Interviewer: Why is that and what are some of these misconceptions that you have to dispel about people as to why it’s got such a bad reputation?
James Logan: The main reason is that the credit card industry and lenders, mostly the student loan industry, they have better lobbies and they have more money for advertising and putting out the kind of information to dispel bankruptcy to discourage people from filing bankruptcy. When they changed the bankruptcy laws in 2005, they really made it more difficult for people to file bankruptcy and they made it more expensive for people to file a bankruptcy and really, the whole point of mostly the changes in the 2005 law were to discourage people from filing bankruptcy because obviously it’s not in a creditor’s interest for you to file a bankruptcy and they’d rather prefer to make you keep paying. There are not too many people out there who have the time or money to advertise the advantages of the bankruptcy.
Notable Case Studies of Successfully Discharged Bankruptcies in Maryland
Interviewer: Are there any particular cases in regards to chapter 13 bankruptcy that you can remember, like any successful case stories that you can think of that you may want to share?
James Logan: The most successful chapter 13s, people managed to save their homes and keep their roofs over their heads and that’s really the main reason people file chapter 13 is they want to stop a foreclosure, they want to catch up on their mortgage and they want to save their house and keep it for their families and friends. We should’ve had over hundreds and hundreds of success stories like that. Chapter 7, you hit the nail on the head when you say, “It’s a balancing act. If I do chapter 7 today, I’m going to be better off in 5/10 years down the road”, and if you got more than $10,000 in debt, the answer is probably almost certainly yes. You can buy a car immediately after filing a chapter 7, so if you’re worried about being able to buy a car, that’s not a problem. You can buy a house in FHA loan two years after filing a chapter 7. So, if you’re currently renting and you want to be a homeowner someday, in most cases, filing a chapter 7 get rid of your debts and you put that money in the bank for two years, then you can buy a house.