Hispanics and Bankruptcy
Photo Credit: Fried Dough on Flickr. CC BY 2.0.
By Myrna Passalacqua, ESQ.
Hispanics are responsible, hardworking and honest people. That's why when we find ourselves in a difficult economic situation, and we can't pay our debts, we feel genuinely overwhelmed and tormented.
What are our options? The first option is, make a superhuman effort and pay every creditor a little. Unfortunately, the way loans are designed, credit cards etc. Making the monthly minimum payment doesn’t get us out of trouble quickly, as interests keep piling up and the balance doesn’t really decrease significantly. We feel like we're rowing and rowing, but we're not moving forward.
The second option is to ignore debt, not pay some creditors and continue living the best we can with the reduced income we receive. This alternative presents several serious problems, so I do not recommend it. For starters, creditors we don’t pay, will be able to repossess the goods and items we buy. In addition, they will be able to sue us and confiscate our salary, bank accounts and even other goods that we had already paid off before.
The third option, and in my opinion, the smartest, is bankruptcy. But us Hispanics don't like that idea. We have been taught to fulfill our obligations, and we see bankruptcy as a shameful thing. Nothing further from the truth. Bankruptcy is not a moral decision, bankruptcy does not speak of our character or education. Bankruptcy is merely an economic decision. It is a tool that provides us with the law itself to resolve our finances.
On a personal level, we have two options: total bankruptcy (Chapter 7) or bankruptcy to reorganize our debts (Chapter 13). Both allow us to maintain our homes and cars if we meet certain requirements. In many cases we can even remove forever the second mortgage on our house and end up paying only the first! In addition, within Chapter 13, it is very common to achieve a mortgage modification, reducing the amount we have to pay the bank monthly.
As you can see, bankruptcy offers many advantages and allows us to start a life free of debt and creditors. The possibilities are many. On the other hand, most of those who receive the benefits of this law manage to restore their credit with relative ease.
To those who have spent difficult and sad moments, thinking about their economic problems I urge you to put aside fears and shame that they have no reason to be, and join the thousands of citizens who, cleverly, have used bankruptcy to achieve a new beginning. Start now to prepare for a much merrier Christmas this year!!
DISCLAIMER: This article is provided for informational purposes only and should not be construed as legal advice. If you require legal advice or assistance regarding bankruptcy or any other legal matter, please contact our firm, or visit our website: passalacqualawfirm.com. Our experienced attorneys are here to provide you with personalized legal guidance and support tailored to your specific needs and circumstances.