Written by Upstate bankruptcy lawyer Däna Wilkinson
In a lot of ways, like much in life, what you get out of your bankruptcy depends on what you put into it. Bankruptcy can be a huge benefit. A Chapter 13 case can help you catch up on mortgage or car payments, or even child support payments. A Chapter 7 can discharge credit card debt, personal loans, and even payday loans. You can stop all the harassing phone calls, prevent or deal with law suits, stop wage garnishments, even deal with taxes in some cases. But often the outcome in a given case depends largely on the amount of time and effort spent putting the paperwork together, and handling your finances after the bankruptcy is filed.
Here’s what I mean. If you are preparing to file a bankruptcy, your attorney is going to ask you to fill out paperwork and provide copies of certain documentation. Practices may vary slightly from attorney to attorney, but basically you are going to have to list all your creditors, including their addresses, account numbers, and the amount you owe. Note that I say “list.” I did not say bring your attorney a grocery bag full of bills you haven’t taken the time to open. I don’t know any attorneys that like getting the information that way. I’ll take it, but I’ll charge you an extra fee to go through your bills, and trust me, you don’t want to pay my hourly rate for me to open your bills. There are a couple of really good reasons that you need to take the time to provide the information to your attorney. One is that you are the one who is going to have the sign the paperwork under penalty of perjury, and answer questions under oath about it. The other is that I don’t know your finances the way that you do.
I sometimes have clients who need help with preparing to file a bankruptcy, either from a family member or from me or my staff. Perhaps there is a physical disability that makes it difficult to read or write; perhaps there is an illness that makes help a necessity. But regardless of who does the actual gathering of information, the client is the one that needs to be familiar enough with the information to answer questions about it. So, get help if you need it, but don’t expect your bankruptcy attorney (or her staff) to do all the leg work for you.
Another example of taking responsibility for your own bankruptcy is making all the payments you are required to make in a Chapter 13 case. Note that I said “all.” In a Chapter 13 case you are going to make a payment to the Chapter 13 trustee every month. It is your responsibility to make that payment, and you know that going in. Your attorney should tell you what that payment is, or give you a copy of your plan, but your attorney is almost certainly not going to remind you to make that payment every month. In South Carolina, there is currently no easy way for your attorney to track the dozens, or even hundreds, of active cases to see that all her clients are making their payments. It is the clients’ responsibility to make the payments, and that includes making sure that employers are sending payments that are payroll deducted.
In many Chapter 13 cases, you are also going to be making a mortgage payment (or more than one) directly to your mortgage lender. It is also your responsibility to see that those payments are made. Often lenders will stop automatically drafting your mortgage payments (for technical reasons I won’t go into here). You are nevertheless expected to see that the payments are made, even if the lenders don’t make it easy.
Even after your bankruptcy is over, you need to make sure that the payments you want to continue to make (like mortgage or car payments) are made on time. If you want to eventually rehabilitate your credit rating, you have to ensure that the payments coming due after bankruptcy are timely. This can be especially challenging if someone else (like a former spouse) is the one who is supposed to make the payment, but the one thing you shouldn’t do is ignore it.
I talk to a lot of people who have outsourced their financial matters and regretted it. From husbands who relied on (now ex-) wives, to grieving widows who are unsure how to handle the bills, to couples who are angry with each other because each feels that other should have handled the bills better, or at all–I’ve seen all kinds of variations on that theme. And let me tell you, in my own life, and my business, I would dearly love to hand over the drudgery of paying bills, preparing tax returns, and reconciling bank statements to someone else. The problem is, the only people I would trust to do that would charge me way more than I could afford. And the people I could afford to hire to do it I don’t trust.
An awful lot of big businesses who have outsourced their customer service have regretted doing so; like them, you need to find a way to be involved in, and take care of, your financial future. Nor can you rely on your bankruptcy attorney to act like your mom and take care of things with no participation from you. So, however much you hate handling paperwork, and however much you feel that someone else in your life or family could do it better, the fact is that you need to participate, in your bankruptcy and in your financial life after bankruptcy is over. Put on your big boy (or big girl) pants and get busy! Bankruptcy gives you the opportunity to right your financial ship. Don’t waste it!