What Facebook Taught Me About Advising Bankruptcy Clients

       A few days ago I was horrified with what I saw after signing into Facebook.  I didn’t understand why I needed a story of the day or why my friend status updates were in the corner of the page.  I guess I really felt like my life is complicated enough as it is and that I really didn’t need Facebook to be complicated.  After all, to me Facebook is simply a way to keep up with friends who I don’t have time to speak with as often as I would like and also a way to see what people are doing I will probably never speak to again.  Since that day earlier this week I haven’t logged into Facebook again (ok…I have looked at it on my phone…but my phone doesn’t show all of the Facebook changes.) 

       If you are still reading at this point you must be wondering what this could possibly have to do with how I advise Bankruptcy clients at Halcomb Singler, LLP.  After all, what could a lawyer glean from Facebook about advising clients?  Certainly there is no bankruptcy law conversation on Facebook.

       Over the years I have learned that knowing Indiana bankruptcy law is only about half of what I need to know in order to best advise my bankruptcy clients.  I need to be available to advise bankruptcy clients not only about money management, but also about how to rent after bankruptcy, how to handle family issues in bankruptcy and how to hold their heads up high in spite of the fact that they need to file bankruptcy. 

      The reason that only about half of what I need to know to best advise bankruptcy clients is that when a person comes to my office to discuss whether bankruptcy would help his or her financial situation that person feels like their entire life is completely complicated and overwhelming.  In many cases my clients just don’t want to deal with their financial situation by the time they call my office.  Although I would never say that something as trivial as changes on Facebook could be compared to the feelings of those who need to file bankruptcy, after seeing the Facebook changes I just really didn’t want to deal with it anymore and have been avoiding Facebook the same way that some of my clients avoid their financial difficulties. 

       I truly enjoy when people at the end of their “financial rope” come to see me to discuss their options.  Sometimes I recommend that they file bankruptcy and sometimes I don’t.  But I am typically able to help each person come up with a plan on how to attack their financial difficulties prior to them leaving my office.  Since there is no charge for an initial consultation, there is really no down side to setting up an appointment in the event you believe it may be necessary for you to file bankruptcy.  If you live in Indianapolis, Carmel, Noblesville, Fishers, Zionsville, Tipton or Kokomo and are interested in whether you could benefit from bankruptcy call my office at 317-575-8222 or click here to fill out our form and we will contact you.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.

Why you need an attorney and price isn't the only factor

            I thought of the idea for this blog over the weekend while sitting with my husband at a restaurant.  My husband was going on about how a friend of his was in the midst of a divorce and decided he didn't need an attorney.  My husband went on to say that his friend's wife had retained an attorney, but that his friend was thinking he just didn't need an attorney because it was just a simple divorce.

          Ok....I'm going to take a deep breath, because even though it has been more than a few hours since this conversation took place, I am still trying to figure out why so many people think that having a lawyer is not necessary.  Seriously, I would love to know.  Please post your comments because I am fascinated by the fact that people think they can be their own best lawyer.  The most obvious reasons I can think of as to why a person would believe that they don't need to be represented by a lawyer is cost.  I think people often believe that an attorney is going to cost much, much more than they can afford.  While it is true that attorneys fees (especially in something like a divorce) can be very expensive costing $10,000.00 or more....I even remember hearing someone spent over $100,000.00 on a divorce in six months while represented by a large downtown firm.  However, attorney fees are not usually this expensive.  A divorce that isn't highly contested will more likely run about $1,500.00 to $2,500.00.  A bankruptcy will likely run between $1,500.00 and $3,500.00 (and the majority of the $3,500.00 fee is paid over time).  Other than cost I can't really come up with a legitimate reason people feel they are best without counsel.

            Do people think that attorneys are really not that smart and that they don't know any more than the average person about the law??  I am not saying that every attorney is an expert on every area of law....actually, it is quite the opposite.  Take myself for example, I would not be fit to represent my husband's friend in a divorce.  I really know very little about divorce.  The same thing goes for criminal law.  I joke that a person who has been arrested knows more about criminal law than I do.  I focus on bankruptcy, personal injury and civil litigation and do not accept cases outside of those areas.  But what I think the average person needs to remember is that they don't know what they don't know.  I have had cases that I have thought about for hours or even days.  Cases that require extensive legal research and cases where the smallest change can effect the entire outcome.....and the most common theme about these cases is that my clients would never have know that the smallest point that I have been obsessing over was even an issue.  And why should they?  My clients aren't stupid, but they didn't spend three years in law school and aren't in the practice of law.  My clients don't know bankruptcy rules or procedures the same way that I don't know how to change oil on a car, how to install hardwood flooring or how to remove a spleen.

