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Return on Investment

in Bankruptcy

Return on Investment

What if I told you you could get a return on investment of more than 2,000% in just 4 months? 

Don’t worry, I’m not a snake oil salesman and I’m definitely not the Wolf of Jefferson Street.  I’m a bankruptcy attorney and what I’m telling you is absolutely true.  

See, I calculated the average cost of a Chapter 7 Bankruptcy in my office which is somewhere between $1,500 and $2,500 dollars.  I then took the average amount of debt that we discharge, which is right around $50,000.  Then I looked at the average amount of time it takes for a Chapter 7 to run from start to finish.  When I ran the numbers, I got a return on investment of 2,602.70%. That’s a number Warren Buffett or Jeff Bezos would jump all over.  In fact, outside of winning the lottery or striking it rich at a casino, there’s no faster legal way to get that kind of return on investment anywhere. 

SHORT-TERM BENEFITS OF CHAPTER 7

The biggest benefit of bankruptcy is that you can stop paying any creditor that you wish to discharge.  No more credit card or medical bills. No more garnishments. None. Zero. 

Think about how much better your monthly budget would be if you could shave off hundreds or even thousands of dollars worth of bill payments.  

The day you file bankruptcy, the automatic stay goes into effect.  That stops all collections against you dead in their tracks. .

This means that unless it’s a car loan (and you want to keep the car) or a mortgage (and you want to keep the house) you don’t have to make another payment to any of your creditors. 

LONG-TERM BENEFITS OF CHAPTER 7

A Chapter 7 means that within 4-6 months, all your unsecured debt will be wiped out.  This will immediately increase your credit score.  Don’t believe me, ask the CFPB. 

Car loans, mortgage loans and home equity loans are secured by the property, and if you want to keep them, you’ll have to keep making payments.  

If you don’t want to keep them, you typically get somewhere between 3-6 months in that property before the bank repossesses it. You get to keep it that long without making a payment.  That’s a good deal. 

All in all, the benefits of filing a Chapter 7 are incredible.  

There’s almost no legal way to gain the kind of return on investment you get through bankruptcy.  With a small investment and the stroke of a judge’s pen, you can find yourself $20,000-50,000 better off.

Social Media and Bankruptcy

in Bankruptcy

Social Media and Bankruptcy

Beware of Social Media

As lawyers, we have a love/hate relationship with social media.  Sure, many of us use social media in our own lives as well as to advertise and inform our current and potential clients.  Social Media and Bankruptcy can occasionally cause problems for our clients. 

We post pictures of vacations, shopping trips, the things we’re proud of and even how we look.  For most of us, this is benign.  We don’t have anything to hide, or so we think.  

We routinely tell people who are planning on going through a divorce to avoid social media.  It helps keep nerves from getting frayed and also helps us not say or do anything that could be misconstrued by our soon to be exes.

Just as you do in a divorce, you should also limit your activity on social media when you file bankruptcy. You may be thinking, “why does it matter what I post” and the truth is, it probably doesn’t…but creditors are getting desperate, and desperate people do desperate things.  

I will use an example here of a very high profile individual who filed for bankruptcy in the not so distant past, Curtis James Jackson III. You might know him better as 50 Cent. 

A Big Blunder

In 2015, Mr. Jackson filed for Chapter 11 bankruptcy protection. Chapter 11 is a type of bankruptcy used for the wealthy and for corporations. Everything seemed to be going well until right in the middle of it all, he posted several photos on a popular social media site. One photo was of a stack of money in his freezer, another had stacks of bills arranged to spell the word “Broke,” and a third one was of him surrounded by a significant amount of cash on a bed. Mr. Jackson said the bills were props but he had stepped in it nonetheless.  

Mr. Jackson claimed that the photos were there for him to maintain a certain image that he needed in order to continue to earn money in his chosen field.  The problem was, it looked to creditors, especially those who weren’t going to get much, that he was trying to hide assets or “live large.” Because of these photos, the judge handling his case called Mr. Jackson to court to testify and to re-evaluate his assets.

In the end, Mr. Jackson was able to repay his debts under Chapter 11 and emerge debt free and fully reorganized.  However, he could have faced a much worse fate if he’d been found to be hiding assets and his little stunt likely caused a great deal more expense than was otherwise necessary in additional attorney fees. 

Avoid Problems All Together

Your creditors likely don’t know you personally. They don’t know that picture you posted at the beach was for a work trip and that time you checked in at the airport on social media was so you could fly to see a sick relative. They don’t realize that the picture of you in the shiny new car was actually a rental you had while your old car was being repaired.  

In other words, just remember, be careful what you put out there.  You never know who is watching and how they’ll take what you’re doing.  To you it was benign and potentially even necessary but to them, it could look like you were trying to hide something…or worse. 

If you have questions about a bankruptcy, don’t hesitate to call us.  We’ve been doing this a while and we’ve seen it all.  Including creditors using social media to hound clients. 

