When Should You Contact a Bankruptcy Attorney for Your Case?

Join us as we sit down with Bankruptcy Attorney, Darin Wisehart, to discuss the warning signs that indicate it might be time to consult with a bankruptcy attorney. Rather than focusing on the technical aspects of bankruptcy law, the conversation centers on practical indicators such as mounting credit card debt, missing payments, borrowing from retirement accounts, and the mental health toll of
financial stress. Darren emphasizes that initial consultations are typically free and that reaching out early—before a financial crisis becomes unmanageable—is always better than waiting. The episode provides valuable guidance for anyone wondering whether their financial situation warrants professional legal advice.

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Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.

Transcript

Speaker 1  00:00:01

Welcome to Modern Family Matters, a podcast devoted to exploring family law topics that matter most to you, covering a wide range of legal, personal, and family law matters. With expert analysis from skilled attorneys and professional guests, we hope that our podcast provides answers, clarity, and guidance towards a better tomorrow for you and your family. Here's your host, Steve Titian.

Speaker 2  00:00:32

Hi everyone. I'm Steve Altishin, director of Client Partnerships here at Pacific Cascade Legal. Today we have bankruptcy attorney Darin Wisehart to talk to us about when you should talk to a bankruptcy attorney. Hey Darin, how you doing today?

Speaker 3  00:00:47

I'm good, I'm good. Thanks for having me today.

Speaker 2  00:00:50

Oh, thanks for doing this. This is a, I really like this topic and 'cause it kind of talks really about, you know, not the law itself, but about warning signs that you may find yourself in and make you think, should I talk to an attorney? Should I not? So I really like that and, but so let's just kinda start not every single debt or having that means you talk to an attorney, but there are some signs aren't there when you actually probably should. No

Speaker 3  00:01:20

Doubt about it. A lot of those signs have to do with, I mean, obviously if you're starting to think about talking to an attorney, sometimes just that first tier is a good idea to start thinking about reaching out. Obviously, you know, there's some some hurdles that you wanna jump before you decide to start making those calls because it's time consuming. And you know, attorneys a lot of times in the bankruptcy field, a little more, I think, willing than some of the legal fields that we have. They're more willing to talk to you for that 20 minutes for free, just to consult you just to kind of get you on the right path of when that timing is gonna be. Right. So yeah, the warning signs are, are definitely there and they have to do mostly with just the debts being in a certain spot or certain type of debts. There's different categories where you really want to have a neon sign to say, this is the time, so let's, let's talk to an attorney now.

Speaker 2  00:02:07

I like that. Well, let's, let's talk about, I think one of those neon signs. It's lot of people in bankruptcy have these issues. It's credit cards and bills.

Speaker 3  00:02:16

Yeah. And when you talk about credit cards and bills, when you're talking about how much, everybody always wants to ask me, well, how much? And I, and my answer is always sort of a legal answer. And it has to be, it has to be something to the effect of it's relative. Because if you're making a hundred grand a year, then having $50,000 of debt is a pretty sizable chunk of change to pay back. And, and the statement that I usually make where it's not necessarily a benchmark, but it's an idea that I like to give to clients, is, if it's gonna take you longer than three years to chop this money away, then it might be a really good idea to look at what bankruptcy can do for you. Now it always, it doesn't always work, right, because maybe you have some other things that play into your situation that bankruptcy might not be the right fit, but at least then you, you reach out and talk to somebody, try to get that solution and whether or not it's gonna, it's gonna work for you.

Speaker 3  00:03:04

And I think that's, that's the big one. Now, you know, you can always talk about if, if your debt continues to grow, if you, if you have your minimum payments or really you're really struggling to make those minimum payments, then the question is even more amplified. It's more important for you because you can't make the monthly bills. If it's a question between food and paying Capital one, then of course looking at bankruptcy is a good move because now you know, yes, you're gonna go through the negative of bankruptcy. So it's got some negatives with it, but at least you can make sure that food's on the table for your children or things like that. That's, I think it goes without saying to say that that's way more important than making sure Chase gets their money.

Speaker 2  00:03:43

Yeah. What about borrowing to pay a debt, go and do another debt to pay another debt?

