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3 uses for your Stimulus Check

As of the writing of this blog entry, more than 22 million Americans have filed for unemployment and millions more are staring into the abyss.  COVID-19 has decimated what was one of the strongest economies in American history. Businesses are closing and some of the most famous names in retail are likely to be seeking bankruptcy protection in the very near future. There is one silver lining in all this and that’s the help we’re all getting from the government in the form of Stimulus checks to help offset the damage COVID-19 has done to people’s ability to function financially. A lot of people don’t often receive a big lump sum payment like this and many are asking, what should I do with my newfound windfall.  We have a list below to help you decide. 

Meet your basic needs

Everyone has ongoing expenses that they must pay for, your stimulus can help.

Food: You’ve got to eat and so does your family.  You’ve got to be able to put food on the table day in and day out.  If you don’t have any other means of putting food on the table, this check can seriously help with one of life’s greatest necessities. 

Housing: You’ve got to keep a roof over your head.  Many people are finding offers of forbearance on loans and rent, but be sure to read the fine print.  Many banks and landlords are offering forbearance but the devil is in the details. Many of those banks and landlords will expect the entire amount due at the end of the forbearance period.  If you can, pay your mortgage or your rent.  

Transportation: If you’re lucky enough to have a job now or one to go back to once everything goes back to normal, you need to keep a set of wheels. 

Utilities: You should pay your bills if you can.  While many utility companies are’t disconnecting during the crisis, don’t think that’s going to be a free ride. The tab is still running and they will eventually expect payment, possibly with interest and fees. The bottom line is, look on their websites for coronavirus accommodations and how to contact them for assistance. Don’t ignore bills. Stay in touch with each company if financial hardship puts you behind and you can’t pay.

Save it

We have written before about the number of Americans who don’t have even enough money  in their bank account to cover a $1,000 emergency. With each person getting $1,200 in stimulus money and families getting more, if you are one of the fortunate people who still have a job, use this money to help build up a fund to cover the unexpected burdens you may not see coming yet.  

Invest in your future

Eventually, everything will get back to normal and when it does, you’re going to have a lot of financial decisions to make.  If you aren’t in the position to save your money and you’ve stopped paying some of your bills like credit cards and personal loans, know that your creditors will eventually come looking for you and the money you owe them.  If you already had a good amount of debt to begin with maybe you’re realizing that now may be a good time to start fresh with a clean slate. At Harmon and Gorove, that’s what we’ve done for nearly 40 years. If you’re facing financial uncertainty because of unsustainable debt, contact the attorneys at Harmon and Gorove for a free consultation to discuss how bankruptcy can put you on the path to financial security.

Chapter 7 is often a better choice than debt consolidation

Every day, you turn on the radio and listen to product advertisements.  One of the major advertisers in the United States are debt consolidation companies.  You see their ads on TV and hear them on the radio every day.  They pop up in your facebook feed or in some google ad on the side of a webpage.  They make fantastic claims about being able to reduce your debts and consolidate your debts into a manageable debt load like they have some kind of magic wand.  It sounds like its too good to be true, and it often is.  What they’re selling you costs money, lots of it.  They make very good money on people’s need to be free of the burden of unmanageable debts.  Most of these companies just consolidate your existing debt into another loan with a lower rate.  When you’re already struggling, how are you going to make the payments on another, albeit potentially smaller loan. 

Another reason why debt consolidation can be dangerous for those struggling financially is that using a lump-sum payment to reduce the balance on your credit cards means that there’s more money to spend on your credit cards and the cycle of debt often just starts over again.  Debt consolidation loans can actually cause you to end up deeper in debt than you already were. 

Debt consolidation is a temporary fix at best.

Consolidating or reducing your existing debts may feel better temporarily but it fails in one aspect.  It doesn’t address the issue of having a substantial debt load still out there that is no longer sustainable with your current income.  You’ll probably still have a very high debt to income ratio and you’ll probably still be spending a ton of your disposable income servicing this newly consolidated debt.  Chapter 7 Bankruptcy can change that.