ERISA and Bankruptcy

in Bankruptcy

ERISA

People are often faced with the threat of debt collections.  Debt collectors will call, harass, send threatening letters and even try to sue you to recover debts.  They’ll tell you lies to get your money, and one of the biggest lies that they’ll tell you is that they’ll go after your retirement money. When they do that, you need to remember this name, ERISA. 

Many clients come into our office after draining their retirement accounts (or at least thinking about it) to pay off debts.  They’re usually shocked when I tell them this…

Creditors can not seize qualified retirement accounts to satisfy debts.

ERISA

The Employee Retirement Income Security Act (ERISA) of 1974 protects most employer-sponsored retirement plans. These plans include 401(k) plans, pensions and 403(b) plans. Even if you have accumulated millions of dollars in your retirement account creditors cannot access funds in these ERISA-qualified plans.

Every time I hear about a client being duped, often by some unscrupulous debt collector, into dipping into their retirement accounts to pay off some smarmy creditor it makes my blood boil and breaks my heart.  Especially when those people are close to retirement. 

Call An Attorney First

It’s important to remember that every situation is different.  Sometimes (albeit rarely) it makes sense for someone to use retirement funds to pay creditors.  More often than not though, it’s a terrible idea. 

In order to ensure  you don’t make a $50,000 mistake, you need to talk to an attorney.  That’s why we don’t charge people for initial consultations.  We put our legal expertise to work for you, free of charge.  If you need us, we’re here.  If you don’t, we don’t want to take advantage of you just because you might be in a bad place financially. 

Tax Liability

Here’s another reason why it’s a good idea to talk to an attorney.  Using your retirement funds will often trigger a taxable event.  In order to encourage people to save for retirement, most ERISA plans are tax deferred.  Plainly, that means that you don’t pay tax on that income now, you pay it when you withdraw the money.  If you withdraw it before you’re 59 ½ you’ll even pay a penalty on top of the taxes (unless you have a specific, qualifying emergency). 

If you’re already in a high tax bracket, or close to the next one up, it could trigger a massive tax event for you that would leave you holding the bag for a significant chunk of debt that you’ll owe the IRS as well as the Georgia Department of Revenue. 

Final Thoughts

Use ERISA protections where you can. Many people see their 401k as a piggy bank to satisfy every whim, want and need.  You need to change your thoughts on your ERISA plans.  You need to think of them as the BEST place to stash money for when you need it.  There is perhaps no greater vehicle for the average American to save and save a lot than an ERISA protected account. If you want to build wealth for yourself and your heirs, start here.  If you’re in trouble, call us first, before you make any decisions about what you will or won’t do with your retirement accounts. 

Why do I need a Veterans Disability Lawyer?

in VA Disability

 

Veterans served our country in ways that many civilians can never understand or truly appreciate.  While in the service of our country, many veterans suffer unimaginable trauma, both physical and mental. Our country has always tried to support our veterans as they return from overseas and try to assimilate back into civilian life, but for many, that transition is hard and often fraught with mental and physical health challenges.

Veteran’s Disability Law is an extremely complex area of law. Prior to 2006, veterans were not allowed to hire VA disability lawyers to represent them in the Regional Office and the BVA. This law was changed in 2006 when Congress finally recognized that veterans should have the right to hire VA claim lawyers in this very important area of law. In veteran’s disability claims, a VA disability lawyer can help clarify the issues and ensure that the claim is properly supported by evidence so that the claim can be appealed, if necessary.

Because of the complex nature of the law and the VA’s propensity to deny claims to deserving veterans and their dependents, it’s necessary to have people on your side, focused solely on your case and what you need in order to be made as whole as possible.

That’s where we step in.  We strive to make sure that our veterans get the care they need and deserve.  We love veterans and we our proud of the veterans in our own families who have served in every major war the United States has fought in the last 100 years. We decided to pursue VA Disability law because we saw the struggles many of our family members and friends faced as they returned home from the service. While many of them never received the care they needed, we don’t want you to suffer the same fate.

Call the attorneys at Harmon and Gorove today to learn how we can help you get the help you deserve.

Making the Stimulus work for You

in Bankruptcy

Stimulus

To many, using your stimulus to file bankruptcy may seem like a strange use of the money.  In fact, that might just be the opposite.  

The American Rescue Plan Act was signed into law late last week that will provide most people in the U.S. yet another round of economic stimulus.  Those stimulus payments should be arriving any time now.  While there are some things that may ultimately prove to be more immediate needs, you need to consider whether investing your money in a bankruptcy is a good use of the funds.  

Most People Wait Too Long

Let me assure you, lawyers who practice bankruptcy law do it because they enjoy helping people.  I’ve worked in the world of high finance.  I used to represent big banks.  The work was daunting.  I never felt like I was helping anyone…because really, I wasn’t.  That’s why I left it.  I work every single day to help people get out of problems that most of them had no part in creating.  

