With Halloween tomorrow the holidays are just right around the corner! The holiday season is an especially great time of the year and I hope that all of my readers are lucky enough to be able to celebrate them with friends and family. And although the holiday season is not all about gifts, it is certainly a part of the holiday season that can stress out anyone who is on a budget or trying to get out of debt
In a perfect world you would have been setting aside a certain amount each month to budget for your holiday gifts. However, I realize that we aren't in a perfect world. But it is better to start planning for your holiday spending now than to wait until December 15th. So, if you find yourself entering the holiday season without a clear plan for spending it isn't too late. First, figure out how much you can afford to spend. Be realistic. By setting your budget a little further out from the holidays your emotions are less likely to get in the way of the numbers.
If you do not have a lot of money to spend on holiday gifts there are some methods families can use to make a budget stretch. One method is to cut out gifts for every single family member. For example, in my family, all of the adults choose one name out of a hat and buy 1 gift for that person instead of buying 4 gifts. This is an especially good idea for families when no one in the family really needs anything. Another idea in a family that has many children is for the adults to skip buying for the other adults and to only buy presents for the children. Finally, don't go overboard on children....especially those who are young enough that they will not even remember the holiday. I think Dave Ramsey says it well when he asks parents not to spend all of their money on plastic stuff for their kids.
Another area of holiday spending is money spent on gifts for those who are not family. I'm talking about the dog sitter, the teacher, the tutor, the horseback riding instructor, the cleaning lady, etc. The list really could go on and on. There is often pressure to give and give and give no matter how much money you have. One great way to save money on these presents for those in your life you want to recognize at the holiday season is with baking. My mom used to bake many pumpkin bread loafs to distribute to the neighbors, my teachers, coaches, etc. This is an inexpensive way to be able to give and those who receive will certainly appreciate the gesture.
Finally, if you are truly strapped for cash this holiday season (I'm talking about having a difficult time paying the electric bill and putting the groceries on a credit card), be honest about this with your family. I know that this is a very, very difficult thing to do...especially if you have children. However, this is a hidden opportunity to teach children the value of money and that there are limits to the amount that can be spent on gifts. It is also a great opportunity to focus on the faith of the holiday season and remind your children that the holidays are not about gifts wrapped up in paper. If you do not have children, but typically exchange gifts with family, just be honest. Lets face it. The economy hasn't exactly been great for the last few years. If you can't afford to give gifts this year your family will understand.
If you have an idea for how to have a great holiday season without going broke please feel free to post a comment. I would love to read your ideas and I am sure the other readers of the blog would be interested as well. Have a safe and happy Halloween tomorrow and be sure to eat too much candy!
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.
Sunday, October 30, 2011
Wednesday, October 26, 2011
Don't Give Up if Your Indiana Mortgage Settlement Conference Fails
During my time as an attorney at Halcomb Singler and at my previous law firm I have attended several settlement conferences in Hamilton County, Indiana. If you have been on the receiving end of a mortgage foreclosure lawsuit in the last several months you may have noticed a document served with the initial complaint and summons giving you the right to request a settlement conference. I'll give you a nickel's worth of free advice.......fill out the settlement conference request form and send it back to the Court. If you want to try to stay in your house you should request a settlement conference.
An Indiana mortgage foreclosure settlement conference is nothing to be nervous about and might end in a way for you to keep your house. You can expect that this conference will typically be at your local courthouse, but will not be in a courtroom in front of a judge. In Hamilton County these conferences have been taking place in the jury assembly room or in a room off of the planning commission. So, don't stay up all night attempting to write out your plea or argument to the judge....because he or she will not be found at your settlement conference. What you can expect to find at an Indiana settlement conference is an attorney who represents your mortgage lender and a phone. The phone is there so that the attorney can call someone at the mortgage company who is required to be available at the time of your settlement conference to determine whether the lender wants to allow a modification to your loan.
Unfortunately, the attorney there for the bank probably knows little to nothing about your case. It is unlikely that the attorney has read the hardship letters you have written or reviewed your bank statements. If I am brutally honest it is unlikely that the attorney would know your name without looking at his or her file. Also, the attorney typically has no real bearing on what your mortgage lender will or will not do at the settlement conference.
