The Guilt of Bankruptcy: Using Bankruptcy to Reset Your Life

Categories: Interviews
Katherine:

Hello everyone. Thank you so much for joining us today on This Needs to be Said. This is your host, Katherine Waddell, and today we have a great bankruptcy attorney with us and he’s going to help you get over not just resetting your lives, but how to get over the emotional part of bankruptcy. Some of us will feel a little guilty but as we continue our conversation on today, you’re going to see that it’s not so bad and this is a good thing for your life. I would like to welcome into the conversation with us Attorney Alexzander.

How are you?

Alexz Adams:

I’m well, how are you?

Katherine:

I’m doing wonderful.

Tell us a little bit about yourself on This Needs to be Said, about how you got into the bankruptcy practice and just a little bit about you.

Alexz Adams:

Sure. My name’s Alexz Adams. I’m a consumer bankruptcy attorney in Portland, Oregon, serving the Oregon area.

I got into bankruptcy because it was a way for me to really help people who were in need and I get to help more than sort of a few people a year. A lot of attorneys are only able to handle a smaller load of cases, but through bankruptcy I am able to handle and assist a lot of people in a very meaningful way to get back on their feet and get through some really hard times. And I found that it was a really good fit for my personality and the way I like to, sort of, give back to the community.

Katherine:

Awesome.

So what was your, what … Did you go to school specifically for bankruptcy, you knew all along that’s what you wanted to do or did something happen and you landed here?

Alexz Adams:

No, it was interesting I came out to be a trial lawyer. To really help individuals against bigger institutions and insurance companies and things like that and this was in 2007/2008 during the financial meltdown.

Katherine:

Of course.

Alexz Adams:

And, it just seemed that there was so much need for the services that was going unutilized, that I looked into it and it was something that I was readily able to do. I come from a finance background, a business background. I have a MBA in finance and marketing and I thought the skill sets in the accounting and the math and things were very much within my interests and what I was able to handle and assist people with.

Schedule an Appointment
Katherine:

Okay, all right.

Now I started our conversation out with the guilt of bankruptcy. I want to go with that first question and talk about how to deal with it. And the reason I want to jump right on that question Alexz, is because so many people think it’s a dirty word. Bankruptcy’s a dirty word. It’s bad and you’re a bad person for doing that, so let’s talk about that.

Alexz Adams:

Sure, you know. It’s one of the main things I hear. It takes people so long to come into my office and ask for help and assistance and it always comes down to the guilt of bankruptcy.

I’m not the kind of person that would ever file bankruptcy. My parents didn’t raise me that way. I’m the kind of person that always pays my debts. And it’s a real challenge too, when people are really hurting and needing for help that there’s the guilt they carry around from themselves. To not even investigate what bankruptcy is, may or may not be able to do.

There’s certainly a stigma that happens with bankruptcy. It’s associated with the guilt of walking away from your obligations and the way I’ve explained bankruptcy before is it’s … You don’t have to … There’s sort of a difference between the legal and the moral obligations that you may have with you.

I’m a lawyer, I deal with the legal obligations. What I eliminate is the legal right for other people to chase after you for debts, to liquidate your assets and things like that.

On the other side of that is the moral sort of side that you may feel. If you have the moral side, look at bankruptcy as a pause.

It’s an opportunity for you to free yourselves from debt collection calls, from garnishments, from letters, from phone calls and things like that but it doesn’t have to be permanent. Although the debt collectors after bankruptcy are not able to come back after you, you can always go on your own accord and arrange payments after the fact, when you’re in a better position to get back on your feet.

So it’s an opportunity to catch your breath, move forward and if you need to come back to it for guilt reasons later, to revisit it, you’re more than able to do it and there’s a number of famous people in fact after bankruptcy went on to become very successful in their own right. Then, went back and paid their debts back.

So, that’s one of the tools I give people to use when they face that moral dilemma of, I can’t feed my family but I can’t file bankruptcy.

Katherine:

And that’s hard place to be in, because there’s so much of what we were told growing up, of do the right thing. So I could see a lot of people’s hesitation and even approach in it, because they’ve heard from non-lawyer people how bad it is and how wrong it is.

Now you said something that could definitely lead us into our next question, you said that someone could use bankruptcy to reset their lives, get on track and eventually came back and paid off those debts they owed. And I think that could give a person a good feeling, especially if they’re still battling with, “I just want to do the right thing”, even though filing bankruptcy, because it’s legally not wrong. And, it helps you get back on the right track.

And, you’re saying, “Hey, when you’re in a better position, sure, you can do that”. You can do what you believe would have been the right thing all along, but you just can’t for right now. And, you need the help.

And, a lot of us, too, pride will keep us from asking for help or even, investigating, like you said. So, the next question I wanted to go to is about people, of course we have cars, we got to get around, get our families around and whatever. How can we pay off our car and reinstate our mortgage through bankruptcy? Is that even possible?

Alexz Adams:

It is. So, one of the main things that we help people with is stopping foreclosure sales and stopping repossession or, in certain cases, actually after repossessions of a car, if it’s within a few weeks, oftentimes we can get the car back and restructure a monthly payment plan through what’s called a Chapter 13 bankruptcy.