The problem is, most of the people simply put up with the emotional challenges of debt for way too long.  They stay up at night, they throw good money after bad, they spend money they could be putting away for a rainy day trying to pay a bill that they’ll never get caught up on.  

So, why would paying for a bankruptcy help me? First and foremost, when you owe someone $10,000 or more and you haven’t made a dent in it in years, $1,400 isn’t going to do much to solve your problem.  You’ll throw away $1,400 dollars you could have spent getting yourself out of debt. 

You Need Long-Term Relief

No one started out to go down this path.  Everyone assumed when they took out the loan or swiped the credit card that they’d be able to pay everyone back, in full…but life happens. Things come up, people get sick, people lose jobs and when you’re already living paycheck to paycheck, that creates even more problems.  

At some point, the debt is just too overwhelming.  It’s hard to come to terms with that, but the sooner you do, the sooner you can start seeking the help you need and making decisions that will have a positive impact on your life going forward. 

What is “that point”

It’s hard to know when you’ve hit, “that point.  That’s why we’ve got some guidance here:

  1. Never wait until you feel that all hope is gone.  If you’re just barely hanging on, you’re not only risking your financial future, you’re putting your own mental and physical health at risk.  
  2. You need to consider more than just your creditors.  Yes, you feel obligated to pay BIG BANK CORP, but I can assure you, the CEO’s kids won’t go hungry…but yours might.  You have responsibilities to your children, your significant other, parents or in-laws and other family members.  How much are you taking away from them as you kill yourself to pay off your creditors. 
  3. There’s more than financial responsibilities there too.  Is all the stress from debt causing you to be emotionally absent from your children or your spouse? Is debt potentially causing you to jeopardize your relationships with your family and friends? 
  4. The one person everyone seems to be forgetting in all this is you? Stress kills.  You’re risking everything by being so stressed.  We already discussed your relationships and how stress from debt can ruin those, but you need to remember to take care of your physical and emotional health as well.  If you don’t, no one else will. 
  5. Finally, you need to realize  you need help when you start making bad decisions. Desperation can frequently result in us making poor choices that can make our situations even worse than they already were.    

 

You need to remember, you have options.  Good, solid, legal options that can help you moving forward. The good news is, you’ve got enough money to get the ball rolling thanks to the stimulus.  In the end, when you look at it purely in the terms of return on investment, you really can’t beat spending a few hundred dollars to rid yourself of tens of thousands of dollars in debt. If you’re ready to explore your options, call us.  Your initial consultation and financial analysis is 100% free. 

“Real Fast”

in Bankruptcy

Real Fast

People call our office all the time wanting to talk to me “real fast.” Don’t get me wrong, I love speaking with my clients and everyone in our office is equipped to help…but the answer isn’t always so simple.  

And that’s because, quite simply:  There is no such thing as a quick answer to most bankruptcy questions.  Or rather, there are no good “real fast” answers about bankruptcy.

See, bankruptcy is one of the most nuanced parts of our legal system.  It is a blend of mostly federal law, with a bit of local rules and state law sprinkled in for good measure.  It’s why so many people who dabble in bankruptcy so frequently screw it up.  You’ve got to know your stuff to do bankruptcy the right way.  

Everything depends on the facts

Your facts. 

In order to help you out and provide you with good advice, a bankruptcy lawyer needs to know a lot of facts about your situation. 

Have you filed before, did you get a discharge, how long have you lived here and where were you located before?

What all do you own, are you the sole owner or is it joint tenancy? 

What’s your income and how do you make it?

Do you have dependents or do you owe taxes or domestic support?

The list goes on.

In Bankruptcy, Quick is almost always dirty

The best doctors take their time with a patient, good builders measure twice and cut once…

Good lawyers take the time to examine what’s happening in your situation and then apply the law to your case.  

If I don’t know what’s happening in your case, the information you’ll get from me is most likely useless, potentially even dangerous.  

I have an obligation to provide you with the best information possible, it’s part of the oath I took when I became a lawyer.  That’s why we ask you to disclose EVERYTHING and to answer our questions truthfully.  

“Online Advice”

Knowing all the facts is why relying on some internet “resource” for legal advice is dangerous.  It’s why we put disclaimers on our page about the advice in our blog.  Yes, it’s good advice…otherwise I wouldn’t put it out there, but it may not be the BEST advice for you because we don’t know your situation. 

When you post a question in some online forum or “click here for a FREE bankruptcy evaluation” you only disclose what you think is important or are willing to disclose to the public.  

The facts you throw out there may not be the ones necessary to answer the question.  Even if you provide good information about some aspect of your situation, other issues could cause problems.  

You can certainly use the internet to learn about bankruptcy as a whole and to figure out what information an attorney will need in order to help you.

But remember this…Don’t do anything until you’ve talked to a competent bankruptcy attorney about what’s going on in YOUR individual situation, real fast equals real danger. 

If you need sound advice about what to do in your particular situation, please contact us.  Don’t go it alone in one of the most complex fields of law there is.