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Hold it, fold it or run

You’ve got to know when to hold ’em,

know when to fold ’em;

know when to walk away,

know when to run…

Thus is the advice that is given to a young protege of the Gambler in the hit Kenny Rogers song. This advice is also good for people who are facing problems with debt to consider.  One of the toughest things for people who are facing uncertainty about their finances is knowing when to fold and get the financial help they need. 

We often play a bad hand

Almost everyone wants to repay their debts. We feel like it’s the “right” thing to do.  Paying your debts fits the narrative of the hard working hero who scrimped and went without to pay your debt in full.  Lord knows the creditors who push these massive debt loads onto people with the false assumption that they’ll be able to pay want you to think that not paying your debts will be the financial ruin of you until the end of the world. 

If you’re in debt, it’s hard to know what your choices are and to know which debts are the best to get rid of and which ones you need to keep. 

The problem is that no one talks about the actual cost of paying off burdensome debt.

Nobody talks about people who have such a strong commitment to pay burdensome debt, get blinded to other needs and other financial pitfalls.

Certainly, no one mentions good people who sacrifice and still fail to find a way to pay off their debts.

Nobody seems to care about the elderly; drowning in debt with no hope of better times ahead.

So how do you know how to play your hand, so to speak, when choosing the best way to succeed at getting out of debt?

Just like the cards you have, the decision about what to pay (hold) or file bankruptcy on (fold) depends on a number of factors. 

What’s the amount you owe?  

HOLD:  the lower your total debt, the more likely you can succeed in paying it off.

FOLD:  If you have a very large amount of debt it will take longer to pay off and will likely cause other events to interfere.

What’s your age?

HOLD: If you’re young, you have more time, theoretically, to pay off your debts due to the amount of time you have left in life to work. 

FOLD:  If you’re close to retirement, now’s the time to seriously start looking at cleaning up your finances

Do you have critical debts?

HOLD:  Do you owe taxes, have a mortgage or owe some kind of domestic support? These critical kinds of debts should take priority over unsecured or other debts that could be discharged. If you don’t owe these types of debts, a payment plan for other debts can often succeed.

FOLD:  paying unsecured bills when you owe these critical types of debt is EXTREMELY risky.

What does your retirement savings look like?

HOLD: IF you have a pension or a substantial amount of money saved for retirement, you can try to get your debts paid.

FOLD:  If you’re way behind on saving money for your golden years, wouldn’t it be better to use that money to save for retirement instead of paying back unsecured creditors?

Do you have an emergency savings fund?

HOLD:  If you have a big enough cushion to sustain a loss of income, try to pay off debt.

FOLD:  If you’re like the majority of Americans and have very little saved, you make yourself even more vulnerable diverting money to existing debt.

How to succeed

The number one thing you want to avoid is spending money you don’t have on old debts when you have no reasonable chance of succeeding.  Living paycheck to paycheck with no savings isn’t a good way to live and it makes life very tough. The young protege got some good advice for that taste of whiskey.

Kenny Rogers’ gambler told him:

That the secret to survivin’

Is knowin’ what to throw away

And knowin’ what to keep

Keep paying on old debts only if you have the ability to succeed.  Otherwise… well you know how the rest of the song goes. 

If you feel lost and are unable to find a way out of debt, contact the attorneys at Harmon and Gorove.  We have helped tens of thousands of people get the help they need in order to get the fresh start they so desperately need.  

 

Evictions and Bankruptcy

As of the publishing of this blog entry, the State of Georgia has resumed judicial evictions.  They have been going on for just under two weeks and already, courts are seeing their dockets fill up with hundreds of requests in each and every county, particularly in the Northern District.  The sad reality is, those evictions have a real impact on real people.  You may have googled your protections and found what you think are protections that the state offers.  What you may not have realized is that google often pulls in information from other states, despite your inquiry. The truth is, in Georgia, you have very few legal remedies should your landlord file a dispossessory action against you. 

Landlords can file a dispossessory against you the minute that you are late and within a matter of weeks, law enforcement can show up at your door and remove you and your family from the property.  In Georgia, evictions are like clockwork. In certain circumstances, Bankruptcy can help slow or stop the eviction process and it can certainly help you if you wish to break your lease and move on or if your landlord is seeking a judgement against you for unpaid rent.  Bankruptcy is a powerful financial tool you can use to help yourself get out of a bad situation.  If your landlord is trying to evict you, you should seek the opinion of a qualified bankruptcy attorney as to whether or not bankruptcy can help you in your situation.  

If you have already been evicted, bankruptcy can stop the landlord from continuing to collect back rent and keeps them from getting a judgment against you for any unpaid rent from the remainder of the lease.  Additionally, if you know you can’t afford your rent, bankruptcy can allow you to break your lease without the repercussions of being sued by your landlord for ending the lease early.  This is particularly true in cases of commercial leases when you must shut down your small business.  

If you find yourself in the unfortunate situation where you are unable to afford to pay for your rent any longer or your landlord has sought a judgement against you, contact our office today.  We offer a free consultation, either in person or online, to help you discuss your options in bankruptcy.  

The Reality of Unemployment

COVID- 19 is having a dramatic effect on the average American household. We are seeing unemployment numbers reaching record highs not seen since the great depression. With a  wave of corporate bankruptcies having already begun, taking out legendary retailers like Neiman Marcus and J. Crew as well as the second oldest airline in the world, Avianca, with more pain in the corporate world likely to come and with that will come even more unemployment. 

Consumers, likewise, have faced an enormous amount of uncertainty.  A recent poll taken since the coronavirus outbreak paints a grim picture of household finances: Almost two-thirds of respondents (64%) anticipate that lost wages due to the pandemic will yield at least a $500 shortfall when trying to pay monthly bills. Nearly half of those households (27% of all respondents) predict a shortfall of $1000 or more. Those are real and substantial amounts of money.  We have already discussed how the average American is unlikely to be able to fully fund a $1,000 emergency.  Add that in with the fact that many Americans are likely to be $1,000 short of being able to make basic expenses and you have a recipe for catastrophe.  

While many have been able to float their expenses by relying on their $1,200 stimulus check and their boosted unemployment checks, others still find themselves short and others still haven’t received either their stimulus or their expanded unemployment benefits.  This leaves consumers with very few options.  As we outlined in an earlier blog post, you need to prioritize your payments.  You have to keep a roof over your head, food in your belly and you have to be able to obtain reliable transportation when it is safe to return to work or when you are able to find gainful employment in that order.  One of the best ways you can handle the shelter and transportation issue is through bankruptcy.  When times get tough, the bankruptcy code provides immense relief for people who have found themselves to be in tough financial situation.  This is done through the automatic stay which provides relief and stops actions by creditors.

Bankruptcy is a saving grace for people who have experienced financial hardship.  If you’ve exhausted your options or are feeling overwhelmed by your financial situation, don’t keep waiting for the next financial catastrophe to come down the pipe, get ahead of it and contact our office today for a free, no obligation consultation via phone, videoconference or in person (with social distancing of course) with one of our award winning attorneys.  In times of trouble, it’s good to know someone.  Let us work for you. 

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.

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.