Bankruptcy Still Alive and Well

Practicing as a consumer bankruptcy lawyer can be frustrating for many reasons, from overly agressive debt collectors and unsympathetic trustees to pro-creditor judges, sometimes it seems that every day is an uphill battle. But what angers me more than anything, are the creditors, debt consolidators and other charlatans who spread lies about the availibility of bankruptcy protection to the everyday consumer.

During my short (4 mile) commute to the office, I constantly hear radio commercials falsely proclaiming that bankruptcy is no longer available so that the only option is to pay thousands of dollars to a debt consolidator who will "negotiate with your creditors." Unfortunately, most consumer bankruptcy practitioners are solo or small law firms who do not have the access to media outlets needed to dispell such rumours.

The truth is, in my experience (fifteen years filing consumer bankruptcies), debt consolidation simply does not work. Every week I meet with new clients who have tried debt consolidation, whether for years or for months, only to find that after spending thousands of hard earned dollars struggling to reduce their debt, the consolidation plan falls apart when one of the creditors files a lawsuit or payments are missed due to a temporary period of unemoplyment or sickness. While I find the attempt to pay creditors through as consolidation plan admirable, given the high interest rates and junk fees charged by most credit card companies today, it is usually futile and results in a waste of money and a long delay to improving creditwothriness. Simply put, I strongly believe that once they realize they cannot afford to pay their bills, most consumers will derive more benefit from quickly filing a chapter 7 or 13 bankruptcy than from pursuing credit counseling.