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Profiting from Shame

People are so scared in our society to talk about their financial difficulties.  It is a taboo subject that people avoid even more than discussing religion or politics. We all want to be like those people who made a fortune, we envy them and try to emulate them. At the very least, everyone expects to be able to live a middle class lifestyle if they work hard and play by the rules.  Many who aren’t living that lifestyle are asking themselves, what’s wrong with me?

Unfortunately people who are meeting with a bankruptcy lawyer are often manifesting an intense amount of shame.  They somehow feel like their financial failure is a moral failure, representative of some kind of failing they’ve had in life.  Because so many people are unable to discuss this outside the safe confines of their lawyer’s office, everyone thinks they are in this alone and that they’re a failure.  People even think that they’ll have to explain to the bankruptcy judge why they’re in the mess they’re in and justify it to them. 

Profiting off people’s shame

This feeling of shame and unwillingness to talk about financial problems is a big reason why debt settlement and debt management businesses are raking in cash.  They tell you that, for a price, they’ll handle your finances for you, pulling you out of the hole and keeping you from having to file bankruptcy.   

Debt settlement rarely works and is usually just a ripoff.

They fail because creditors often don’t cease collections even after they’ve been contacted by one of these for profit companies.  The company you hired pays themselves first and THEN tries to settle your debts. Inevitably, the creditors who aren’t getting anything and won’t settle end up going to court and get a judgement against you and you’re back at square one, only poorer than you were.  This only benefits the debt settlement people and works because they convince you that bankruptcy is shameful. 

Bankruptcy isn’t shameful or rare

Over the past few years more than 1.3 million people a year have sought bankruptcy protection and the numbers were even higher than in the last decade.  A recent study said that between 15 and 20% of all families in the United States would be better off if they had filed bankruptcy. The majority of people who live in the United States and need to file bankruptcy usually have a good reason.  The top three reasons for filing bankruptcy are job list, divorce, and some kind of illness, none of which are shameful. It isn’t like you’re out blowing money on gambling, cocaine and prostitutes. The average bankruptcy client is married, middle aged, white, working and has some kind of education beyond high school.  Again, nothing shameful there. Having generous and consumer friendly bankruptcy laws ENCOURAGES competition and entrepreneurship. Any country that wants to thrive in our modern economy needs to protect people who take reasonable risks and fail to encourage more entrepreneurship. It allows people to take business risks without the risk of a life sentence for failure. Bankruptcy is vital to protecting people from failure and allowing them to get back on their feet.  If you feel the need to speak with a bankruptcy attorney about your situation, don’t let someone shame you into making a mistake that may cost you money and peaceContact the attorneys at Harmon and Gorove today to learn how we can help you get back on your feet. 

 

72 Month Loans: A Car Buying Nightmare

For many Americans, buying a new car is a reason to celebrate.  People often choose to buy a car when a major milestone occurred such as graduation from school, a marriage, the birth of a child getting that promotion or reaching the retirement milestone.  However, today’s new cars are more expensive than ever, causing more and more people to take out car loans that stretch past the traditional limit of 48-60 months.  72 month loans are pretty much standard practice with 84 and even 96 month loans becoming commonplace.  While this may seem like a good idea when you’re looking at your monthly payment, this practice is leading Americans down a road of debt that is difficult to come back from,

The Hidden Costs of Car Ownership

With the average cost of a new car climbing over $37,000 in 2019, the average American family is finding it harder and harder to get into any car at all, much less their dream vehicle.  This is where unscrupulous car dealers and banks come into the equation. Car dealers and now selling people cars and financing them for periods exceeding 60 months at an alarming rate.  An example cited in a recent Wall Street Journal article described the plight of a young man who recently purchased a car understanding that he needed the payment to be $400 a month or less.  Once the dealer got them into the finance office, they convinced him to add on high margin items like extended warranties and tire protection packs that added another $100 a month to his loan.  In order to get close to the payment he needed he ended up financing his $27,000 car in a 72 month loan which will ultimately cost him $9,000 in finance charges and not be paid off until 3 years after the bumper to bumper coverage expires and long after any secondary warranties expire as well.  This could potentially leave him paying thousands of dollars out of pocket to cover repair costs in addition to his $500 a month payment.

Fortunately, There’s help

If you are one of the unfortunate people who have found themselves underwater on a car that requires thousands of dollars in repairs, isn’t running at all or is now worthless because of unscrupulous car dealers tricking you into thinking you could afford a vehicle by spreading payments out over an extremely long term, you should consider speaking with one of the attorneys at Harmon and Gorove.  Our attorneys have decades of experience helping good people free themselves from the bondage of debt and unscrupulous creditors.  Contact our office today for a free consultation to learn about how bankruptcy can help you get your finances back in order and your life back on track. 

