It goes without saying that these are unprecedented times. The world economy has been devastated as a result of the Covid-19 pandemic. Tens of millions of people in this country have lost their jobs. And this is separate from an economic situation in this country where millions of people who do work live paycheck to paycheck. Essentially the economy is in the worse shape it’s been since the Great Depression. What is bankruptcy and how can bankruptcy help people in these very difficult times?
Bankruptcy law is federal law—i.e., law passed by Congress with the intention of helping individuals obtain debt relief. I have been a practicing attorney in Oregon since May of 1998. Since the summer of 2009 (soon after the last major recession), I started exclusively practicing bankruptcy law. I successfully file hundreds of personal bankruptcies per year (chapter 7 and chapter 13 bankruptcies). When I meet with potential clients for a consultation I explain the process and details of the bankruptcy process, including ramifications for filing a bankruptcy. But potentially more important than the pragmatic aspects of the bankruptcy process are the psychological aspects of filing a bankruptcy. What I have learned is that there is great psychological benefit to cutting the chord of burdensome debt (especially when an individual can no longer service this debt or can barely afford the monthly minimum payments). The reduction in overall anxiety and feeling of lightness after a bankruptcy filing is real.
But what about the “stigma” of filing a “bankruptcy?” It is extremely important to understand that the mythology of bankruptcy is a lot different than the reality of what most people think it means to file bankruptcy. Words are very powerful and the word “bankruptcy” is a word that has negative connotations. What I try to get people to understand is that the word “bankruptcy” is different than federal bankruptcy law. What I mean by that is that if there was no federal bankruptcy law (chapter 7, chapter 13, etc.), the word “bankruptcy” would still exist. The word “bankruptcy” has been around since the Middle Ages. (Per the Honorable David Hercher—one of the three bankruptcy judges in Portland—the word “bankruptcy” originated from the Middle Ages and originally meant “broken bench” because if a tradesperson didn’t pay their debts their work bench could be broken.)
Over the years the word “bankruptcy” developed negative connotations. However, federal bankruptcy law is law that was passed by Congress. When Congress passed this law they didn’t have to refer to the detailed statutory framework that they passed as the “Bankruptcy Code.” They could have named the “Bankruptcy Code” as “The Fresh Start Initiative” or something similar and the law would be exactly the same. Federal bankruptcy law isn’t a proverbial “get out of jail free card.” There are many debts like recent taxes, domestic support obligations, student loans, and government fines (to name a few things) that are not dischargeable in a chapter 7 bankruptcy (there are some things, like non-criminal government fines, that can be discharged in a chapter 13, but not in a chapter 7). If there was no bankruptcy law there would still be a word “bankruptcy.” And if Congress repealed the bankruptcy laws today, there would still be a word “bankruptcy.” Thus, it is very important to understand that the word “bankruptcy” and bankruptcy law are Not the same thing.
Despite the current coronavirus pandemic, the bankruptcy courts are still fully functioning. There just aren’t any in-court hearings right now (they are all phone hearings). The filings have always been done remotely. As with any legal issue, including a potential bankruptcy filing, it is always recommended that an individual meet with an experienced Portland bankruptcy lawyer to discuss their unique situation. Attorney, Adam M. Weiner, is an experienced Portland bankruptcy attorney and is always interested in helping empower people to gain more control over their financial lives (through knowledge, information, and, if appropriate, a chapter 7 or chapter 13 filing). And the result is reduced stress so individuals can more easily achieve the life that they desire. Adam is happy to schedule a phone, Zoom/Skype, or in-office consultation to discuss a potential chapter 7 or chapter 13 filing (his main office is in Sellwood, but has a secondary office in NE Portland, and virtual office capability on the Westside of Portland). Adam Weiner can help you navigate covid-19 and bankruptcy.