Lots of my clients have spent time talking with friends, co-workers and other people for their opinions about whether filing for bankruptcy is a good idea.
That’s good, because you need as much information and support as possible before making such a big decision.
Those around you can not only help you think about your situation in a different light, but provide their own thoughts on some of the options you’re considering.
But opinions are cheap, right? Everyone can afford one.
So before taking their loving words to the bank, remember these 3 pointers.
Your Friend’s Bankruptcy Doesn’t Matter
Lots of times people come to my office ready with a story about their best friend’s bankruptcy. He didn’t lose his house, but had to pay back the IRS for a bunch of tax debt. His opinion is that bankruptcy is a walk in the park. Sure, the government got their pound of flesh but he owed only a few hundred bucks.
You’re not your best friend. He had a unique set of facts and circumstances that needed to be handled in his bankruptcy case. His tax debt was X years old, and he had $Y in equity in his house. What happened to him may not happen to you.
His opinion is valuable, but only if you’re in exactly the same boat. Income, expenses, debt and equity all line up.
They don’t? Oh, then he’s got an opinion about whether filing bankruptcy was good for him – not for you.
Nobody Pays Your Bills
You tell your sister that you’re thinking of filing for bankruptcy and she nearly has a stroke. She thinks it’s the worst idea you’ve ever had, and that you should be paying your bills.
Of course you should pay your bills. If you have the ability to do so without wrecking yourself physically, emotionally and financially for years to come, by all means pay them off.
The problem is that if you’re thinking of filing for bankruptcy, you likely can’t afford to pay the bills. You’re struggling, losing sleep and preoccupied with how to cover the next payment that comes due.
Your sister, of course, is offering advice without a dollar to back it up. She doesn’t pay your rent, feed your family or work your job. Yet here she is, telling you what to do.
My take? When someone else is willing to pony up some cash to help you out, that’s when they get a say in your financial future. Until then, they can keep their righteous indignation quiet.
Misery Loves Company
Why do people gossip about their friends and family members? Because there’s something inside us that makes us want to feel better about our lives. Some people fill this need by doing something positive with their time, whereas others descend into the pits of idle chatter.
Your co-worker is broke, living paycheck to paycheck. There are a few options to make him feel better. He can get a better job and cut his spending, which is positive. Or he can talk about someone who’s doing worse than he is, and make himself feel better.
If you tell people you’re filing for bankruptcy, they’re going to talk about it for a day or two. If you tell them that you’re stuck in debt and running scared from all the bill collectors, they’re going to talk about that for as long as it continues. Chances are pretty good that in the absence of the former, the latter is going to stick around for a long time.
I’m not saying people are bad, just stating a fact of life. Gossip fills the empty time and makes small-minded people feel better about their own lives. If your small-minded neighbor (who has only your best interests at heart) tells you to file for bankruptcy then she’s got a limited stock of gossip to dish out. But if she tells you to keep going as you are, there’s a good chance you’re going to keep coming back to her with tales of woe that she can spread around for months and years to come.
One good option? Don’t tell the local blabbermouth about your bill problems.
Remember – It Doesn’t Make Them Evil
Those around you genuinely love you. They don’t want bad things to keep happening, and they’re looking out for your best interests.
But the bottom line is that nobody can tell you what’s best for you, or how your situation is going to unfold if you’re thinking of filing bankruptcy. Make your own decision based on as much knowledge as you can get from reliable sources (you’re here, which is an excellent start). Then, armed with that information, you can make a rational and intelligent decision about what’s best for you.
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