Do You Know the Way to Bankruptcy?

If you ask the San Diego bankruptcy attorney what leads clients to bankruptcy, he may answer judiciously that it's a series of unfortunate events.  But if he were to give you a straight answer he'd say, 

"Job loss, divorce, ARMs, injury, and car commercials."

The San Diego bankruptcy attorney would elaborate as follows vis-à-vis the above triggers:

1.  Job loss (or reduction in income)

The San Diego bankruptcy attorney would explain that loss of income does not create debt; debt predates the loss of income.  The lost income is what precludes repayment of debt.  And if the debt cannot be repaid then you need bankruptcy protection: protection from the hounds and scoundrels that will sink teeth in your hide and not let go... you know, the debt collectors.

2. Divorce

They say struggling finances complicate marriages and compel divorce.  Yet, the San Diego bankruptcy attorney stresses that divorce itself causes financial hardship.  Unless there is a new-found source of income, the same marital income or incomes must suddenly sustain 2 households.  In this situation, preexisting debt cannot be repaid and bankruptcy protection is routinely sought after.

3. ARMs

Absent a Constitutional Law specialty, the San Diego bankruptcy attorney still condemns  the unrestrained right to freely bear ARMs--or Adjustable Rate Mortgages--bestowed upon mortgagees.  This is not to be confused with the right to bear-arms or the inalienable ursine right of limb-retention.
ARMS compel a hapless homeowner to suddenly confront an essentially-new home-loan not payable in this lifetime.   The consequence is foreclosure: and surviving junior deeds of trust (second mortgages) that pursue the debtor post-foreclosure. A six-figure debt may readily result from an outstanding lien: bankruptcy protection is then necessary salvation.

4. Injury (and illness)

The San Diego bankruptcy attorney would cite for example that in chapter 13 bankruptcy, one may modify the payment plan midstream to permit addition of new health insurance premiums (and correspondingly reduce payments to unsecured creditors).  See 11 §USC 1329(a)(4).  This is simply an expression of public policy that advocates health coverage.   Without insurance, a single medical event can effect insurmountable debt.  With a single hospital visit, one may become bankrupt in the course of a day.

5. Car  commercials

The San Diego bankruptcy attorney would explain that a fair majority of radio- and TV-commercial ads advertise new vehicles.  On the radio, the narrator invariably quotes nominal interests rates (that don't apply to you) that convey a nonexistent sense of affordability, while promoting the message that you are nothing--nothing at all, if you don't get a new car.

The television ad adds the visuals of the barren mountain road, the empty track, surfaces you'll never drive.  One can only listen to--but not see, the luxury makers' spokesmen (I guess they're just nothing to look at).  Yet, their supremely smug voices clearly evoke the sights of Polo fields and yacht clubs, the places you can apparently join if you just buy a Lexus. 

On TV and in print, base-model prices sans taxes-and-fees tease, though they accompany the sight of the fully-loaded model; the fine print explains that your $20,000 offer is really $35K "as shown."

Persons are sold on vehicles they cannot afford.  And when their car's repossessed, they no longer have the car, but they still have the loan.  The post-repo debt or deficiency on a single vehicle can compel a person into bankruptcy.  And it's all about that guy trotting on his country-club horse telling you a Lexus is the way to go.  It's not.  The American obsession with driving the better car, the newer car, the faster car, drives one to misery.  Instead, the bankruptcy attorney in San Diego says:

Put the window down, crank the radio, put your head out the window (if you're a dog, otherwise, don't), enjoy the spoiled comfort of San Diego sun, cloudless skies and the next-door beach.  And if the vinyl seats and the windshield are cracked, the paint rusted, the smog too smoggy, the license plate blue-- (or "better yet" black!) not white... then so be it.  If it gets you where you're going, that's good enough for me.  And with a reliable make, drive that sucker to six-digit miles and beyond: they say 200,000 is the new 100,000.

San Diego Bankruptcy Attorney, Asaph Abrams
Offering free, no-obligation chapter 7 bankruptcy and chapter 13 bankruptcy consultations in San Diego. Visit us at http://www.bankonitsd.com/ or call 858-344-0500. E-mail admin@abramslawsd.com to set an appointment. Also representing Imperial County residents.

On credit cards and causation of bankruptcy:

Shiny and New: Credit Card Debt and Bankruptcy

Show me the way to the next credit card (via Alabama song)