, in Chapter 13, that’s unfair. Five years after filing a Chapter 7 bankruptcy, people can have great credit. (Assuming life hasn’t knocked you down again.) You can get a car loan at as good a good rate. You could already be a year or two in your new home.

After five years of Chapter 13 bankruptcy, your credit will still stink. Why is that? About half the companies you owe money to, will have given you five more years of bad credit.

They are not allowed to do that.  They do it anyway.

For years, the credit bureaus had no rules on how chapter 13 should show on your credit. But they corrected that, finally, in December 2009. (That was eighteen months ago.)

In December 2009 the credit bureaus told the credit card companies, and other creditors, what to do when a Chapter 13 plan is approved.

They said that once the Chapter 13 plan is confirmed, creditors can’t keep reporting you as past due. And they have to reduce the balance on your credit report down to what the judge said you had to pay.

Why did the credit bureaus finally set rules on this? Maybe because back to 2008, Wisconsin Bankruptcy Judge Susan Kelley said the same thing, in a case brought by bankruptcy lawyer Christine Wolk.

So far, even with a court decision in 2008 and new credit reporting rules in 2009, about half the creditor are not doing what they are supposed to do.

I saw that one the credit report of one of my clients, Jane. (Not her real name.) Jane had to file a chapter 13 to catch up the mortgage on her mom’s home. (Mom lives in a small place that Jane financed for her. Mom doesn’t have much retirement, so Jane has to help out. when things at her job got slow, Jane got behind, and she needed Chapter 13 to give her time to catch up.)

Two years into her five year Chapter 13 plan, Jane’s car caught on fire. Scary. She still needed to get to work, so she asked the bankruptcy Judge for permission to borrow money to buy a used car. The Judge was glad to give her permission to borrow $5000 to buy a used car. But when she went to get a car, 25% interest was the best she could do. No choice, she paid it.

What was the problem with her credit report? Apple Federal Credit Union, Capital One, and Capital One Auto had reported her as late every month since she filed Chapter 13 bankruptcy in June 2009. When she bought a car in May 2011, she had two years of being late every month with them.

Chase, HSBC and Dell stopped reporting in June 2009–the same way they would have in a Chapter 7. So her last reported late payment on those three accounts was two years old when she went to buy the car.

Jane had done what she should do to get back to good credit. She had three new, current credit cards in good standing–paid in full every month, never late. Capital One (ironically), First Premier, and HSBC.

If all Jane had was three current credit cards, two years after a chapter 7 bankruptcy, she’d have probably been below 10%. That difference, on a $5000 car loan, is $1885.

I’m fighting in court to get her that $1885 back from those three companies.

Are you in Chapter 13 now? Don’t wait until your bankruptcy case is over to do something about your credit report.

Call each of the big three credit bureaus and order your report. My instructions on how to do that are here.

Then, talk to your bankruptcy lawyer about how to fight this issue in your state. You can dispute it with the credit bureaus under the Fair Credit Reporting Act, and then sue the bureaus and the creditors if they don’t fix it.  (Do you need a credit report lawyer in your state?  You can find one at NACA.)

Or you can bring it in front of your bankruptcy judge.  Ask the judge to follow what Judge Kelley said. (Some bankruptcy judges aren’t very friendly to consumers, so make sure your lawyer is comfortable with your judge.)

If I’m your lawyer, email the credit reports to my Chapter 13 credit report paralegal, [email protected]  Brenda will work with you on the steps we take to get it fixed.

It’s three years after Judge Kelley’s decision; eighteen months after the new rules set by the credit bureaus. It’s time to get those companies to do what they are supposed to do.

PS:  I’ve fought this and lost

I’ve given up on this issue. I fought it with two different judges here in Northern Virginia and I’m 0 for 2. I hope someone will have better luck somewhere and when they do, I’ll see if I can try again.   

Before bankruptcy: Can I go to jail if I ignore this summons?

Posted by Robert Weed / in Before Bankruptcy, warrant in debt / 35 comments

Around 100,000 people a year get arrested because they owe unpaid bills and ignore a court paper.  Does this happen in Virginia.  Yes!

I’m a Virginia bankruptcy lawyer.  About one-third of my clients don’t come to see me until the sheriff brings court papers to their door.

Then it’s panic time!  Here are questions people ask.

“What do these papers mean?”

“Is it too late to file bankruptcy? ”

And the big question, “Can I go to jail?”

First the good news.  In case you didn’t learn this in school, debtor’s prison was abolished in America in the 1830’s. You can’t go to jail for not paying your debts.

Here’s the bad news.  You can get arrested for not appearing in court to answer questions from your creditor.

The Wall Street Journal found that over 5,000 people were arrested for that last year in just nine big counties.   (If smaller counties did the same thing, and I hope they don’t, that would calculate to 100,000 arrests each year.)  Wow!

Can that happen to you?  Yes.  Here are the steps that could get your arrested for a debt lawsuit in Virginia.

The first paper you get is a warrant in debt.  Warrant makes it sound worse than it is.  (And just ignoring court papers is never a good idea.)  The warrant in debt cannot get you arrested.  It’s the paper when a bank, credit card company, can loan or debt collector says, “hey, you owe us this money.”  People often  call the lawyer for the creditor when they get a warrant in debt and ask, “do I have to go to court.”  The answer you get is, No.  But when you don’t go to court you admit you owe the money.

Once you miss that first court date, the machinery of the law goes to work to collect money from you.  If the creditor knows where you bank, or where you work, they can file papers for a garnishment.   You get notice of the garnishment about the same time you find out your bank account is frozen or your pay is short.  There’s a court date on the garnishment and people think that’s there chance to dispute it.  It’s not.  That’s the day the bank or your payroll is supposed to turn the money in.  When you didn’t show up at the warrant in debt court date, you automatically gave the creditor the right to garnish you.

If the creditor doesn’t know where you bank or work, they can file a “summons to answer interrogatories.”  That paper tells you, come to court and answer our questions so we can garnish you.

Some people think a “summons” sounds less dangerous than a “warrant.”  So if they ignored the warrant in debt, they should be able to ignore the “summon to answer.”  Bad idea.

The summons to answer comes with an “or else.”  If you don’t appear, the judge can order you arrested.  Usually you get one more chance.  Your last chance is called a Rule to Show Cause.  The show cause tells you to come to court to explain why you shouldn’t be arrested.  (If you explain, “Sorry, I didn’t know, I’m here now”–that usually works. )

If you miss the “show cause,” the judge will issue a capias.  Capias is an order to the sheriff to pick you up and bring you in.

That’s where you can end up if you ignore court papers.  So if you get a warrant in debt for a bill you owe and can’t pay, why start down that road at all?

Bankruptcy is a new start in life and a clear field for future effort. That’s usually a lot better than a free ride to the court house courtesy of the sheriff.