Speaker 3  00:03:51

Yeah. And now we're talking about the cycle of debt, right? So when we have a big cycle, we, you, you borrow the money, you use the money, you need more money now you borrow more money. And there's a, you know, there's a couple of really famous training scales for these collection and payday loan type companies that, that have been released in discovery for lawsuits where they, they have this in the training where they know that it's gonna be the circle of, of how things go. If you're borrowing typically to pay off the other creditors, that's, that's a real good sign that it, it might be a good idea to get out of that cycle. And the, one of the main ways to do it is bankruptcy. There's, there's a few ways to do it. Of course you can do reading online on how to get outta that cycle, but getting some type of finality, some type of, Hey, how do we get on a path to closing this situation? Instead of just, well now we gotta take a new one, now we gotta take a new one. We gotta continue doing that. That's certainly one of those methods that you wanna use to, we should reach out and talk to an attorney. Is this gonna be a good idea?

Speaker 2  00:04:50

Yeah. What about a lot of people, they don't consider it a loan, 'cause technically it is, but kind of borrowing from yourself, like reaching out and taking money from your 401k your ira.

Speaker 3  00:05:04

Now, anytime you talk about doing that, you want to talk to an attorney before you do anything like that because in in bankruptcy world and in non bankruptcy world, there's a lot of accounts, there's a lot of things that hold money that may be protected in bankruptcy that you don't necessarily have to worry about them going anywhere. And 401k is a pretty solid protected account for the most part. Now it's not perfect, but for the most part it's gonna be a safe area to hold money if you pull money out of it. Now there's a question of whether or not that money is accessible or all of the different things that come in. I always like it when people call me to say, I'm thinking about bankruptcy as an option. I have the money in the 401k, but that's my retirement. Uh, you know, they always gimme their age.

Speaker 3  00:05:47

You know, I'm 45 years old, I don't wanna lose this nest egg that I've really worked hard to build. And I say, you're absolutely right to do that. Do not lose your nest egg. You know, don't, don't lose that 401k before you speak with an attorney. Because if that's the only thing you have, a lot of times if a chapter seven or a chapter 13 will fit, an attorney can keep that money protected by putting what's called an exemption over it. And, and that, you know, that's valuable for you because that means in 20 years when you're looking to retire, you've got that chunk of money there. Instead of pulling it out now and starting that process over. Uh, you don't have to move all the way back to square one. It's an important time to talk to that attorney.

Speaker 2  00:06:27

Oh, that's, that's a huge, huge thing. Let's move on to just missing payments. Not being able to make some payments. Is that sort of an indicator or when it become, does it become an indicator of maybe giving you a call?

Speaker 3  00:06:43

Yeah, about the same thing. Uh, you're talking about the same thing as maybe you're really struggling to make the payments. You're really having a hard time with your monthly budget. And that's the minimums that start to stack up. They start to add up little at a time and or, or sometimes, you know, a lot of the time, uh, depending on where they are, but if you're missing payments, you definitely wanna reach out before you start or as you start missing payments because in different categories, uh, different debts are treated differently in bankruptcy. And I think in real life they'd be treated differently as well. And the way I like to analyze it is what's gonna happen if you don't file? How does that go and how can you work your way out potentially? What's your best path? And if you do file, these are the categories that everything kind of runs into.

Speaker 3  00:07:27

And so analyzing it in that way kind of tells you which category I always call 'em cubby holes when I'm talking about

bankruptcy. Which cubby hole does that debt go into? And we're talking about, you know, people who say, well, I can't make my house payment because I need to pay the minimums on these credit cards 'cause they're gonna come after me if I don't pay them. Whereas my house might take four or five, six months to get to foreclosure and it might take another year. Now, in my mind, the house, if you wanna stay in it, is way more important than the credit cards. And that's, that's just because, you know, people don't call me to lose the place that they live at. Yeah. They, they call me because they want to get out of that unsecured debt solution. You know, they want a solution there. And it's not always the same thing, but it does have a lot to do with what's more important and which cubby hole is it gonna go into.

Speaker 2  00:08:15

It's, we've sort of kind of hit this, but just in general, are there indicators about your borrowing habit? I mean, when you're making decisions to borrow or where from?

Speaker 3  00:08:29

It definitely can. I mean, if you're starting to look at the, uh, and I to to use a couple of the names, the lending clubs and the upstarts, the personal loans that come online, um, usually that's, that's before you take that loan. It might be a decent time to talk with the attorney. Now of course, if you need that loan to survive, that's, you know, you need that loan to survive. That's it. That's, that's the conversation. But if you're thinking, Hey, we can divert some of this. Maybe we take a zero interest credit card and pay it off, uh, pay off, pay all our, the, our cards and then put it on this one card with a 0% that will be there for six months, then that could be a time to say we're basically robbing Peter to pay Paul. Right. So we're, we're doing the, just the moving the money around and that's, that's time to start talking with a bankruptcy attorney because that's part of that cycle of, you know, you're really not you, you're not curing the problem you're doing.

