When meeting for the first time to discuss financial problems and whether filing a Chapter 7 or Chapter 13 Bankruptcy, I am often amazed by how often people simply will not add and subtract. Math is such a simple thing and almost everyone can do at least some math. People come into my office and the first thing that they say is that they want to keep their house, car or many other things. I listen to the person who wants to keep everything and I understand what they are saying. Sometimes the person had a temporary income loss and now they are making as much or more than they were making before the income reduction.

In this situation, the problem is often that the creditors are demanding payment now for all the missed payments. If the creditors would just work with you, enough money is now being made by you to pay the creditors. The creditors just refuse to work with you. A Chapter 13 bankruptcy is often the perfect solution to this problem.

If you are having trouble paying your bills your living expenses, how can you afford to pay your creditors money? Before you can pay your creditors anything, what other bills do you have to pay? Food, lights, gasoline, doctor’s bills come to mind have to paid first. If you have not been paying your bills such as your house payment before and do not have a lot of money sitting around, how are you going to pay your house payment now?

The problem is that finances are very similar to dieting. You can cut back and not eat certain foods that you love for a period of time. It is almost impossible to not eat certain foods that you love such as chocolate forever. That is why diets fail and that is why tightening your financial belt will often not work either. Sure you can not buy shoes for a while, but, sooner or later you will have to buy shoes.

If the belt tightening causes you to not have things you actually want or need, then sooner or later you will go get them or the need will become such that you are going to no longer deny yourself. Whether it is finally going on a vacation after not going for a long time or the roof that you will have to replace one of these days, the time finally comes. If your income will not allow you to save for these expenses, then when you do replace the roof or go on a vacation, the money will be taken from somewhere. You begin the slow decent back into financial problems and you are back to juggling who or when you pay creditors.

You say will make more money doing the same thing you were doing before you came to my office. If you could make more money, why didn’t your do that before. I have not met any lazy debtors. No one plans to not making as much money as they used to make. I have found that most people in financial difficulty are already doing everything that they know to do to make more money before the debtors come to see me.

If you cannot add income and/or subtract expenses, then you have no chance of making it in your present situation. Meeting with financial counselors who are honest with you is the first step in working your way out of financial problems. However, if you are not honest with yourself, the counselor cannot help you.

That you want to keep your stuff, pay your creditors and live happily ever after is understood. What if that is not possible? If you watch football, sometimes a team will intentionally take a safety. The team realizes that its only chance to get out of the situation it is in is to give up something. This may be considered to be going backward by some. What the football team is doing is trying to adjust its situation or field position believing that it will put itself in a better position to win.

In basketball, if a team is trailing it will start fouling hoping to change the outcome so that it might still win. The team that is trailing is hoping that the team that is leading will miss free throws and allow the trailing team to catch up. The basketball team is actually going backwards when it fouls the opposing players. I have seen many times that a game is won or lost because the leading team fails to hit its free throws. This is considered a great strategy if you are coaching a basketball team.

Why is it bad strategy to act as a basketball or football team does? Are you able to make strategic retreat if that is what is in your best long term interest?

Are you willing to make the changes in your life to achieve long term success, no matter what the short term cost? If you cannot afford to send the kids to the school you want, maybe you will just have to home school them for a while. If you cannot afford the car payment on your car, maybe you just need to buy a clunker and learn how to fix your car.

How will you adjust to your new reality? Are you willing to take the tough steps to achieve your goals? Chapter 13 can often help you save assets and re-establish your life. Only you can re-establish your life. Only you can make the hard choices that must be made to get your life back, on-track and moving in the direction that you want your life to go.

About Nathan Davis, Esquire

Born in Charleston, South Carolina, Nathan Davis has been practicing law for many years. Mr. Davis has a wide variety of experiences having practiced domestic relations, criminal law, social security law having also practiced collection law in the past. This knowledge is helpful when someone needs to restart their financial life. The practice is now primarily bankruptcy and debtor representation work, but, Mr. Davis continues to also practice real estate law, trusts and estates and a general litigation practice. I believe that the most important part of representation is trying to leave you better off when the case is finished than when you started. Although I will do as my client directs, I will always tell you if I think that you are making a mistake. Bankruptcy is about a "fresh start". If you do not make changes in what you are doing, you will be doing what you are doing now in the future. There is no shame in bankruptcy or other steps that you may take to start your life over. Too often, people worry more about things than about themselves, their family or their future.
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