The Road Out of Debt: Bankruptcy and Other Solutions to Your Financial Problems

Chapter 16. Understanding the Bankruptcy Process

Fear makes the wolf bigger than he is.

—German proverb

Some years are better than others. The year 2008 was especially bad for Ron Jacobs. When the year began, Ron was enjoying a flourishing career in medical sales that supported his caring family and a fairly modest house. But then, unexpectedly, Ron became a casualty of the economic downturn that hit medical sales hard and he lost his job. Soon after, one of Ron's daughters broke her leg. Ron still had insurance but it didn't cover all of the hospital bills or any of the rehabilitation.

After a few months, Ron's wife, Sally, started working part-time. But Ron's unemployment benefits, their savings, and Sally's income could not cover the mortgage, medical bills, and the rest of their monthly bills. They decided to work together to keep their lives as normal as possible. The family set a budget that covered the bare necessities and Ron called all their lenders. Even after a couple of lenders made arrangements, they could not pay their mortgage. Despite the couple's pleas, the mortgage lender was proceeding with a foreclosure on the family home.

As the day of the auction approached, Ron and Sally were growing desperate and depressed at the thought of being forced to move from the house where their children were so comfortable. They feared the worst. But after talking to a lawyer and learning how bankruptcy could help them, they decided to fight a little more. On the eve of the foreclosure ...