Chapter 7 proceedings can eliminate your debt, freeing you from it forever

Debt consolidators just change who you pay.  Instead of having to write 10 small checks every month, you write one big one to a loan company.  Sometimes, it feels good and gives you a false sense of security because you pay a lower interest rate or have lower monthly payments due to the loan being spread out over a longer period of time. The bottom line is though, you will still have to repay those debts in full.

In a Chapter 7 bankruptcy, those debts no longer impact your financial future. If you qualify for a Chapter 7 and successfully complete your bankruptcy proceedings, the result will be a discharge of your unsecured debts, such as credit cards, signature loans and medical debt.

Instead of being on the hook to repay thousands of dollars, you’ll have a blank slate that will free up more of your income for other expenses. You’ll also have an opportunity to rebuild a positive credit history. Instead of spending all your time worrying about bills and struggling to make monthly minimums, wouldn’t it be nice to be able to have the money every month to handle your finances responsibly and buy not just what you need but what you want as well.  Contact the attorneys at Harmon and Gorove today to find out how we can help you get debt free. 

Interview with an Attorney

We interview people for things all the time.  Whether we know it or not, we’re constantly trying to gauge people and find out what their angle is, especially when trusting them with something as important as your legal affairs.  We’re thrilled to let people know where we stand during an interview and we want them to feel comfortable with us.  Below, we list and answer a number of questions you should ask in an interview before you hire a bankruptcy attorney, or any professional for that matter. 

Questions you should ask during an interview relating to experience:

  • Will you be handling my case from start to finish? 
    • Yes, Harmon and Gorove prides itself on handling every aspect of your case.  We don’t farm our work out to people we don’t know. 
  • What percentage of your clients are individuals or businesses?
    • Most of our clients are individuals or consumers.  That said, we often handle small business bankruptcies for our clients and are very experienced at handling small business bankruptcies. 
  • Is there anyone else in your firm who handle bankruptcy cases and will they be involved?
    • Harmon and Gorove handles its cases in house as a team.  Every member of Harmon and Gorove has the experience necessary to handle your case from start to finish.

Questions you should ask during an interview relating to your case:

  • Should I even file bankruptcy?
    • We get this question all the time and based on our analysis of each case, we often advise that bankruptcy wouldn’t help someone.  We want everyone to feel comfortable with the process and being honest with someone and actually helping them is more important to us than making money by convincing someone to do something they don’t need to do. 
  • What are my alternatives to filing for bankruptcy?
    • We take the time to list out your options but honestly, there usually isn’t a good alternative to bankruptcy.  See our blog here about the alternatives to bankruptcy.  Usually, you have two options.  File or don’t.  As we stated in our previous answer, bankruptcy isn’t for everyone but when it isn’t right for you, it doesn’t mean one of these debt settlement companies is a better idea. 
  • How long will the process take?
    • This depends on the type of bankruptcy you file.  A routine Chapter 7 usually takes 3-6 months from filing date to discharge. This varies based on your individual situation. A Chapter 13 bankruptcy usually runs for a minimum of 36 months to a maximum of 60 months.  
  • Will you keep me up to date about deadlines and other things I need to know?
    • We always keep people posted about what’s going on.  You’ll receive letters from the court and from us.  We’ll also email and call you in addition to letters we send out to people just so you always know what’s going on.  That’s why it’s so important that you take our calls and keep us up to date on your contact information. 

Questions you should ask during an interview related to Service:

  • What is the best way to get in touch with you?
    • The best way to reach our office is via email.  We check our email religiously and we can often respond in a matter of hours.  We’re always happy to get a phone call from you though and we’ll provide you an answer as fast as we can. 
  • Who will attend court with me?
    • We pride ourselves on showing up to court with our clients.  Unless it’s a dire emergency or it’s been pre-cleared with you, one of our attorneys will be there with you when you go to court.  Even when someone else attends on our behalf, know that we have a relationship with that person that spans decades and we trust them implicitly. 
  • How will you keep me updated on the progress?
    • As we stated before, we’ll keep you up to date with letters, phone calls and emails.  We never want you to be in the dark about your case. 

