Credit Card Dilemmas of an Honest Parent

Common Silent Scenario:

A single mother of a young child is trying her best to support her child and herself. She has a job, and it barely covers the high rent, utilities, or the high cost of food. Based on the daily smile she wears and her upbeat posts on social media, you'd never know that she were financially struggling.

Over the past few years, she has been very cautious to only use her credit cards when it was absolutely necessary. Every month, her credit card payments, which she tries to keep in an amount at least double her minimum payment, get withdrawn from her bank account.

And at the end of each month, she reviews her account balances, only to see her checking balance staying the same, her saving account empty, and her credit card account balances increasing because of high interest and other charges.

Last month, on top of it all, her employer cut her overtime.

This well-intentioned mother was in tears, but she stayed strong. She quickly lowered her credit card payments to just the bare minimum. After all, she had to pay for her daughter’s school field trip expense, and buy her some desperately needed shoes, and she couldn’t do that if paying more to her credit card accounts.

Pure Intention To Repay Debt:

Every step taken by this mother has been in good faith and pure intention to repay any debt. Not surprisingly, she has avoided even the thought of wiping her debt clean and giving herself and her daughter a fresh financial start, but now it’s starting to sound like her only possible safety net.

Whether it has been COVID-related illnesses and deaths in the family, employers cutting hours, disability, or simply the backbreaking cost of living, there is no shame in having incurred debt in good faith.

In a world dominated by the fake lives we see on social media, it’s become a difficult value judgment to even consider the benefit of federally available laws to fully wipe out your debt, and to start over.

Don't Dismiss Bankruptcy Until You've Talked To a Lawyer:

Once debts are discharged in a bankruptcy, the credit does take a hit, but it also sends a message that for the next 8 years, this person cannot file another bankruptcy, and therefore would have to repay any new debt. Eventually, creditors send offers for new credit card accounts and the credit score slowly begins to rebuild.

I meet clients from all walks of life, and the ones that most need to wipe out debt are also the ones that have tried the longest to repay it, only to realize that it’s not going anywhere.

After all, what’s the use of having all this credit card debt when the cards are maxed out, you can’t repay the debt even if you wanted to, and your credit score has already taken a hit?

What Does A Bankruptcy Lawyer Know?

When the thought of filing for relief under Chapter 7 of the Bankruptcy Code arises, it is crucial not to get too excited too soon! The first step is to find a bankruptcy lawyer who is empathetic to the client's unique situation, and is not quick to push the filing.

Second, if requested, a bankruptcy lawyer should help weigh different options of debt relief before they recommend filing a Chapter 7 voluntary petition. Oftentimes, a person's financial situation, past decisions and actions may not qualify them for a particular type of bankruptcy, as it's not a one-size-fits-all.

Third, after a thorough consultation, the bankruptcy lawyer should know whether the following factors make the client eligible for a success Chapter 7 Discharge of Debt:

• Client Profile & Residency

• Income Calculation

• Monthly Expenses

• Types and Amount of Debt Owed

• Personal Property Analysis

• Real Property Analysis

• Prior Actions of Client

As a Chapter 7 Bankruptcy lawyer, I often hear the sigh of relief from a qualified client, when I explain to them that their basic personal belongings, their car, and their honest income will not be affected by filing a bankruptcy case.

It’s very important for anyone considering a Chapter 7 Bankruptcy to speak to an empathetic and experienced bankruptcy lawyer, who will take the time to dig deep into the financial situation, and make sure they qualify. A Bankruptcy is not for everyone, but for some people it’s the only way out of debt, and on to a fresh start.

If you, or someone you care about, live anywhere in Ventura County, Conejo Valley, San Fernando Valley, or Simi Valley, feel free to contact my office at 805-424-3131 for a free consultation.

Be sure to subscribe to www.interplaylegal.com to receive a copy of the Client Questionnaire, and to be the first to get notified of more blog posts.

PLEASE NOTE: None of the information herein is intended to give legal advice. For a complimentary attorney consultation, contact us at 805-424-3131. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.