            There is an old saying that "only a fool represents himself" that I agree with completely.  Even though people have the right to proceed pro se, without a lawyer, it does not mean it is a good idea to proceed without a lawyer.  So, even if you agree with me that a lawyer is necessary if you find yourself in need of a divorce, bankruptcy, will, etc., how do you know which attorney to select?

           The answer to this question is much more complicated and personal.  I typically tell clients to select an attorney that you feel comfortable with and confident in.  After you meet with an attorney if you do not feel the attorney can or will represent you zealously then move on to the next attorney.  There are many, many attorneys practicing law and there is really no reason to move forward with an attorney you don't trust.  If there is no trust in your relationship it will be a much more stressful time and it is doubtful that the attorney/client relationship will last.

            Another thing I think people should keep in mind is that, just like with a plumber, electrician or accountant; price should not be the only determining factor in which attorney you select.  I am not saying that you should not take price into consideration at all....after all, you need to be able to afford to pay your attorney.  But keep in mind that your experience with a bankruptcy attorney that charges $800.00 for a Chapter 7 bankruptcy might be different than the bankruptcy attorney who charges $2,500.00 for bankruptcy.  For example, will the attorney be available to return your calls?  Will an attorney put together your bankruptcy or will this be done by a paralegal?  Will the same attorney work on your case from its filing to discharge?  Will you know the attorney who shows up to represent you at your hearing?  Will there be 20 other people there the day of your hearing all being represented by your attorney?  On the other hand, do you need Starbucks coffee with fresh bagels at your attorney's office each time you meet?  Is your attorney's office filled with expensive art and accessories?  Is your attorney driving the most expensive vehicle you have ever seen in person?

           The bottom line is that you will need to decide where your comfort level lies in selecting an attorney based on price.  If you want a lot of hand-holding, maybe it is worth it to pay for the attorney who will personally guide you through the process and if you are not worried about going to court and don't really care who shows up to represent you maybe the less expensive attorney is the way to go.  Remember, no matter what the price make sure that you are comfortable with the attorney.  Make sure that you think twice before proceeding without an attorney.  And keep in mind that you don't know what you don't know.

           I know this blog was not as much about money management or bankruptcy as most, but I felt that it was important to speak on this topic because if I live to 100 I may never understand why people think they don't need an attorney due to a "simple" case (I have never had a client who thought their case was anything but simple).

            As always, if you are a Carmel, Indianapolis, Lebanon, Zionsville, Kokomo, Anderson, Fishers, Tipton or Noblesville resident and are considering bankruptcy I am happy to sit down with you for an hour to review you income, expenses, assets and debts.  I will explain the bankruptcy process personally and answer your questions and there is no fee for this initial consultation.  Simply call my office at (317) 575-8222 for your appointment at Halcomb Singler, LLP.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.

So your Mortgage Lender Won't Work With You on a Modification?

            To be fair, as a bankruptcy attorney I don't typically run into people who have successfully received a mortgage modification with no hassle, are making payments and are moving happily down the road of life.  To the contrary, I meet with those who are having difficulties with a mortgage company.  But since I can really only blog about what I do on a day to day basis, let me say that if you are getting nowhere fast with your mortgage company you are not alone.

            People are not stupid.  They know that if they are going to get behind on their mortgage payment that they should call their mortgage company and see if something can be worked out until they can get back on their feet.  This makes sense, right?  Everyone wants to make their mortgage payment.  However, the way that mortgage companies operate doesn't always make sense to people.  The first surprise most people run into is that typically a mortgage company doesn't want to hear from you if you are going to be late on a payment.  They simply want their money.  If you don't pay they have a department whose job it is to call you and get your payment.  They don't want to hear your sob story about how you got laid off, about how you have children or about how zombies raided your 401k.  Bottom line is that they are dealing with calls all day with sad stories and they really don't care about yours.

           Another thing that surprises people is that your mortgage lender may not consider attempting to work with you until you are about three (3) months behind on your mortgage.  I am well aware that this is counterintuitive.  It makes much more sense to be proactive with your lender than it does to stick your head in the sand.  However, in addition to not caring about your problems, your lender doesn't want to modify your mortgage without you having any skin in the game.  What do I mean by this??  I mean that your lender believes that if it is going to take less money per month than owed that you better be willing to ding your credit.  Think about it.....if it was easy to obtain a mortgage modification (i.e., you call up your lender and let them know you are short on cash that month and that you can only pay $700.00 than the normal $1,000.00) then everyone would want to do it and mortgage companies would not get full payments.  So, as crazy as it is that your mortgage lender may not agree to do anything for you until you are behind on payments, this is the reasoning behind it.