Speaker 3  00:09:24

What's more of kick the can down the road and maybe the income goes up. Hopefully it does, you know, all of those things can happen in the real world to help you, but maybe it's time to just chat through what that situation is. Especially because when you call a bankruptcy attorney, it doesn't mean you're filing. Right. It doesn't mean you have to file that next day or any of that kind of thing. You know, most good bankruptcy attorneys, especially in my area, uh, they're not gonna push you into filing. It's not a sales call. They're just gonna give you those options of this is what it can do for you and this is how, you know, you might be able to work through your situation with this path. And they give you the option to say, is it the right fit for me? Is it something we should do as a family?

Speaker 2  00:10:05

Yeah. And, and just kinda what it halt, just for a second and reiterate something you had said, if I call, you know, watching this and thinking to myself, well, I can't afford my visa payment. How can I afford to talk to you? Hmm. What would you say?

Speaker 3  00:10:22

Easy. I got an answer for that, that I've had my entire career. If you think I'm gonna take money from you and you meet with me, don't bring your wallet. 'cause I don't charge a dollar for meetings with me when it, when we're talking consults, I don't charge a dollar until we know which way is right for you and you've decided that's the right path. Okay? So there is no, I'm not gonna give you a fee agreement that first day. I'm not gonna say, Hey, there's gonna be zero pressure. I love no pressure because this is your life. This is, this is the path that's gonna get you to the best spot. And if that's the path, then that's the fitting path, but I wanna be with you not pushing you. That's, that's kind of how I always look at it. So if you think I'm gonna charge you anything, then don't ever, you know, don't bring anything. Just bring yourself and we'll talk through your situation and at the end of the 30 minutes, you know, you'll have a really good idea what bankruptcy can do and you'll probably have a better idea what other paths are available to you too, so that you're more educated on how to deal with what you're, what situation you're in.

Speaker 2  00:11:23

Yep. Uh, so that's so important to know and, and can help people at least get some relief from that. Mm-hmm <affirmative>. So let's talk about what I think is probably a pretty big indicator, uh, legal action when that starts happening. Yeah.

Speaker 3  00:11:43

And this, this is the time when you get the knock on the door and you get the document. And I have these conversations with people weekly, uh, pretty much every week of my career I have conversations where they'll say, I just got served this, or they'll give me this one too. I hear this all the time. Well, I heard that, you know, the document was there and somebody said this and there was something there. And they always try to tell me, but I didn't get served and they're probably right. But at the end of the day, if you're calling me about it, you probably knew about it. And you wanna make sure you talk as soon as you get that thing because you don't know what a creditor might be doing in the background. And some of the creditors, we have a lot of good creditors that are, that are pretty ethical in our state, but we know creditors and, you know, some of 'em may or may not play by the rules.

Speaker 3  00:12:27

We don't want to judgment to hit before we have a chance to talk about the situation. Yeah. And that's, that's key. So as soon as you know something is there, as soon as you get served something, somebody knocks on your door, uh, you can give me whatever story. I usually don't want to hear it too much because, oh, I didn't sign it though, so I didn't get served. Um, all of those things happen, um, but you know, that judgment is coming and that's a time to talk to the attorney because judgments are different for people who own houses. Judgments are different for people who have jobs that can be garnished, bank accounts that can have money taken from them. Those are common things that happen once a judgment comes in and you know, you wanna make sure you're dealing with those head on rather than hoping for the best. You don't wanna be hoping for the best.

Speaker 2  00:13:15

And I guess that includes, and because Texas are a weird, kind of a weird area because it is so specific and so complex. But I would say in general, you know, if they're also having a legal action against you, it might be a good time to at least talk to you.

Speaker 3  00:13:34

No doubt. And typically when it comes to taxes, um, I mean, most people kind of sit on it for a while and they have this, this idea that they know they have to take care of it, but they only really do it once the burner starts to heat up. And the IRS uh, in the last couple of years has been okay to go to use private collection companies to collect their debts. So they're heating up. Um, our state Oregon definitely has that, uh, that idea of we're gonna collect right off the bat. We're not gonna wait. And, and so typically that's when people are calling me, but if you have, if you have a tax year that has a significant tax debt and you can't pay, it might be a good I good time to talk with a bankruptcy attorney. Now, a lot of times bankruptcy might not be your best path and it depends on how much and what year and you know, where you are with your finances in general. But all of that is that play together of, I gotta juggle, you know, three or four things. And taxes usually is one of those things that can get behind and, and it can just continue to build. And you wanna make sure you speak with somebody that, that deals with taxes, but also deals with bankruptcy so that they can give you what options you have and what a, you know, what a blueprint might look like to take care of this debt down the road.

