One thing I remember this bankruptcy attorney telling me was a story his dad passed down to him which illustrates the "magic" of bankruptcy. It went like this: "The very second a bankruptcy petition is file-stamped by the court, a "magical" thing occurs. A type of umbrella comes down and completely covers the personal property of the debtor. No mortgage company, no bill collector, no creditor of any type, including the Sheriff can touch any personal property of the debtor. This type of protection is immediately invoked, just by file-stamping a typed document, called a bankruptcy petition."

This may not sound like such a "big deal" to some of you with deep-rooted negative feelings toward the field of bankruptcy law, but it illustrates an important point. Regardless of what job we are doing, we often do not stop to think what impact our actions cause to 100's or 1,000's of people. Just imagine the lives that are effected when a bankruptcy petition is filed. Every single creditor is affected as well as the life of the debtor filing for bankruptcy protection. In fact, not only is the debtor effected, but his/her family, his/her parents and all other close relatives who know about this event. Every single paralegal and every single attorney, plays a major role in changing people's personal lives regardless of the type of law we are involved in.

But bankruptcy law is a fascinating field because it involves a wide range of different areas of law. For instance, if a couple is divorced, one spouse may be paying child or spousal support, thereby affecting the income of the debtor filing bankruptcy. Therefore, a basic knowledge of divorce law is needed to prepare a bankruptcy petition. A bit of knowledge about tax law also is necessary when dealing with debtors, because many of them may owe federal, state or local taxes, which must be listed as an unsecured priority debt. Corporate law comes into play when preparing a Chapter 11 petition and criminal law comes into play when the debtor has been arrested and owes money for unpaid fines.

Also, bankruptcy law has two sides to it -- debtor and creditor. I prefer debtor law because I get to actually work with real consumers, whereby creditor law is basically filling out routine forms like a Motion for Relief From Stay and there is not any "real" contact with clients. However, in debtor law, I get to help the average consumer, the guy or gal who is down and out and needs help. It makes my day to know I prepared a wage garnishment notice to an employer to prevent him/her from garnishing our client's wages, who is barely existing on $150 per week. Nothing feels better to me than calling the electric company to get a client and her 3 children's lights back on so they can cook an evening meal. It's also a joy to me to have a client come back to the office, put their arms around me and tell me how thankful they are that creditors are no longer harassing them and their neighbors. Dealing with consumers provides me with the ability to exercise my psychological abilities and I in turn learn a great deal about people in general. Opps! Did we stumble upon another field in the bankruptcy law? Because we have to use psychology in dealing with clients, the medical field is a cross over field into bankruptcy law also. Imagine that?

Can you begin to see what I mean by the bankruptcy field of law being fascinating? Why then do most people make a bad face and say "ewe" when I mention the word "bankruptcy"? It's because filing for bankruptcy is still considered to be admitting the client was a failure. He or she did not properly plan financially and/or they kept buying everything on credit cards and because of their poor judgment, they are now in the financial position where they have to file bankruptcy. And because of this general negative opinion, people who know nothing about bankruptcy law will continue to say "ewe" until they are educated with the positive side.

I always tell clients in my intake interviews that it may be true that they made some bad judgments on the money they spent, but that was "then" and this is "now". I tell them they should be happy that the United States has a bankruptcy law. Many countries don't. Besides, the excusing of debts has been around since the time of Moses (5,000 years.) The Jewish law provided for a period, every 7 years, where all debts were excused and the slate wiped clean. The Jewish lawmakers knew that keeping people under heavy debt forever would only cause their overall economy to diminish. By excusing debts every 7 years, their economy grew because people had more money to put back into it's growth.

Secondly, I explain to clients that many large companies file for bankruptcy protection under Chapter 11. This is a process where a company pays back the debts, but does so at terms it can afford. Although the company must file a monthly statement with the court showing how much income the business received and the expenses incurred during that period, the business continues to run and is not closed down. Without a Chapter 11, millions of employees would lose their jobs and companies would close. The economy would be severely effected and eventually collapse. So you can easily see how important bankruptcy is to our daily lives. Every one of us would be effected if the bankruptcy law did not exist.

So the next time someone mentions the word "bankruptcy," don't be so quick to form a negative opinion. Think of it as an area of law that holds our lives together and keeps us functioning as a growing economy. Give bankruptcy law the credit it deserves and you will find it to be a fascinating field of law.

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Victoria Ring is a member of the Columbus Bar Association and serves on the Bankruptcy Law Committee. She also is a member of the Ohio State Bar, Paralegal Association of Central Ohio and The National Notary Association. Victoria has authored a book, "102 Things You Need to Know Before You File Bankruptcy" to help the average consumer understand the basics of bankruptcy as it applies to their lives. This ebook is available as a free download from Victoria's website at http://www.bankruptcyparalegalservices.com




Articles publish with permission from 123debt.com.