            If you are going to attempt to obtain a mortgage modification you better be ready to bring the paperwork......again and again.  Most mortgage companies will want a hardship letter, pay stubs, bank statements, a listing of your expenses, income, a DNA sample (ok.....not a DNA sample, but you get the point).  Oh, and after you have submitted all of that information they are going to have misplaced it and ask for it again....only this time with updated bank statements and pay stubs.  And after you submit it that time you aren't going to hear anything for a few months.....and when you call the loss mitigation department to follow-up you will be told that no decision has been made, but that you need to re-submit your hardship packet.  Actually, it is not uncommon to have to submit the same paperwork upwards of five, six or seven times.  I wish I was making this stuff up.

          I often meet with clients at Halcomb Singler who are in the midst of this process and tell me that it will be ok because the mortgage company doesn't want my house....they have enough of them already.  I agree that mortgage companies would prefer to have interest income from your payments over your house.  But don't let this thinking fool you into believing that a mortgage company will hesitate to take your house.  Remember that a mortgage company is not a person...it does not have sympathy.  It does not see in shades of gray.....it sees in black and white and green.  It has a board of directors who wants to make a profit and if filing a mortgage foreclosure on your house is how money is going to be made then that is what will happen.

          The good news is that as frustrating and overwhelming the process can be is that it does sometimes work.  People are able to come to modifications with their mortgage companies and are able to make payments that they can afford.  In addition, even though I am aware of how difficult the process of obtaining a mortgage modification can be, there is really no downside to attempting to obtain a modification.  Even though the bank may ask for your paperwork 5 times, isn't this worth it if you want to stay in your house.  The worst thing that can happen is that the bank can say no.  And even if you are not able to obtain a modification, there is another option....Chapter 13 bankruptcy.

           Chapter 13 bankruptcy is a repayment plan that allows people to make payments over the course of 36 to 60 months towards debt and to receive a discharge of their debts at the end of that time.  Potential benefits of Chapter 13 to homeowners is that mortgage arrearages can be paid through the repayment plan with no additional late fees, Chapter 13 will stop a mortgage foreclosure in Indiana so long as the bankruptcy is filed prior to sheriff sale and if other debt is owed it will also be dealt with in a Chapter 13 bankruptcy.  Even better you don't need any cooperation or approval from your mortgage company to include them in a Chapter 13 bankruptcy.

              So, if you are having a difficult time obtaining a mortgage modification do not lose hope.  Even though I believe homeowners should attempt to work out their mortgage issues with their lender, it is not always possible.  In the event this blog hits close to home for you and you would like to explore your options with Chapter 13 or Chapter 7 bankruptcy I am happy to meet with you at Halcomb Singler's Carmel, Indiana office.  I will sit down with you to review your income, expenses, assets and debts and make a recommendation as to whether or not bankruptcy may benefit your situation.  If you live in Indianapolis, Carmel, Zionsville, Fishers, Noblesville, Tipton, Kokomo or somewhere close by call (317) 575-8222 to set up your free initial consultation or click here and we will contact you for an appointment.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.

Don't Assume Those Who File Bankruptcy Are Deadbeats

            Just about every person I meet with at Halcomb Singler, LLP, regarding bankruptcy has one thing in common.  Each person tells me that they have always been current on their payments, that their credit score was always in the 800s and that their parents raised them never to file bankruptcy.  In short, no one is ever very excited to meet with me to discuss their financial options and whether a Chapter 7 or Chapter 13 bankruptcy would benefit them.  But, in my opinion, this is a good thing.  It means that we live in a society where folks most often really do want to pay their debts.

          Unfortunately, people cannot always meet their financial obligations.  In the past few years I have filed bankruptcy petitions on behalf of people who have been out of work for months if not a year or more. I have filed bankruptcy petitions for people with emergency medical bills in excess of $50,000.00.  I have filed bankruptcy petitions for people forced to close down businesses that had always been successful because their clients could no longer afford to pay for their merchandise or services.  The bottom line is that the economy is not good right now and hasn't been good for several years.  Many people who never intended to miss a payment on a bill now have to choose between paying their electric bill and paying their medical bill.  I believe that the majority of the bankruptcy petitions I have filed in the past 3 years are mostly due, whether directly or indirectly, to job loss.

