Bankrupt!
by Philip Goutell

© 2023 Philip Goutell

In the end it was all pretty silly and perhaps someone else came out worse than I did, a police detective no less, but at the beginning it was upsetting and scary.

I owed money, lots of money, to a variety of people. And I didn't have the means to pay any of them. The cash cow had died. The well had dried up. Circumstances.

With a few exceptions the people I owed money to were not bugging me over it. We had done a lot of business together and now that business was gone. Vanished. They mostly guessed that I wasn't able to pay them and didn't have the desire to squeeze milk out of a stone, so those debts were on hold, hovering over my head but not threatening. But credit card companies are different. They never give up.

After trying for months to collect what they are owed, they sell the debt to third parties who try to collect for a while and, if they can't, sell it to "forth" parties. As the debt goes down the line it is, of course, generally more uncollectable unless the debtor's circumstances change. That can happen and, if it does, what seemed to be uncollectable, can be collected, perhaps in part, perhaps even in whole. After all, "company the fourth" bought the debt and will be losers if nothing gets collected. So they push.

I got hit with the push. A summons with a red seal on it to bring me into court on someone's notion that this would get the unpayable paid. I had been getting dragged through legal stuff for a number of years (which is why I was sitting with so many unpaid bills) but a summons with a red seal was serious. It called for action, quick action.

I wasn't prepared to go into court and confront whatever that involved so I wanted to head it off, make things happen when they were somewhat under my control. I guessed the red seal summons could result in a lien or seizure of some assets. And beyond what was owed to the credit card company on the credit card, there would likely be significant penalties and fees added. Not good.

Bankruptcy had been on my mind for several years. I had been holding my head above water but just barely. I wasn't making any progress and I had been thinking it would be nice to buy a house some day, I certainly wouldn't be able to do it with all this debt hanging over my head. But until the red seal summons came along, nobody was pushing. Perhaps it was time to (quickly) look into bankruptcy. Perhaps I should have done it months ago.

How do you go about it? I responded to a small ad in our local penny saver.

Edgar Wiley was sympathetic and professional. His flat fee for a bankruptcy was $700, something I could afford. He directed me to round up all the papers, all the people I owned money to, so everything would be included in the filing. You can't pick and choose.

Now there were a few complications. I had recently bought a commercial building and I owned and needed a car. My understanding was that your assets, with possibly a few exception, get seized to pay off the creditors. If I drove to court, would I be walking home? But if I no longer had the office building, maybe I wouldn't need the car. These were, for me, very unpleasant thoughts.

Now the funny thing with the building — three structures on just over an acre of land — it was purchased on a promised and no money down, a problem for the seller when he had to clear up some taxes at the closing. The lawyer who handled the transaction for me strongly suggested that I buy the building in the name of a corporation rather than as an individual. I was surprised that the seller, in addition to getting no money at the closing, would consent to this, but he did. He was pretty eager to unload the property. Now

what would happen in a bankruptcy? I was running what was left of my business out of the main building.

My bankruptcy lawyer was aware of the several corporation I owned. He had me bring the stock certificated to the hearing.

I won't pretend I wasn't nervous about the hearing: Federal Court across the river. On the day of the hearing I met my lawyer at the courthouse. He was certainly calm about the proceedings even if I wasn't. We weren't the first case on the docket. From my seat I could see and hear all that was going on. One person ahead of us was a mechanic. I don't recall what he owed and to whom but the creditor had his representative in court. The guy's assets appear to have been the tools he needed to work as a mechanic and that's what they took from him. Where was this going to leave me?

But, as cases were called, few debtors had their creditors showing up to state their claims; no one after them in hot pursuit.

As might be expected, there were a number of lawyers in the court. They were generally dressed as lawyers, suit and tie, but cheaper suits and ties than those worn by lawyers I had worked with in the past. My lawyer wore a cardigan sweater. No suit or tie.

When our turn came the magistrate addressed my lawyer in a friendly manner and asked about his health. I didn't know it but my lawyer was living on borrowed time and would be dead in four years. He had already suffered a personal tragedy, the death of his daughter, a well loved lawyer in the area who had been in practice with him.

When asked about my assets, my lawyer kind of waved my stock certificates in front of the judge with the explanation that they didn't amount to anything. The judge dismissed them with a wave of his hand. I left the courthouse with all the assets I had when we had arrived. As I recall, I was a little stunned and confused. All the debts gone? Just like that? No one making a fuss over it?

Some time later I learned what had probably happened and why I had suddenly gotten the red seal summons to appear in court. A detective with a local police department was moonlighting with a collection agency. Using the police department's computer, he was tracking down local debtors for a collection agency. Of course this was all against the rules and regulations. When he was found out he was given the choice of having charges filed against him and risking jail, a fine, and loss of job and pension — or he could quietly "retire" and keep his pension. Rather than get his own red seal summons he chose to take the money and go. So much for Dick Tracy.