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Awhile back, my practice went from boom to bust. One day I had a staff of 14 people, the next I was sitting alone at a desk in 2,500 square feet of prime downtown Manhattan office space.
At the time, I considered myself a failure. Looking back on it, I realize that I couldn’t have been further from the truth.
My office, prior to the collapse, was making a ton of money – but all of it was going out the door in overhead. My clients weren’t disappointed, but they sure weren’t thrilled with the service we were giving.
On paper, things looked great. And when I sent everyone home, things looked pretty bleak.
If you’re on the verge of filing for bankruptcy – or if you just filed – you probably feel like a failure too.
And like me, you’re wrong.  Here’s why.

What’s The Financial Definition Of Failure?
According to Wikipedia, failure is the state or condition of not meeting a desirable or intended objective.
If we’re talking about money, the desirable or intended objective is to have money in the bank and be able to meet your expenses on a monthly basis – ideally with a few bucks left over for a rainy day.
If you’re not in that position then you’re not meeting the desirable objective.
It Comes Down To A Moment
One minute you’re debt-free, and the next you’re submitting an application for a loan.
That’s the moment of financial failure. If it weren’t failure then you’d be in a position to do whatever you want to do without getting into debt.
That goes for cars and homes, credit cards and televisions. If you can’t pay for something by writing a check and you go ahead with the purchase, you’re putting yourself in the position of not meeting the desirable objective.
Reset The Failure Clock
When you get out of debt, you’re trying to achieve the desirable objective of having money left over at the end of the month. Once the debt is gone, you’re no longer required to make monthly payments towards that debt.
It’s not terribly unlike cutting your cell phone bill by $100 per month – in doing so, you free up more money to achieve your goals.
Of course, there are lots of ways to get out of debt.
There’s the slow an steady method of paying off your debts as quickly as possible. There’s the faster means of debt relief that involves filing for bankruptcy. And there are a host of options in between the two.
Does Bankruptcy Make You A Failure?
Bankruptcy isn’t failure because it doesn’t involve an inability to meet a desirable or intended objective.
If your objective is to get out of debt then bankruptcy is nothing more than a legal means to that end.
Whether that legal means to an end is right for you … well, that’s a question of your assets and your liabilities in light of your abilities.
Have the ability to repay your debts over some reasonable amount of time without sacrificing food, clothing, shelter or reasonable health care? If so, bankruptcy isn’t right for you because you haven’t failed – you’re meeting your desirable financial objective already.
If, however, you’ve already failed financially then finding a way out of debt – including filing for bankruptcy – may be something to consider.

Getting the outcome you deserve for your financial situation includes having the right legal representation in your corner.  Taking time to choose a good bankruptcy attorney may save you headache and frustration down the road.  Debtors have been known to choose an attorney based on an advertisement, price or claims in what they say you [...]

Death may be the end of the road for many, but if someone is in bankruptcy then the case can still go on.
What if your loved one has filed for bankruptcy and dies before the case is over?
Does the bankruptcy case disappear, or does it continue?
How does it affect the administration of the deceased person’s estate?
What if it’s a joint bankruptcy case – and the other person is still alive?
Nobody ever said death was easy …
If The Debtor Dies During Chapter 7 Bankruptcy
If someone files for bankruptcy and dies before the case is over, that bankruptcy can – or in some situation, must – continue.
Chapter 7 bankruptcy creates an estate as of the date of filing, and that estate contains all of the person’s debts and assets as of that date. There’s no right to dismiss a Chapter 7 bankruptcy without court permission, so the debtor doesn’t have control over whether to continue to dismiss the action.
If the meeting of creditors has been held and concluded, the case will continue through to discharge. The lawyer will need to ask the court to excuse the requirement of a financial management certification unless it’s been done.
Related:

• Basics of Chapter 7 Bankruptcy
• Chapter 7 Bankruptcy Timeline
• Overview Of The Meeting of Creditors

Things get thorny if the meeting of creditors hasn’t been held by the time the debtor dies.  The administrator of the probate estate (or, if there is none, the next-of-kin) needs to go to bankruptcy court and be appointed as what’s called a next friend. That will allow someone else to appear at the meeting of creditors on the debtor’s behalf.
If The Debtor Dies During Chapter 13 Bankruptcy
If a Chapter 13 bankruptcy case is pending while the debtor dies, there are two options:

1. dismiss the case; or
2. proceed in the same manner, so far as possible, as though the death had not occurred.

The problem here arises if the case is a joint bankruptcy – two spouses filing together.
If you filed for bankruptcy with your spouse, you can dismiss the case as to him or her only. Your bankruptcy case will continue, but your spouse will be dropped and dismissed.
Related:

• Chapter 13 Bankruptcy Basics
• Federal Rule of Bankruptcy Procedure 1016: Death or Incompetency of Debtor

Can A Spouse Continue A Chapter 13 Alone?
When spouses file a joint Chapter 13 bankruptcy case, both of their incomes are considered in determining the Plan payment and term.
With one spouse dead, however, the income scenario changes markedly.
If you’re in an active Chapter 13 bankruptcy case that you can’t afford anymore, here are some choices to consider with your lawyer:
First, Split The Case. When you file a joint bankruptcy case, i’s actually two separate cases that are filed under a single docket number and handled together.  You can split the case into one for you and the other for your spouse.
For The Deceased Spouse – Convert Or Seek A Hardship Discharge.  Depending on the reason for the Chapter 13 bankruptcy filing, you can either:

• convert your spouse’s case to one under Chapter 7; or
• request a hardship discharge.

For Your Chapter 13 – Continue, Dismiss, Convert, or Hardship. You can convert, dismiss your Chapter 13 bankruptcy case, or seek a hardship dismissal without splitting the case. But you can also make these moves independent of the deceased spouse.
For example, you can split the case and dismiss the spouse’s Chapter 13. Then you could continue your own Chapter 13.
Or split the case and convert your spouse’s case to one under Chapter 7. Then dismiss your case.
The options are complicated, and seemingly endless.
Death Can Be The End Of Bankruptcy – But It Doesn’t Have To Be
As you can tell, there are lots of options when it comes to handling death in the context of a bankruptcy case. It all depends on your goals, the debts and assets at issue, and how you can fit those facts into the context of the law.
Lucky for you, the law’s not nearly as inflexible as the Grim Reaper.

One of the reasons why debtors are highly encouraged to seek legal representation when filing bankruptcy is to ensure their case goes through the system in a proper manner while avoiding common pitfalls.  Filing on your own may seem simple enough  when you are able to download documents online, but many have no idea what [...]