Questions you should ask during an interview Related to Cost:

  • How do you calculate your fees and what do they include?
    • We are a flat fee law firm.  We don’t charge retainers like most attorneys.  We quote you an UP FRONT price.  No games, no gimmicks, no $15 to respond to an email or $20 to answer a phone call. What you pay is what you’re quoted and any possible extra fees are disclosed at the time. We base our fees on the complexity of your case and the time necessary to complete a standard case.  
  • Is there a retainer?
    • NO.  We never charge a retainer fee for any legal work.  We always quote you a price up front. 
  • Are your fees negotiable?
    • Generally, our fees are among the most competitive in the area. We are the low cost legal leader in Newnan district.  We constantly work to save money and keep overhead low so we can afford to provide you the best legal services at the lowest possible cost. That said, we are flexible and can usually find a middle ground to make everyone happy. 
  • Do you offer payment plans?
    • We don’t want your finances to get in the way of you getting the help you need.  We are happy to discuss payment plans with our clients.  

We’ve spent the last 36 years working hard to make our clients feel comfortable and well represented.  During an an interview, you should always ask your attorney, or any professional you’re hiring for that matter, some combination of these questions.  

Millennials & Credit Cards

The types of people carrying credit card debt is changing in Georgia and around the country. Millennials, a group of people born between 1981 and 1996,  were once known for their aversion to overdue bills, especially as many of them became adults and entered the workforce during the Great Recession. Because of this experience, a significant number of millenials steered clear of credit cards. However, as they have experienced salary growth and with credit card issuers developing cards that are particularly appealing to younger people, millennials have taken on a larger and larger share of credit card debt.

Along with that overall increase in credit card debt, millennials now experience higher levels of delinquent debt. Over 8% of credit card balances carried by these younger Americans were more than three months past due. This marks a high in the level of delinquent debt carried by younger people not seen in nearly a decade. Experts say that millenials and other young people have been inspired to open credit cards as purchasing power and income has grown. Many of these new cardholders feel confident that they will be able to pay back whatever bills they run up. The problem is, life often gets in the way. Personal circumstances like an unexpected job loss or an illness can interfere with a person’s ability to pay. When credit cards are involved, interest rates are exceptionally high, occasionally topping 35%. Even people with exceptional credit often pay interest rates of 18%.

Credit card companies often tweak their marketing to appeal more strongly to young people. These companies use tons of data and studies show that traditional incentives like 0% interest and cash rewards are less enticing for millennials than sign-up bonuses or travel credits. The worst part about the rise of credit card debt is that it accompanies a big rise in interest rates recently by the Federal Reserve.  This makes it even more expensive to carry a balance on a revolving line of credit like your traditional credit card. 

When people find themselves facing insurmountable debt burdens, they may not see the light at the end of the tunnel. However, a qualified bankruptcy attorney could provide sage advice and educate people on the available options that can help you achieve your financial goals. If you find yourself drowning in debt contact the attorneys at Harmon and Gorove.  We have decades of experience helping people achieve the dream of being debt free.  

