FROM THE LEGAL PAD
Debts...And More Debts!*
There are some people who will
not pay their just debts and have no intention of doing so. These
people are often referred to as "deadbeats", and, even if they had a pocket
full of money, could
think of a dozen reasons why none of it should be used to pay their
creditors. However, these people are the exception and not the rule.
The vast majority of people enter
into installment contracts and loan agreements with every good faith intention
of meeting the obligation in full and on time. However, some of them
just do not have the ability to manage money. Others, because of
medical emergencies or job lay-offs, get into financial situations where
there is just no way for them to pay current monthly bills and still meet
their normal family living expenses. Many find themselves in a position
where they and other family members are actually afraid to answer their
telephone because of bill collectors demanding money.
Regardless of the reason for the
loss of control of his or her financial well being, the debtor generally
suffers strong feelings of frustration, shame and impotence over his or
her loss of control of his financial environment. Depression and
a tendency to refuse to face the seriousness of the problem generally follows.
A debtor will attempt to make promises that realistically he cannot keep,
although he hopes that "something will come up" to enable him to do so.
It is necessary that the debtor realize that something must be done immediately
or watch his entire financial life come tumbling down on top of him.
If in this situation there are
several alternatives that a person should examine. Is the debtor
overburdened with debt or is his or her income just temporarily down so
as to prevent him from
servicing his debt for a short while because of sickness or temporary
layoff? In this case the best course would probably be for he or
she to individually contact each creditor and explain the situation, how
long he or she expect to be temporarily "short" and what payments can be
made in the short term to show "good faith". If his or her
situation is truly temporary and the debtor has a good payment record with
the creditors, he or she should meet with a cooperative attitude on the
part of the individual creditors. They make their profit by lending
money or financing purchases and will want to keep the debtor as a customer
if he or she has always been a good customer in the past. He or she
might also want to talk to a local consumer credit counseling service and
get any suggestions that they might have. My experience has been
that they do a good job in certain type situations where the creditors
are all willing to cooperate.
I am assuming that the situation
is such that the debtor is still working with the primary creditor and
no bills have been turned over to a third party collection department
or agency. If the debtor has reached this point then it may be too
late as he or she is probably so far behind that no one believes that the
debtor's situation is only temporary.
Since most professional collectors
with private collection agencies work on commission and probably are working
on a "quota" they know that the debtor is going to pay that creditor that
is
"pushing" the hardest. Therefor, if in this situation, he or
she can expect to be intimidated and threatened into making promises of
immediate payment. This is the way that the collection agency
makes its money, and the way that the individual collector keeps his
or her job.
If no answer presents itself through
any of the forgoing then it may be necessary for he or she to consult an
attorney in the area of bankruptcy and debtor's rights. Do not confuse
this with "creditor's rights" as the terms are mutually exclusive although
many lawyers work both sides of the fence. There is nothing unethical
about a lawyer working on either side so long as it is not done on the
same case! However, in my opinion, there is or should be a certain
philosophy concerning debtor and creditor
representation, and because it is difficult for some lawyers to "switch
gears", there are some bankruptcy lawyers that primarily represent debtors
and others that primarily represent creditors.
Bankruptcy is a specialty of law
practiced in the United States Bankruptcy Court. The bankruptcy Code
is Federal law and the Bankruptcy Court is a Federal Court. Bankruptcy
law is not
more difficult than any other area of law, but it is very different,
and the debtor should take care that he or she has a lawyer who is familiar
with this area. When the debtor calls to make the appointment with
the attorney, his office should be asked if there is anything that should
be brought or any particular format for the information that is needed
as this can save a lot of time in getting the debtor's financial situation
analyzed by the attorney. (Copyright 1987, Homer M. Scarborough,
Jr.)
* The opinions expressed in From the
Legal Pad are based on the laws of Georgia in force at the time of
the Copyright notice, and are not intended in any way to replace the neccessity
and need of conferring with a private attorney as to the laws existing
in your State and jurisdication. Further, each situation is unique
and the opinions herein are are general.
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