How a Bankruptcy Started With a T-Shirt!

Gail DonaldsonWhy do clients end up in my office every day?  Today, a client told me it started innocently with a t-shirt.  He was in college and offered a credit card with a $200 limit.  How much trouble could he get into with that small of a limit? Well, about twenty years later, that credit card debt grew and grew and snowballed into a lot more.

Common Reasons for Bankruptcy

Here are some common reasons clients end up in my office:

Credit Cards. Like my client today, it can start out small and the next thing you know it can double out of control if you missed a payment or only pay the minimum payment.  The late charges and interest continue to grow into an amount you can no longer manage month to month.  Credit cards statements show you how long it will take to pay off the debt by only paying the minimum and it can be YEARS.

Payday Loans

These type of loans charge an incredibly high interest rate which then captures you in an endless cycle of renewing and only paying interest.  By only paying the interest, you never pay the debt off and it doesn’t go away.

Buying more car or house than you can afford

Many clients purchase a house and car without thinking about maintenance and insurance costs.  They only look at the monthly payment and think they can afford.  The extra costs must be considered or you may end up falling behind on the payments.  Chapter 13 can usually help clients get back on track with these types of debts but insurance and maintenance is still needed for both.  Remember, just because you are approved for “X” amount by the bank doesn’t mean you can really afford it.

Student Loans

When we are in college, student loans are made readily available to complete our education.  You must only get the amount NEEDED as this debt will have to be repaid.  Typically, the payments become due six months after graduation.  Make sure your career path will lead to a job that will give you the ability to make the required payment.  If you fall in default on the student loans, there can be consequences that may include an offset of any tax refunds or a levy on your wages.

No savings for emergencies

Most clients I see have no “rainy day” funds.  It is important to have at least a small amount in savings for life’s emergencies.  Without any savings, it can lead to taking out high risk loans such as payday loans that put you in a never ending cycle.

Lack of medical or car insurance

I see many clients who have incurred lots of debt due to lack of insurance whether it’s car or medical insurance. The State of Alabama requires proof of liability insurance; however, many drivers drive without it.  If you owe money on your car, you need full coverage insurance in the event the vehicle is totaled.  If totaled, the insurance company will pay off the lienholder for you.  Many clients know this but still drive without full coverage which leads to a deficiency on the vehicle.  Many creditors will pursue via lawsuit to collect the deficiency which brings them to my office.  The same can be said when a medical emergency happens and there is no medical insurance.

Ignoring collection calls or letters

Many clients come to my office after they have been harassed by collection calls or letters.  Many times, the collection firms will file a lawsuit against a client in order to collect.  Do not ignore either.  If you dispute, you must do so in writing so the collection agency can investigate and cease collection if you prove the debt is not owed.

Are you in one of these situations?  If so, don’t suffer any longer.  Please call one of our Bond and Botes offices today for a free consultation to see if we can help you!

 

 

Share This Page

Bond & Botes Law Offices

At Bond & Botes, we now offer full service bankruptcy consultation and filing over the phone or by video from the comfort and safety of your home or office. Please call 1-877-581-3396 or click here to setup your free phone or video consultation.

The lawyers at the Bond & Botes affiliated offices serve clients at offices in Anniston, Birmingham, Mobile, Montgomery, Opelika, Decatur, Huntsville, Florence, Haleyville and Gadsden, Alabama; Vicksburg, Hattiesburg and Jackson, Mississippi. Read our disclaimer here. You can view our Privacy Policy here.

Alabama Offices

Birmingham

2107 5th Avenue North
Age-Herald Building
Birmingham, Alabama 35203
Phone: (205) 802-2200


Shelby County Location
15 Southlake Lane, Ste 140
Birmingham, AL 35244
Phone: (205) 802-2200


Florence Location
121 S. Court Street
Florence, AL 35630
Phone: (256) 760-1010


Huntsville Location
225 Pratt Avenue NE
Huntsville, AL 35801
Phone: (256) 539-9899


Montgomery Location
311 Catoma Street
Montgomery, AL 36104
Phone: (334) 264-3363


Decatur Location
605 Bank Street NE
Decatur, AL 35601
Phone: (256) 355-2447


Haleyville Location
914 19th St.
Haleyville, AL 35565
Phone: (256) 760-1010


Gadsden Location
430-B Chestnut Street
Gadsden, AL 35901
Phone: (256) 485-0195


Opelika Location
216 South 8th Street
Opelika 36801
Phone: (334) 264-3363


Anniston Location
1302 Noble St #2C
Anniston, AL 36201
Phone: (256) 485-0195


Cullman Location
200 Second Avenue SW
Cullman, AL 35055
Phone: (256) 739-9866


Mississippi Offices

Jackson Location
120 Southpointe Dr., A
Byram, MS 39272
Phone: (601) 353-5000


Hattiesburg Location
607 Corinne St, Ste B8
Hattiesburg, MS 39401
Phone: (601) 353-5000


Vicksburg Location
1212 Farmer Street
Vicksburg, MS 39180
Phone: (601) 353-5000

© 2024 by Bond & Botes Law Offices. All rights reserved. Disclaimer | Privacy Policy