Peter Mullison proposes in a recent article, that there are five types of people one should talk to about financial problems:

• Friends,
• Family Members,
• Spouses,
• Religious Counselors, and (thankfully)
• Bankruptcy Attorneys.

If one is undecided about whether bankruptcy is appropriate in their situation, he suggests they should elicit the advice of the above parties.

While I understand the sincere sentiment in undertaking that path, it is potentially very dangerous.

Advice From a professional is key

While I’m all for getting support and feedback from those close to me, unless they’ve gone through a bankruptcy or had the same issues (and even if they have), the first person I would talk to about my financial problems would either be my accountant or a bankruptcy attorney.

If I was still undecided, I would then talk to another accountant or bankruptcy attorney (the famous “2nd opinion”).

Bankruptcy poorly understood

The biggest issue with talking to others about things they know nothing about is you’re going to potentially get very bad advice.

There isn’t a week that has gone by in my 22+ years of practicing bankruptcy law that a potential client doesn’t tell me that they talked to someone in the past or present who told them they couldn’t file a bankruptcy, or that bankruptcy would destroy their life, they would lose everything they own, their credit would be “destroyed”, etc.

Or, there’s the opposite end of the spectrum where they hear from someone that they can file bankruptcy for $500 and wipe out everything and there are no consequences because that’s what Betty’s son Bam-Bam did after he assaulted someone with his club.

Usually the non-professional’s assessment of their options is completely wrong.

Everyone’s situation is different and bankruptcy is very complex.

You can’t just rely on what your friend’s cousin’s stepfather did in a bankruptcy case as being how yours would go (positively or negatively).

For you South Park fans, this isn’t the time to ask yourself: “I wonder what Brian Boitano would do.”

This isn’t a lot different than making a decision about whether to see a doctor or whether to follow a doctor’s advice.

A personal story comes to mind from a relative of mine who had prostate cancer. Several doctors he went to said the only thing he could do that would work is have a radical prostatectomy and remove the whole thing (which has all kinds of permanent side effects).

Said relative wasn’t sure that’s what he wanted, so he persisted until he found a doctor that said they could do localized radiation and it would work just fine.

After researching that option further, he opted for that solution and it worked fine, with no side effects, and 25 years later he is still cancer-free. I know he used his wife and friends for support and perhaps to even weigh the options provided by his different doctors, but it was the professional’s advice that governed his decision making process.

This may be precisely what Mr. Mullison meant in his article, but it wasn’t entirely clear.

Keep Your Friends Close and Your Attorneys Closer?

My point is this: I agree with Mr. Mullison that it is important to share your issues and concerns with those close to you–particularly your spouse (in fact, in California at least, there is a duty to inform the spouse if one is going to file bankruptcy because it affects both spouses).

But the decision on what to do about these problems ultimately should be made with advice from professionals.

 Image courtesy of solo_with_others

Mark Markus has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau. His webpage is www.bklaw.com

The client with a pending foreclosure sale called and canceled an initial consultation with me last week.   He wanted to “think about it” before coming in.  If I had been the one taking the call, I would have gone ballistic.  (Can we still say that after the Tucson shootings?).

Gathering information about bankruptcy does not commit one to filing.  There is such a lot of bad information out there about bankruptcy, not to mention the information that might have been good once, but is outdated post bankruptcy “reform”.

Reliable information is neutral.  It is, itself, painless.  Clients can make themselves feel as badly about filing bankruptcy as they choose, but the pain is largely self inflicted.

Money issues come with so much emotional baggage.  My pitch to clients is to look at  their financial options as purely a business issuee.

• can you repay this debt
• what important purchases or savings  would be slighted to do so
• what would be at risk in a bankruptcy

So many clients come in, full of  bankruptcy myths, misunderstandings, and “research” from which they’ve drawn erroneous conclusions.

My fear for the guy facing the foreclosure sale was that he might conclude that he was willing to let the property go, and not consider the significant adverse tax consequences that a foreclosure outside of bankruptcy might trigger.   “Thinking about it” without solid information to contemplate is pointless.

Arghhhhh!

Image courtesy of jcfischer

Jonathan Ginsberg’s piece about the murky language of notices from the bankruptcy court struck a cord. In an attempt to provide notice, they sow confusion.

But my pet peeve is the client who calls up and says, literally, “I got this letter from {insert name of court or creditor, or trustee}. What does it mean?”

I wonder if they think I’m the offspring of Carnak the Magnificent, who provided answers BEFORE reading the questions.

I’m trying to train my staff to tell them to fax me the letter in question, so I can see what they are talking about before trying to interpret it.

In my imagination, it would be much more fun just to provide random answers….