Why Do People Tend to Delay Filing for Bankruptcy?

Interviewer: Then, some people might see it as they have to file their personal bankruptcy and then maybe they have a business and they have to do file for that. Some people might worry about that but what are the most common reasons that you find people take so long to decide to file bankruptcy or just avoid doing it altogether?

Vance: Very simply, pride.

Interviewer: Pride?

Many People are Simply Embarrassed about Their Financial Situation

Vance: It's embarrassing. Most people come in and say, "Look, I was raised that if you incur the debt and you have to pay back what you owe," so it's pride and embarrassment that prevents people from filing bankruptcy.

Bankruptcy Filing Is Public Record but the Information Is Rarely Sought after and Is Likely to Remain Private

Many are afraid that their neighbors may find out or their family may find out but I tell them, it's not published. It is public record and anybody can go down to the courthouse and ask to see their file and see all their information but how often would an individual do that?

Most of the time, it's not published in the newspaper and you can't access it on the internet. It will show up in your credit report. It is pretty hard for people to find out that you filed bankruptcy. Now, in a Chapter 13 in this district, the Chapter 13 trustee does require that if you're a W-2 employee, that your payment be submitted by payroll deduction for the simple fact that he said he found that people are more successful in completing their payment plans if the payment is automatically deducted.

Interviewer: Then, the only person you really have to worry about finding out is your employer but they're not really going to cause any trouble for you at work.

Bankruptcy Is Not a Unique Situation: Most Probably There Are People in Your Acquaintance That Have Filed for Bankruptcy

Vance: No, not at all. If you are an employer and you are working for a company that has over 100 employees, I can guarantee there's somebody else in Chapter 13.

Interviewer: Oh, so you could be sitting next to someone at work that has filed a bankruptcy as well and you just feel like you're the only one, but as you said, there could be more people at your place of employment that have filed for bankruptcy.

Vance: People come in and they always say, "Am I the only one?" and I tell them, "Look, this is all I do, okay? If you think you're the only one," I said, "You're really mistaken because my practice is quite busy."

There are some days, I don't know which way to turn, and I am so busy. I say, "No, I can guarantee you're not the only one because this is all I do."

Interviewer: You wouldn't be as successful as you are if you had so few clients.

Vance: That's exactly right.