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Chapter 13 in 13 Chapters
[by William J. McLeod] is the essential reference guide that chapter 13 attorneys should have at their fingertips to assist in their practice and to share with clients to help explain the bankruptcy process.
American Bankruptcy Institute
“I Need to Get Through the Winter”
For weeks I have wondered what impact the high price of home heating oil was going to have on people who need it. Would it push them into bankruptcy (or worse)? Since it is usually an accumulation of things that leads one to file bankruptcy, there is no clear way I can predict that the price of oil is going to push people over the financial edge. But last week, I spoke with a client who found himself standing on the proverbial financial precipice, and it was that realization that lead them to think about filing bankruptcy.
The client recently ended a long term relationship. As many of us know, it is far cheaper for two people to live under the same roof than it is for one. The household income had dropped, and every day expenses increased. There was also some debt that continued to linger such as credit cards and consolidation loans. While he was paying a modest rent (less than $1,000 per month), it did not include the price of home heating oil.
To meet his obligations, the client did what many people do: he decreased expenses. However, he did so to the detriment of his health. A few years ago, he underwent a gastric by-pass. Instead of buying the protein and vegetables that his doctor expected him to eat (and that frankly, we all need to eat), he was instead eating the less expensive pasta and starch that he should not be eating.
Since it’s July, his oil use in the summer is limited to heating the hot water, and just ½ tank (100 gallons) can get him through most of the summer. But from December through April, it is not uncommon for his tank to be filled at least once per month. What prompted him to call me was that when he got his summer oil delivery last month, that 100 gallons cost him $429.
Making things more difficult: many (if not all) oil companies are refusing to lock in prices or offer budget plans.
The client realizes that unless the other debt is somehow compromised, he either will not be able to heat his apartment, or his other creditors will not get paid. In other words, he sees that at some point, a choice will need to be made. Without the debt, the client could get through the winter assuming that that there are no dramatic increases in the prices. And it is this scenario that causes me to ponder this: “how many other people are wondering how they are going to do it?”
It’s not an easy question I can answer. However, for this client, who is struggling with the increasing prices on consumer goods and debt, and facing a cold and expensive winter, he has answered that question by considering bankruptcy. For him, it might be the only way to get through the winter.
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Tags: Bankruptcy, Chapter 13, Chapter 7, Commentary - Legal
This entry was posted on Monday, July 7th, 2008 at 7:13 am and is filed under Bankruptcy, Chapter 13, Chapter 7. You can follow any responses to this entry through the RSS 2.0 comment feed.
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