Speaker 2  00:14:46

We talked about, you know, like not going into your 401k for various reasons, but in general can worry be worried about your retirement, be a reason to at least talk to you because, you know, retirement is sort of the stuff that you're like banking on.

Speaker 3  00:15:11

Absolutely. And you wanna make sure that you're reaching out before you touch it. And that's with a loan as well. Not just a, you know, pulling money out or talking to your tax person about what penalties you're gonna have if you do pull from it. All of the different things that have to do with 4 0 1 Ks, it's you borrowing from yourself if you take a 401k loan, and of course you're paying somebody else to borrow from yourself. So it's kind of an interestingly funny conundrum, but if you're in the situation of looking at that money and thinking, I need to pay debts with it, then that's, that's a good time to say, let me make a call to a bankruptcy attorney or two, get an opinion on how I might work my way out of this situation before I touch that money, before I move that money.

Speaker 3  00:15:52

And this happens a lot when people change jobs. People will change jobs and then they'll, they'll have a 401k that gets

liquidated and the the option is to roll it into another 401k, keep it completely protected, or to pull the money and then maybe down the road try to put it back into a 401k, but always better to leave it in a 401k, however you can and talk to somebody about the debt. And I'll talk you through, you know, where you're at or any bankruptcy attorney that does it, can talk through what it means and where you should keep it. Because that 401k is in a golden account as far as I'm concerned, as long as it stays there untouched. Yeah. And when people start taking money and doing things with it, that's when it starts adding questions about what to do, what, what can be done with the money.

Speaker 2  00:16:37

Yeah. This one is not really, I guess a legalistic kind of category, but when your mental health starts to deteriorate, when you know you can't sleep at night, I mean, that kinda stuff,

Speaker 3  00:16:52

The probably the most important thing that we're gonna say today in this, in in this conversation that we're having here, the mental health is, is always something that I add to every consult. And that is because I don't know every person. I am me. So I can understand me and I can understand how I work and I can understand a lot of clients. I've seen a lot of clients over my time, uh, of doing this. But I can't always attest to how the mental health is for the person on the other side of the phone or the person that's in the office looking at me at the desk now they start crying then I know psychologically they've really been weighed down by this issue. And, and that's something that, you know, if that's happening and if you really feel like you can't work your way out of it, definitely time, a hundred percent time to talk with a bankruptcy attorney because maybe they can find that way out way and get you the weight off of your shoulders moving on with life.

Speaker 3  00:17:43

And you know, I always tell people if you're in a situation where you're, you're kind of on the middle financially on whether it's a good move for you, my next question is, well, where are you personality wise? Are you able to say it's debt? I don't care about it. I live my life. I go ride my bike and have fun and I do my things. Okay, if you can do that, it's a different mindset then. Yeah, I'm losing sleep. I don't know where to go with this thing. I'm doing research at 3:00 AM because I can't, you know, I can't get a wink of sleep because I'm worried about it all the time. You definitely should reach out. And I'm saying if you're up at 3:00 AM schedule a call with an attorney at 8:30 AM so that you can get it off of your plate and at least get some type of, here's a path for you and here's your options.

Speaker 3  00:18:30

Um, that, that way you don't lose. I always tell people, don't take months off of your life. You know, this is most of the time, not always, but most of the time these financial situations are things that we just have to work our way around. And it shouldn't be taking time off of your life. You should be able to live your life and do your things and enjoy your children and enjoy your family. All the different things that you like to do that give you quality. You should still be able to do those things even if you have these financial things happening in the, in the banking side of your world. Yeah.

Speaker 2  00:19:02

Piggybacking right off of what you just said, let's just talk a little bit about how you as a, as a bankruptcy attorney can actually help. If someone gives you a call, what, what kind of things can you do? Well,

Speaker 3  00:19:17

Lots of things. Lots of things. And they, they all circle around the financial side of things. Right. And then they piggyback with other, other areas. But if you're behind on your house, then catching the house up and taking it out of the hands of the mortgage company and the people that are trying to foreclose. If you're behind on your HOA dues, you're significantly behind. And they're talking about foreclosure. Anytime somebody's talking about foreclosure, where you're gonna go without the home that you want to keep time to talk to a bankruptcy attorney, there's almost always paths that you can come up with that you get back to making the house good again. Okay. Um, if you're about to lose your car, if you're behind, uh, two or three months and you're talking about putting your car in somebody else's at somebody else's house so it doesn't get repoed, uh, but you know, you can pay for it.