There’s two kinds of bankruptcy that most consumers file. Chapter 7, which is a liquidation bankruptcy. That’s very cost-effective, it’s very inexpensive, and it’s very quick. But, there’s a con, you lose a lot of assets. Oftentimes, you are giving up real estate or other properties.

And, the other type of Chapter, called Chapter 13. It’s a reorganization bankruptcy. And, a lot of people look at it as a sort of a fixed refinance where we end up reducing your debts down to a single monthly payment. There’s certain debts you have to pay, for instance, mortgage arrears and the balance on your car and things like that, over typically 36 to 60 months. And, in exchange for that payment, to the court, your car gets paid, your mortgage gets reinstated and oftentimes, your medical bills and your unsecured debt, that you would get rid of in a Chapter 7 bankruptcy, are also eliminated.

So, people look at it as sort of a large scale refinance to get back on track. And it’s the more powerful of the two bankruptcies. And, it prevents foreclosures and gets cars paid off in a pretty straightforward fashion.

Katherine:

That sounds very powerful.

Schedule an Appointment
Alexz Adams:

Yeah, it is.

Katherine:

Now, let’s say I file bankruptcy with you today. How fast am I getting back to moving forward in my life?

Alexz Adams:

It really depends, but oftentimes if you’re filing bankruptcy today, usually within the next pay period or two, garnishments stop, phone calls stop typically within a few days. Collection letters stop, lawsuits grind to a halt, foreclosures are stopped instantly.

At the actual moment of filing bankruptcy, everybody in the bankruptcy world is granted a stay, which is a stop order or another way to look at it, would be sort of a restraining order against all debt collection. It’s automatic, it’s granted in every bankruptcy case and it’s instantaneous.

So, the relief with bankruptcy stems essentially from the moment we file the case.

And, you can see it with my clients a week or two after filing. The sort or pressure release is off their shoulders. Their shoulders are higher, they’re standing more upright, their voice has a kick to it that you don’t see.

Katherine:

Absolutely.

Alexz Adams:

It’s one of the joys of doing bankruptcy. I know that’s the result that my clients are going to get and they don’t know that. So, I get to sort of lead them to that joy and that pressure relief. It’s a wonderful feeling.

Katherine:

Wow.

Now, let me ask you this question, about your thoughts about bankruptcy before you actually went into practicing it. Can you identify so well with people’s guilt because you were raised like many of us, to do the right thing and bankruptcy is bad? Or, did you already know that bankruptcy was actually a tool that would help you reset?

Alexz Adams:

You know, candidly, I didn’t know a whole lot about bankruptcy until I got into it. To learn about, sort of the ins and outs and the how it works. And, you know, to me, it was just a legal tool initially, to solve a problem. Which is really what the legal system is set up to figure out.

It wasn’t until I did it for a couple of years and I helped hundreds and hundreds and hundreds of people that I was able to identify that that was a real source of consternation among the people that I was helping.

They couldn’t …. They were stuck and they couldn’t get unstuck because the guilt that they’ve grown up with was really oppressing them, in a way that was counterproductive to the end goal. With the end goal being to get them back on their feet and if they felt they needed it to pay their debts down the road, they’re able to do that.

So, it’s something we talk about routinely and I do have a chapter in my book about sort of the bankruptcy guilt scenario. Sure.

Katherine:

Great segue. Tell us a little bit about your book, Attorney Alexz.

Alexz Adams:

Oh, I have a book called, Navigating the Debt Relief Maze, which is Chapter 13 and 7 explained. Which explains in Oregon, sort of the process, the basic processes of Chapter 7 and Chapter 13 bankruptcy.

I wrote it for the non-attorney. And, one of the criticisms attorneys have is we’re always talking very lofty to each other about cases and courts and statutes and things like that. And, I find that to be … It’s boring to write and boring to read. So, I put out a little guide that’s really designed to people considering bankruptcy. To explain, sort of, this is what it is and this is what it can do for you and if … You should know the nitty gritty of it, because it’s not what you think it is.

It’s oftentimes much more powerful, much more straightforward, and much more useful for people who are struggling with debts. For people who, you know, have an unexpected medical bill or just thousands of dollars of credit cards or divorces and things like that.

There’s lots of reasons why people end up in debt, but it’s pretty shocking that they never even consider bankruptcy when, in a lot of cases, it’s one of the most powerful ways to quickly get you back on your feet.

So, I put that guide out, to sort of offer up what I can share with people and see if they can benefit the community.

Schedule an Appointment
Katherine:

How can people get a copy of your book?

Alexz Adams:

They can go to my website, http://www.portlandbk.com. We send books out to anybody in the state of Oregon, who is interested in learning more about bankruptcy and considering bankruptcy as an option to their financial problems.

Katherine:

Awesome.

And, if they want to talk with you outside of this interview, how do they get in touch with you?

Alexz Adams:

Certainly. You can call my office at 503-278-5400. That’s 278-5400 and we offer no cost consultations for first time visits for people considering filing bankruptcy.

Katherine:

Awesome. I want to say thank you for stopping by, “This needs to be said”, and sharing this with us. And, I look forward to us talking again next month.

So, have a great day.

Alexz Adams:

Thank you. I look forward to it.