When Nadya Suleman (better known as Octomom) filed for Chapter 7 bankruptcy in Orange County recently, it seemed everyone jumped on the bandwagon to criticize everything from her lifestyle to her spending.
Orange County Bankruptcy Attorney Vincent Howard can't defend the wisdom of all her decisions, but when it comes to the bankruptcy, she's really not alone in struggling. In fact, more than 1.2 million people are expected to file for bankruptcy at some point this year in the U.S. While that's actually down a bit from 1.4 million last year, people understand there is really no one this recession hasn't touched, and there is no shame in freeing yourself from the burdens of debt.
And the truth of the matter is, the stigma that used to exist for those who filed for bankruptcy protection simply is no longer there.
In fact, it's one of the top five myths about bankruptcy that was recently debunked in an article published in U.S. News Weekly.
The very first point addressed was the old belief that people who file are somehow irresponsible or reckless. That really couldn't be farther from the truth these days. Of course, that's not to say that some people weren't careless or displayed some lack of oversight. But the majority of bankruptcy filers are hardworking people who ran up against some very real problems that quickly became overwhelming and unmanageable. We're talking about people who became seriously ill and were hit with snowballing medical bills, or were sidelined by the legal fees and adjustment of a difficult divorce or have been stuck in a situation of long-term unemployment.
These are very common situations. A recent study by researchers at the Centers for Disease Control and Prevention indicated that 2 out of 10 families are struggling to pay their medical bills. And look too at the Bureau of Labor Statistics for April - more than 5 million people have been out-of-work for six months or more.
Now, all that said, there are a lot of things bankruptcy CAN do for you. There is also a lot it can't. It's most likely not going to get you out of paying child support or alimony. If you have tax debts and you haven't filed returns, bankruptcy probably won't help you there. And you'll likely still have to pay your student loan debt, unless you can present evidence that it creates a significant hardship and there's really no chance you'll be ever be able to pay it back anyway. We tell you this in the interest of full disclosure. You need to enter into this with your eyes wide open.
What you should not do, however, is keep your wallet wide open just prior to a bankruptcy, with the assumption that the debt will be forgiven anyway. In fact, if you rack up charges on your credit cards or other elsewhere and then file, a lot of times that can be considered fraud. Don't do it.
Filing for bankruptcy is a difficult choice, but we want you to know you don't have to make it alone.
Orange County Bankruptcy Attorney Vincent Howard at Howard Law can help. You can reach us toll-free at 1-800-872-5925 or send us a message online.
5 Bankruptcy Myths Debunked, By Susan Johnston, U.S. News Weekly