Speaker 3  00:20:01

You just, you know, it might not be, this very moment. Might be time to talk with a bankruptcy attorney. You can, you can

work your way out tax debt if it's been building up for a lot of years, time to talk with a bankruptcy attorney. Credit card buildup, you know, the normal medical debt. Medical debt usually is a little different category 'cause they don't always come after you like a credit card would if you default. And so typically if it's adding up and it's over 20 grand, probably a good move to talk with a bankruptcy attorney before you, you go pay 'em or try to settle 'em. Um, really anything you're looking to settle, that's a significant debt. If you get a business that went south and those debts, you know, you personally guaranteed some of them, those are really good times to talk with a bankruptcy attorney because they may, one of those debts may be coming after you and they may get a judgment and then garnish wages or garnish your bank account. And you want to just try to make sure that you limit the negative if you're going the wrong direction with those things and get it moving in the right direction. Again, they'll be surprised at how quickly, you know, most situations I can come up with a blueprint to get you to where you're able to look at things and say, yeah, I see light at the end of that tunnel again.

Speaker 2  00:21:11

That's the answer. It's, it's, there's so much negativity that people put on themselves mm-hmm <affirmative>. It seems like when they're going to thinking about bankruptcy, like, I'm a failure, I'm ashamed to do this, but, but you know, just by hearing you today, you know, you talk about that, that's not true. It's, it's something that gets you back to your life.

Speaker 3 00:21:35 Yeah.

Speaker 2 00:21:37 Yeah. I love that.

Speaker 3  00:21:38

You're really, you're really just trying to turn it to, let's just get it back to that positive side. And, and, you know, the things that I deal with, people always talk to me, they don't understand it, and I say it can pretty much happen to anybody. And this is just something that, you know, as life goes, we always have to deal with something. If it's not one problem, it'll be another problem. And you do the best you can with them. And when people call, my goal is to put myself right where they are and I know what I know, which is the bankruptcy and the financial side of things. How do I get 'em to that better spot? How do you know what's our blueprint to get 'em to where we need to go? And I think that's what a lot of my clients appreciate about, you know, getting into the path and feeling like they have weight lifted from their shoulders because we're coming up with a plan and it's not always perfect. The bankruptcy is not designed to be perfect. It's not designed to be a boom, we're done. You know, that type of thing. It's, they give you hurdles, but at least it gives you the path of this is how to get there. Let's, let's try to work together to get there. Yeah.

Speaker 2  00:22:36

And I, and I love that, you know, getting to a better spot because like you say, it's not perfect. It may not be the greatest thing, but there's always a better spot mm-hmm

Speaker 3  00:22:46

<affirmative>.

Speaker 2  00:22:47

To get to. I mean, you know, it's, and that's how you, what you hope 'em do. Wow. I love that we have blown through our time as we usually do. And I just really wanna thank you for talking about this particular subject. And when the heck should I pick up the phone and call a bankruptcy attorney? Because it's something people are reluctant to do, aren't sure attorney's gonna say, well, well, what the hell are you calling me for? That's not what you, you talk about, you talk about these are real reasons and the first thing to do is call you. Not the last thing to do is call you.

Speaker 3  00:23:24

Yep. Earlier was always better. And I never said, what the heck are you calling me about? Uh, I've always said, well, okay, well maybe you don't have something if we, if we're talking, but most of the time you do if you're thinking about it.

Speaker 2  00:23:36

Yeah. Yeah. Well, again, thank you so much. Mm-hmm

Speaker 3  00:23:41

<affirmative>. Sure. Thank you.

Speaker 2  00:23:43

Everyone else, thank you for joining us. If anyone has any further questions on today's topic, you can post it here. We can po we can get you connected with Darren and try to get you in your better spot. So until next time, stay safe, stay happy, and be well.

Speaker 1  00:24:01

This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Lander Home Family Law, and Pacific Cascade Family Law, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites@landerhomelaw.com or pacific cascade family law.com. You can also call our headquarters at five oh three two two seven zero two hundred to schedule a case evaluation with one of our seasoned attorneys, modern Family Matters, advocating for your better tomorrow, and offering legal solutions important to the modern family.