Divorce and Work: Handling a Major Transition at your Job.

You’re going through an uncontested divorce.  Even though uncontested divorces are lower stress that long drawn out ones with tons of fighting, it’s still a major change in your life. 

In a perfect world, your supervisors and your Human Resources department will understand what you’re going through and cut you some slack. Good co-workers will be there to listen and help out until you can regain your footing and get your life back in order. 

In a sense, going through the process of a divorce is like getting sick; you shouldn’t be blamed for needing time off or being less productive for a period of time. In the end, it is highly unlikely that you are the first employee who has gone through a divorce.   Unless you do something that clearly violates company policy, it is illegal for an employer to fire you just because you are going through the process of getting divorced. 

Having said all that, we do have some tips for how to handle the emotional stress of a divorce at work.

 

  • Be upfront and honest. Tell your supervisor that you are going through a divorce. You may explain to them that you will likely be missing work more often but that you still intend to get your work done. 
  • Outside of telling your supervisor, you should probably not tell anyone that you aren’t close to and don’t trust implicitly.  You don’t want rumors to get started about you. 
  • Find a way to take on more group projects at work.  It will allow you to be around others and also be supported while doing your work. 
  • Don’t handle the business of your divorce at work unless it is absolutely necessary. Taking phone calls and reading emails may just serve to upset you and make it even more difficult to handle the demands of the workplace.
  • Whatever you do, don’t get into a shouting match over the phone with your spouse.  It will just serve to get you worked up and you’ll air a lot of dirty laundry to those within earshot. 
  • Keep your temper and your ego in check.  Don’t fly off your handle or bad mouth your spouse.  This serves two purposes. You don’t want your coworkers to think you’re nuts and you don’t want to provide your spouse a reason to go from an uncontested divorce to a contested one. 
  • Don’t give up or quit: As the old saying goes, this too shall pass and you’ll want to retain as much normalcy in your life as you can once you start the rebuilding process. 
  • If you feel overwhelmed, get up and take a walk and get some fresh air. Exercise will make you feel better and help you calm down. 
  • If you’re in the process of looking for a new job, do not bring up your divorce to prospective employers. 

Divorce isn’t an easy process.  While an uncontested divorce is easier than a contested divorce, it may be hard at times. Try to follow these simple rules and remember, it’s best for you, your job, and your divorce to try to keep a level head and not get overwhelmed. 

If you feel that you need to speak with someone regarding an uncontested divorce, call the attorneys at Harmon and Gorove today.  They have decades of experience handling uncontested divorces and keeping things civil between divorcing spouses. 

 

Testifying at a Meeting of Creditors

Are you heading for your first meeting of creditors?

I know you’re nervous, apprehensive, and possibly even nauseous. Clients often imagine a worst case scenario where they are raked over the coals and tricked into admitting something, just like in Matlock.  Believe me, the trustee isn’t Matlock and they aren’t going to go off the rails in a, “you can’t handle the truth” monologue like in the movie, A Few Good Men. 

In all reality, the Meeting of Creditors will most likely be a snooze fest. 

In the link below, I show you a pretty comprehensive list of questions you’ll likely be asked, depending your your circumstances list of questions a trustee might ask.

Below, I list my own rules for answering those questions.

ALWAYS listen carefully to the question

You’ve read the list above and you’ve been prepped by me prior to the hearing.  Now, it’s showtime. You need to pay close attention to the trustee and make sure that you really hear the questions. 

Number one, it’s polite.  There’s no need to be rude, shifty or evasive.  The trustee is just doing their job. Number two, you need to make sure that you know what the trustee actually wants to know from you.

Remember, your testimony is being recorded and you’ve sworn to tell the truth to the best of your knowledge.  It is imperative that you are answering the question that the trustee actually asked.

Answer Honestly

Honesty is the price of receiving bankruptcy protection.  This isn’t the best time to be dishonest. You’ve recently seen several celebrities go to jail for lying about things under their bankruptcy.  Just because you aren’t a celebrity doesn’t mean they won’t do the same thing to you if they find out you’ve knowingly lied. You are testifying under oath.  

Be brief

Just answer the question the trustee asked, honestly, without getting verbal diarrhea. Don’t try to explain your situation, don’t attempt to justify why you did what you did and most certainly don’t ramble on aimlessly. Just answer the question and if the trustee wants more information about a particular topic, they can follow up with other questions. In all honesty, the trustee usually just tries to make sure that it seems like they have done their job. The trustee has a long list of cases he must get through every day.  Don’t make their day any longer by rambling on. 

Don’t guess

If you don’t know the answer just say you don’t know the answer.  Not knowing is ok, remember, you’re just here to tell the truth. If not knowing is the truth, you’re set.  In all likelihood, your attorney can help. Chances are there are documents that provide the information that the trustee is looking for. That is why you’re paying us, afterall. 

