April was recognized as Financial Literacy Month in the U.S. and there were a roster of events shining a spotlight on the importance of economic and financial education.

Barrier Free Living’s programs (Secret Garden, Freedom House, BFL Apartments) offer a variety of financial literacy workshops and educational forums throughout the year for our tenants, residents and participants who are survivors of domestic violence with disabilities.

Our Freedom House domestic violence shelter works with The Shine Foundation, which holds regular financial literacy workshops for residents through the year (view a virtual tour of Freedom House here.)

The agency also launched a Financial Literacy Scholarship workshop in 2018 (funded by the Assurant Foundation) where tenants of our Barrier Free Living Apartment programs were able to pursue education and career scholarship funds after completing an 8-week intensive course (read more here).

This month’s special contributor Tina Tran (photo at bottom) shares her insights around domestic violence and debt below. Tina is the managing bankruptcy attorney at Upsolve. Upsolve is a legal aid non-profit that helps low income individuals and families file for bankruptcy free of cost.

Debt and domestic violence frequently go hand in hand. In an abusive or violent relationship, victims are coerced into incurring debt on the abuser’s behalf. Victims are put at risk for having credit card accounts opened in their name, and for being tricked into signing loan documents without their knowledge or consent.

What is Financial Abuse?

One common characteristic of a financially abusive partner is their desire to control the finances in a relationship. This is evidenced by the power they exert in efforts to coerce the other to quit their job, forcing them to make purchases without their consent, or deciding when and how the other can access ATM cards, credit cards, checkbooks, etc.

What are The Long-Term Effects?

A major consequence of this abusive behavior is a ruined credit rating. Low credit scores create barriers to obtaining housing, employment, and future credit. Domestic violence victims and survivors are so financially burdened that they are unable to become financially self-sufficient even after leaving an abusive relationship.

Many victims and survivors of domestic violence find themselves plagued with thousands of involuntary debts that they are unable to pay back. Few landlords will rent to a person with a low credit score. Similarly, employers now pull credit reports as part of the hiring process in addition to doing a background and criminal records check.

The ability to obtain future credit, purchase a home, or take out a loan becomes significantly more difficult with a low credit score. Bad credit not only prevents victims and survivors of domestic violence from being financially self-sufficient, but it also compromises their individual safety and the safety of their children.

It’s not difficult to understand why victims of domestic violence would return to an abusive relationship after an unsuccessful attempt to leave. Without the ability to obtain housing or employment, victims often feel that they are left with no other choice. Not to mention, they risk being sued by debt collectors who can garnish their wages once they DO find gainful employment.

Is There a Better Option?

Fortunately, there is. The United States Bankruptcy Code offers a way out for people struggling with overwhelming debt. Filing for bankruptcy continues to be stigmatized because of the misconception that petitioners and debtors are simply scam artists misusing the legal system. It’s not true.

While bankruptcy petitioners and debtors report having feelings of guilt and shame, the vast majority of people who file for bankruptcy do so in order to get a fresh start, or to free themselves of the financial burdens created by involuntary or coercive debt. Filing for bankruptcy is often the best option for people who have fallen on hard times due to illness, loss of employment, or divorce.

What are The Upsides to Filing for Bankruptcy?

 There are many benefits to filing for bankruptcy. One of the major benefits to filing for bankruptcy is the immediate relief you receive from all debt collection efforts, including the end of creditor calls and collection agency mail. All efforts to collect a debt from you stops as soon as you file for bankruptcy.

A second major benefit to bankruptcy is the wiping out of most types of debt. Debts that can be erased are debts from credit cards, medical bills, personal loans, lawsuits, and utility bills. Debts that cannot be erased are debts stemming from student loans, certain tax obligations, government penalties, child support and alimony payments.

Filing for bankruptcy can also improve your credit score if it’s already low. At the completion of your bankruptcy case, you will receive a discharge order erasing the debts that you owe. You’ll be given a chance to rebuild your credit once you receive your discharge order. One quick an easy way to do so is to obtain a secured credit card and to stick to your budget.

How Much Will It Cost Me?

There are a few different options you have when filing for bankruptcy. You can either file with a private attorney, a legal aid organization, or on your own. On average, private attorneys charge $2000 for their services. Legal aid organizations may also be able to fully represent you without requiring that you pay attorney fees. However, many legal aid organizations are only able to take on a limited number of cases due to the volume of requests they receive asking for help.

Filing on your own, or “pro se,” can be very intimidating and stressful. Thankfully, Upsolve exists. Upsolve is a non-profit organization that will help guide you through the process of filing bankruptcy on your own at no cost to you. If you have access to a computer or a phone, and a printer, filing for bankruptcy with the help of Upsolve’s guidance can be the most cost-effective way to file without sacrificing quality.