COVID-19 and your Finances

COVID-19 is a disease the likes of which no one alive has witnessed or has any real recollection of.  While we’re Attorneys here and not Doctors, we know that COVID-19 has a real impact, not just on people, but their finances as well.  Many Americans don’t have paid sick leave and if they do, perhaps they don’t have enough.  Many people work in industries that often shut down when they don’t have enough visitors like hospitality, the restaurant business, lodging and seasonal jobs that depend on foot traffic.  Let’s be honest, I don’t know about you, but I do know that I’ve been out and about and all I can say is, foot traffic is at a minimum to say the least.  Additionally, with schools and businesses closed, many of the industries that support these large employers like parking attendants,  dry cleaners, sanitation workers, janitors and custodians as well as hourly secretarial staff are all seeing hours cut back or eliminated period.  A recent CNN article suggested that more than half of all jobs in America are at risk.  The author states, “Nearly 80 million jobs in the US economy are at high or moderate risk today, according to analysis in the last week from Moody’s Analytics. That’s more than half of the 153 million jobs in the economy overall.” We could potentially take years to get back to where we are today if the worst case scenario materializes and for many, that is simply too long.  Thousands of small businesses will be affected by the economic downturn and millions of people will experience furloughs, layoffs and closures.  That said, we are here to help.  Harmon and Gorove has successfully helped people navigate economic downturns and have assisted them in making their financial situation work for them, even in the worst of times.  We understand that no one ever expects to be here, but don’t worry, we are here to help in a compassionate and judgement free way.  If you’re suffering from job loss, or simply just having your hours cut, contact us today for a free, no obligation consultation to learn how we can help you navigate the most recent economic downturn. 

5 Common causes of Debt

People come into our office all the time with debt.  It’s kinda what we do.  If you’re here and you’re not in debt or seeking a divorce, chances are, we won’t be able to do much for you.  Over time, this has given us perspective on what actually causes debt.  Below are the top five causes of debt. 

1. An unexpected emergency

Many people find themselves in debt because they aren’t prepared when something bad happens. Your entire HVAC system may go belly up and need significant repairs. You may crash your car or get really sick only to find your insurance doesn’t cover everything. To keep these scenarios from wiping out your savings and leading to debt, you once again need to boost your emergency fund.

2. College costs

Going to college is expensive. So many people find themselves saddled with debt from college and often in the early part of their lives. This makes getting ahead and acquiring those assets that help build wealth even harder than before.  The average class of 2016 graduate left school with $37,172 in student loan debt. Those student loans can force a new graduate into even more borrowing just to cover basic necessities, which only furthers the downward spiral into debt.

3. Loss of income

Losing your primary means of generating income can really hurt you. You might have been laid off or maybe you did something stupid and got yourself fired. Maybe you’re self employed and had a sudden decline in revenue for your business. Maybe you had to stop working to care for loved one.  Perhaps your health took a turn for the worse and you were forced to retire early or significantly reduce your hours.  When horrible things like this happen, it’s easy to find yourself overwhelmed and debt can quickly follow.

4. Being poorly insured

Insurance is one of the most vexing things about life. It frequently feels like a waste of money … until you need it. Many people find themselves in very serious debt  when a bad event hits and they aren’t properly insured. Imagine  your house burning down without homeowners insurance or wrecking  your car with a liability only policy. All of these things can lead to serious financial consequences. 

5. Keeping up with the Joneses

People are always looking next door and seeing what the neighbors are doing,  yours truly included. Maybe Todd across the street is putting in a pool or your college roommate is sharing photos of their latest European vacation. Maybe your obnoxious sister-in-law just closed on a house twice the size of yours. Life really feels unfair when you feel like you have to go without and like many people, you may feel pressure to “keep up” with those you perceive to have it better than you. 

DON’T DO IT THOUGH, THIS IS A RECIPE FOR DISASTER.

Chasing a lifestyle your income won’t support will have you turning to credit cards and other consumer debt to fund frivolous buys. The spiral into debt can be quick, overwhelming and unforgiving. The average millionaire drives a Honda, Ford or Toyota, and lives in a normal house in a middle class neighborhood. No one is saying you shouldn’t treat yourself to nice things or go on vacation every once in a while; but if you can’t actually afford those things you’re hurting yourself in the long run.

If you’ve found yourself drowning in debt, whether it’s one of these causes of debt or not, reach out to the experienced and compassionate lawyers at Harmon and Gorove for a free consultation today.  We have decades of experience helping people get their finances back on track and and creating lasting prosperity for our clients.