So far this year in Arizona, more than 12,000 people and businesses have filed for bankruptcy..

She is seeing a type of client that she hasn’t seen since the 1980s — the so-called “financially healthy” client.

“They can’t afford the consequences of all the real estate investments because the tax issues related to that, bankruptcy becomes their only way out,” said Drain.

Drain said many people are committing a cardinal sin by using their 401K’s to get by.

“Those are monies that are protected, so my stomach hurts when I see people take their retirement accounts and put it into a black hole called the credit card,” she said.

It sounds like she is saying that those people should have filed for bankruptcy sooner, before they used any of their 401K money, because they could have kept all their 401K money through the bankruptcy.