           Most people who find themselves in the situation of needing to file bankruptcy were making good money when they opened a credit card account and have been making payments on that account for years.  Most have done everything they can think of to make the payment including borrowing from relatives, cutting back on other expenses and entertainment and attempting to earn extra income.  Most people tell me that they spent the money on that credit card bill or received the services from that medical bill and want to be able to pay back that money because they owe it.  Overall, most of the people that I speak would do just about anything to avoid having to file for bankruptcy.

           However, every person has his or her tipping point.  By the time that folks call my office they have often received notice of a lawsuit, have had a bank account frozen, or have received notice of a mortgage foreclosure lawsuit.  When people call my office they are typically to the point where they cannot think of any other way out of debt, their creditors will only accept the full amount due on debts and are no longer taking payments, 25% of their paycheck is being withheld for garnishment and they are overwhelmed by a feeling of hopelessness.

           So, before you speak about a person you know who filed bankruptcy as a deadbeat remember that it is tough times right now in Indianapolis and the surrounding areas.  Ask yourself how long you could survive without any income.  How long would your emergency fund last?  How long would it take for you to use all of your retirement?  (If you have read my other postings you know that you should speak to a bankruptcy attorney before taking distributions from your retirement).  Ask yourself if given the choice if you would buy groceries or pay your credit card bill.  Ask yourself whether you, if put in that situation, would ever contact a bankruptcy attorney to consider your options.

           While I still believe it is a good thing that most people would rather pay their creditors than file for bankruptcy, I am often frustrated by how quickly people judge those who have filed for bankruptcy.  While I hope that every person that reads this post will lead a long and healthy life without ever enduring the stress that one considering bankruptcy feels on a daily basis; the reality is that in these difficult economic times you never know what could happen.  So, think about it before you assume that someone who has filed a bankruptcy is worthless, lazy or a deadbeat.

            If you are a person who is carefully considering bankruptcy and live in Indianapolis or the surrounding areas (Fishers, Noblesville, Carmel, Zionsville, Tipton, Kokomo, Anderson) call me, Erika Singker, at 317-575-8222.  I will meet with those considering bankruptcy at my Carmel office for a free one hour consultation and make a recommendation as to whether or not I believe filing a bankruptcy would assist with your financial difficulties.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.

Tithing Prior to and During Bankruptcy

            Many of my clients at Halcomb Singler, LLP, are very dedicated to tithing to their church or religious institution.  I have met with many people who continue to give 10% even though they are struggling with providing basic necessities for their families.  So it is understandable that these people are concerned that if they file bankruptcy they will not be able to tithe for an extended period of time or that their tithing will somehow be looked at negatively or that the bankruptcy trustee.  I am not here to judge whether or not it is a good idea to tithe while struggling financially and respect that different people may have different religious beliefs when it comes to tithing.  However, this issue seems to come up quite often with clients so I wanted to discuss it on my blog.

           I am happy to report that in many situations tithing is perfectly fine before, during and after the filing of a bankruptcy petition in the Southern District of Indiana.  However, as with anything else under the law there are limits and exceptions to this rule.  The first exception is that you must have been tithing prior to bankruptcy in order to continue to tithe during the bankruptcy.  The reasoning behind this is that the bankruptcy trustee will likely argue that if you have not been tithing all along and you just began tithing on the eve of the filing of the bankruptcy petition that these excess funds should go to your creditors instead of your religious institution.  So, if you aren't a regular churchgoer and haven't tithed in 10 years it is likely that claiming a significant charitable cash donation to your church just prior to the filing of your bankruptcy will cause your bankruptcy trustee to file an objection.  Bankruptcy trustees will often ask for records of tithing from your church and will also examine your last income tax returns to identity whether you have been tithing for a significant period of time.  But if you write a check to your church each month for $100.00 and have done so for the past two (2) years prior to the filing of the bankruptcy petition you should have no problem (unless you have very low income....see the next paragraph).

                In addition to examining how long you have been tithing, a bankruptcy trustee will also look at the amount of your monthly tithing.  I realize that to tithe means to give 10%, but many people use the word tithe while giving various amounts.  Of course, the more money you make the more money you are able to give to your church without drawing an objection from the trustee.  In fact, so long as you have been giving consistently, you are able to give up to 15% of your monthly gross income to any "qualified religious or charitable entity or organization."

                Finally, what exactly is a charitable entity or organization?  The bankruptcy code, in 11 U.S.C. 548 (d)(4) defines a charitable entity or organization as:
         1.  An entity described in section 170(c)(1) of the IRS Code of 1986; or
         2.  An entity or organization described in section 170(c)(2) of the IRC Code of 1986.