This is one time where faking it most definitely won’t make it. 

In the end, just be yourself and just be honest.  If you follow these four rules, your first meeting of creditors will be your last.  Then you’ll be on your way to being debt free and having that fresh start you so desperately need. 

If you need help dealing with your debts and getting the fresh start you so desperately need, contact the attorneys at Harmon and Gorove and let us help you get back on your feet and brighten your future.  

 

Creditors and Senior Citizens: Lying in Wait to Steal from your Heirs.

Everyone has an idea about the legacy they wish to leave behind.  What that legacy is in reality and what you want it to be can be two different things. Is your legacy to your kids an encounter with your unpaid creditors?

Often, problems with creditors for people over 65 may not be problems the elderly debtor at all. Most types of income and assets are protected by law from creditors.

Usually though, that doesn’t bother creditors.  They’ll just wait until you’re dead to steal your assets from those you wish to inherit from you. 

Seniors enjoy protection from collection

Elders  in Georgia have significant legal protections from creditors.  Exemption laws, pension law, and the Social Security Act often make it hard for creditors to seize the assets of elders, even to pay legitimate debts.

People often make the argument against seniors filing bankruptcy because of the following reasons. 

  • Social security is 100% protected from creditors (unless you owe the government).
  • Your Pensions and other retirement accounts are beyond the reach of even those with a judgment against you. 
  • Houses are not liquid assets and it’s extremely difficult for creditors to make you sell your house.
  • Seniors usually don’t have an income outside of these aforementioned sources so there’s nothing to garnish.

Because of these generous protections, senior citizens often ignore debts and use their money to pay for today’s expenses, at the expense of what they’ll leave their heirs. 

However, just because you can ignore old debt, is that really a part of the legacy you wish to leave behind?

Some debts outlive the debtor

So, what happens when you die? Does the debt go to the grave with you?  Turns out, the debt lives on.

That doesn’t mean your heirs inherit your debt; in other words, your heirs don’t become personally liable for your credit card balance.

What many people don’t realize is that debts are paid in full before heirs will receive anything.

As per probate laws, debts are paid before the estate is distributed to your heirs.  If the deceased created a living trust, the trust usually provides that the successor trustee pay the deceased’s debts first.

When debts survive the debtor, the intended heirs inherit a significantly diminished estate, or a ticking time bomb of debts that are owed to the deceased person’s creditors.

Creditors lie in wait

Everyone has heard about interest. Interest is a creditors best friend. Interest on outstanding debt is often meaningless to the senior citizen who can avoid paying it while they’re alive. The downside to this is the fact that time and interest silently eats up the senior citizen’s estate.

Who cares if there aren’t any real viable means of collection.

Waiting works for a creditor.

  • Wait til the senior dies.
  • Wait while the interest compounds.
  • Wait til the records conveniently get lost.

Creditors are often adept at lying and manipulation. They will work hard at making your heirs feel guilty and convince them to pay off the debt from their own pockets after you’ve passed on.

The generosity gene

The impulse to pass along something to your children seems to be genetically implanted in the human soul. It’s something that drives many seniors to live frugally, save and work hard. But under our legal system, paying debts is higher priority than leaving something behind for your heirs.

Despite arguments to the contrary, bankruptcy is not only appropriate for a senior with debts and assets that are protected from creditors during their lifetime, but highly advisable. 

The exemptions that protect the assets under state law and the laws that made the senior judgment proof to begin with are also there to protect you should you file bankruptcy.

Without filing bankruptcy, all the exemptions will do is just hold the creditors off during the life of the debtor.  That debt will lay in the grass, hiding like a snake, waiting to collect from your estate and ultimately, your heirs. 

Another thing you have to remember is that bankruptcy exemptions vastly more generous than probate exemptions. In fact, unless there is a surviving spouse, there may be no exemptions in probate at all. Exemptions are designed to protect the surviving spouse, not their heirs. 

Bankruptcy flips the equation

A bankruptcy, by its very nature, eliminates unsecured debts. Things like credit cards and medical bills are magically gone, while the exemptions protect assets.

One a debt is discharged that debt is gone, forever, never to be heard from again. Bankruptcy law returns complete and total ownership of exempt assets back to the debtor.

Your Social Security payments both current and future, doesn’t even enter the bankruptcy equation.  All of your Pensions and 401(k)s are also not subject to the bankruptcy. 

One thing you need to know is that in order to successfully pass your assets on to the next generation by using bankruptcy, you need a good bankruptcy lawyer who doesn’t dabble but actually KNOWS the law. It’s hard work and requires planning but the results are worth it.

By eliminating your debts before you die, there’s more left for your family, and that’s always a good thing.