Bankruptcy Doesn't Have to Feel Like a Root Canal

September 7th, 2009 by Reed Allmand

Getting good information early improves debt management decisions.

I have a friend—we’ll call her Jill, who has had a horrible fear of dentists for as long as I’ve known her.  Even if not to the same extreme, most of us share her apprehension.  I can understand her fears based on the horror stories she had described about various dentists she had seen over the years.  Last fall, one of Jill’s simple cavities turned in a major hole in her tooth.  The hole exposed the nerve of her tooth and you could tell the simple act of drinking coffee was excruciatingly painful for her- yet she steadfastly refused to go to the dentist, even though she had dental coverage through her employer.  Finally the tooth abscessed and the side of her face began to experience swelling.  Even then, she was reluctant to go to the dentist.  Finally a couple of friends sat her down and made her start calling dentists until she found one that didn’t completely unnerve her.  She finally found that one.  She showed up for her first appointment, and before she even let the dentist take an x-ray, she went over her history with dentists and her subsequent fears.  The dentist thankfully listened to Jill’s concerns and then mapped out a plan with her to fix her dental issues….which of course involved a root canal and great deal of relaxation gas. If my friend, Jill, had sought out a new dentist earlier, she would have only been out the cost of a cavity filling.  The delay cost her about $800.00 more with the added expense of a root canal.

Many people equate bankruptcy with the same level of discomfort as going to the dentist.  People will, with completely honorable intentions, take extreme measures to avoid even the very topic of bankruptcy.  Wanting to repay what they owe a credit card company, they will tap into their IRA and or ROTHs.  Unfortunately, the early withdrawal will cause the person to incur penalties with the IRS.  This results in another debt obligation to the IRS.  When this debt management attempt and other similar attempts fail, they finally cave into the bankruptcy discussion only to find the situation is worse than what they had originally dreaded—- because the tax debt they incurred in the process is not dischargeable in bankruptcy.  Just like the bad cavity, delay and avoidance only make the financial stress worse in the long run.  If they had sought more information up front, they would have learned that the credit card debt could have been discharged in the bankruptcy process without incurring added penalties or sacrificing their retirement.

Bankruptcy is not an easy topic for most people.  We understand that discomfort at Allmand and Lee.  That is why one of our first goals is to help you feel comfortable with the process and what our firm represents.  We can be better advocates because this is what we are committed to doing.  We try to provide you as much information personally and through our website, up front, so that you can walk into our office and have a good discussion about what is affecting your decision to file or not to file for bankruptcy.  And just like Jill’s new dentist, we try to work with your situation so that we come up with the best plan for you with the least amount of discomfort to you or your family.