          What the heck does this mean???  Basically, it means that if your religious organization has a place of worship it is more than likely a charitable entity or organization.  Overall, the good news is that those who are devout in their religious beliefs are not judged by the bankruptcy code.  The bottom line is that if you have always tithed your 10% that does not have to change simply because you now need to file a bankruptcy petition.

          I am an attorney with Halcomb Singler, LLP, in Carmel, Indiana.  Before you take a 401k loan, use your retirement account to pay off debts or start borrowing from relatives I encourage you to speak to a bankruptcy attorney to see whether bankruptcy may be used to improve your financial situation.  Bankruptcy is not for everyone.  However, in my opinion if you are having a very difficult time financially you should be advised of all of your options.  If you live in Hamilton, Marion, Boone, Tipton, Howard, or Madison County feel free to contact Halcomb Singler, LLP, at 317-575-8222 or click here to fill out our information sheet and we will contact you for an appointment.  There is no consultation fee for those considering bankruptcy.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.

Do I need a credit card for an emergency? The Great Debate

            At Halcomb Singler, LLP, I assist people in filing for bankruptcy in central Indiana.  However, my clients also tell me their concerns about life after bankruptcy.  One common subject that comes up after a client files a bankruptcy is whether he or she should open a credit card in order to rebuild credit.

           Once an individual or couple has filed a bankruptcy petition they will likely find their mailbox full of credit card and auto loan offers.  The reason for this is that some creditors actively market towards those who have recently filed bankruptcy.  This shocks many of my clients who were under the impression that once they filed a bankruptcy that no creditor would touch them with a ten foot pole.  But think about it from the creditor's perspective....the bankruptcy debtor has just wiped off most if not all of his or her debts and has therefore likely freed up some additional cash flow in the debtor's life.  In addition, there are limits on how often an individual can file for bankruptcy (for example a Chapter 7 discharge may only be obtained every 8 years).  Finally, the credit score of those who have recently filed for bankruptcy is low, which means that the creditor will charge higher than average interest rates to a person who has recently filed bankruptcy.  In my opinion this seems like a creditor's dream!  The creditor has the opportunity to charge a high rate of interest to a person who has just cleared off all of their debt and cannot discharge the debt again for a number of years.  This sounds like a high profit loan with low risk for the creditor!

              My clients will often ask my opinion on how they should rebuild their credit after bankruptcy.  What I say is that I am no expert in credit scores.  I do know people who are and am happy to refer my clients to them after bankruptcy.  But I can only offer my opinion as a bankruptcy attorney practicing in Indiana.

             What I will say is that if you have spent more than the last 3 minutes reading this blog you know that I am not a fan of credit cards.  I don't believe there is any reason to have a credit card and I myself do not have a credit card....not even one credit card for emergencies.  However, I must admit that opening one credit card after bankruptcy and PAYING IT OFF IN FULL EACH MONTH will certainly help to rebuild credit post-bankruptcy.  However, you don't necessarily have to use a credit card to rebuild your credit.  If you have reaffirmed an auto loan or a home mortgage in your bankruptcy the best thing you can do to rebuild your credit is to continue to pay these bills on time.  Late payments post-bankruptcy are no help to rebuilding your credit....they may as well be a flag waiving over your credit score stating that you have not learned anything from the filing of your bankruptcy and you might be headed down that road again some time in the future.

            I think that once a bankruptcy discharge is received that credit should be rebuilt first by building up an emergency fund of about $1,000.00.  If you then wish to open a credit card for "emergency" situations (I put emergency in quotes because we all know that at some point the car will break down, the water heater will leak, the kids will fall and get injured, etc.) charge the emergency expense and then use your emergency fund to pay the bill when it comes in.  This way you actually have the money at hand to pay for emergencies but you are also re-establishing your credit by using a credit card to pay for the expense, but are also lessening the chances that you will get in over your head with credit.

            If you live in Carmel, Noblesville, Fishers, Indianapolis, Zionsville, Tipton, Kokomo, or anywhere else in central Indiana and aren't sure whether you should be considering bankruptcy or how it could help you call my office at 317-575-8222 or click here to fill out our contact information sheet and my office will contact you.  I am happy to sit down with you for an hour to review your financial situation and to let you know whether or not I recommend bankruptcy as a method of helping to solve your financial difficulties.

Halcomb Singler, LLP, is a debt relief agency.  It helps people file for bankruptcy under the bankruptcy code.  No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so.  The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.