FOBB: Who really files for bankruptcy? by Bill McLeod, Esq.
Tuesday, November 3rd, 2009
"So I says to Bill..."
Friends of Bankruptcy Bill (FOBB) are experienced consumer bankruptcy lawyers willing to share their thoughts and answer bankruptcy questions on this site. Feel free to get in touch if interested in contributing as a FOBB.
Bill McLeod is a Boston-based bankruptcy attorney, representing creditors and debtors with over 15 years of experience. You can learn more about this and read more of his blog posts at www.mcleodlawoffices.com. Follow him on Twitter. Find him on Facebook.
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Bill McLeod, Esq.
Who really files for bankruptcy?
What leads a person to the steps of the bankruptcy court seeking relief from debt? That is not an easy question to answer – although there are some out there who may think they know the answer. But as I was digesting a recent opinion out of the Bankruptcy Court in the Northern District of Texas, I read the following:
Anecdotally, this court notes that it sees all sorts of consumer debtors come through the bankruptcy system. At one end of the spectrum, there are individuals who have been plagued with many bad circumstances that have led to their financial demise-such as health problems, injuries, medical bills, job loss or instability, divorce, or death of a bread winner. At the other end of the spectrum, there are individuals who have been blessed with good health and adequate jobs and resources, and yet have somehow created a mountain of consumer debt that they (and probably their creditors) should have known could never be repaid. Some of these latter individuals have even engaged in some sort of fraud along the way-perhaps in a loan application at some point, or with intentional avoidance and nonpayment of taxes, or by hiding assets before entering into bankruptcy.
But the vast majority of debtors this court sees fall somewhere between the two extremes. They are individuals who probably cannot honestly blame “bad luck” as the cause of all of their woes. And many of them have made more poor choices than wise ones, and such choices have finally caught up with them.
So what does this mean, and why am I sharing it with you? The easiest answer is that it is my experience that the court is right. However, there’s a rather significant “but…” (more…)