The decision-maker at a settlement conference is typically going to be the person on the phone. In order for the person on the phone to give you an answer about whether they can in some way modify your loan it is important that you provide all of the requested documentation. Prior to the settlement conference you will receive a list of documents required to be submitted for the lender's review. These documents typically include recent pay stubs, bank statements, a budget of your expenses, a hardship letter, etc. Chances are that you have submitted these documents 5 to 10 times to your mortgage lender already. Even if this is true, just go ahead and submit them again and bring a copy of all of the documents you submitted to the settlement conference.
I believe that each homeowner should at least mentally prepare to tell the mortgage lender representative on the phone what the homeowner can do to keep the house. In my opinion, dwelling on all of the negatives that likely led the homeowner to get behind on the house should not be the focus of this conversation. Instead, the homeowner should focus on what they can do at that moment to get back to being current or what type of payment they could afford to make, etc. For example, if your mortgage payment with taxes and insurance is $1100.00 per month and you can no longer afford that payment, but would be able to afford $850.00 let the mortgage lender representative know that. If you could also get some money from a relative, from your own savings, because you have recently sold something, etc., then tell the mortgage lender that too. My point is that if you focus on how bad the economy is, how no one has a job, how broke you are and how it is all the mortgage company's fault (all of which may be true) then you are giving the mortgage lender representative all the information they need to report to the lender and the Court that you have no money and no means to repay and to report that the settlement conference was unsuccessful. And, you have a very limited time to get your point across because there is likely another settlement conference scheduled 15 minutes after yours started.
That's right. At the end of the 15 minute settlement conference if that one person on the phone from the mortgage lender isn't convinced that you can pay the lender then they will simply say something to the effect of, we are sorry, but we do not believe that a settlement is feasible in this case and we will report an unfavorable settlement conference to the court. It is really that simple. Again, there is no judge to rule at this time....it is really more of a unilateral mortgage determination and less of a settlement conference.
While some mortgage foreclosure settlement conferences in Indiana do end with great success including reduced payments, reduced interest rates, mortgage arrearages at the end of the loan, etc....the vast majority end in failure. However, just because your settlement conference has failed does not mean that you are doomed to lose you house. If you have income sufficient to pay your house payment and as little as $100.00 left after you pay for your living expenses (living expenses does not include credit card payments) at the end of a month, then you may qualify for a Chapter 13 bankruptcy. Although the sound of bankruptcy is scary to many people, a Chapter 13 bankruptcy is a method you may be able to use to force your mortgage lender to begin accepting payments from you again and to accept take payments over 3 to 5 years on your mortgage arrearage. The best part of Chapter 13 is that it does not require approval from your mortgage lender....only approval of the bankruptcy court.
Most individuals have little knowledge of how a Chapter 13 bankruptcy works and have many misconceptions including that you will lose all of your personal possessions, etc. If you are at your wits end with your mortgage lender and have gone through an unsuccessful settlement conference Chapter 13 may be able to help you. If you are a good candidate for a Chapter 13 bankruptcy it is possible to stop the mortgage foreclosure process and the stress that goes along with it and for you to make payments on your home again. If you live in Indianapolis, Carmel, Fishers, Noblesville, Zionsville, Kokomo, Tipton or the surrounding areas and would like to meet with me for a free initial consultation to better understand Chapter 13 bankruptcy and how it may help you stay in your home please feel free to contact me at 317-575-8222 or click here to fill out our form and our office 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.
An Indiana mortgage foreclosure settlement conference is nothing to be nervous about and might end in a way for you to keep your house. You can expect that this conference will typically be at your local courthouse, but will not be in a courtroom in front of a judge. In Hamilton County these conferences have been taking place in the jury assembly room or in a room off of the planning commission. So, don't stay up all night attempting to write out your plea or argument to the judge....because he or she will not be found at your settlement conference. What you can expect to find at an Indiana settlement conference is an attorney who represents your mortgage lender and a phone. The phone is there so that the attorney can call someone at the mortgage company who is required to be available at the time of your settlement conference to determine whether the lender wants to allow a modification to your loan.
Unfortunately, the attorney there for the bank probably knows little to nothing about your case. It is unlikely that the attorney has read the hardship letters you have written or reviewed your bank statements. If I am brutally honest it is unlikely that the attorney would know your name without looking at his or her file. Also, the attorney typically has no real bearing on what your mortgage lender will or will not do at the settlement conference.
The decision-maker at a settlement conference is typically going to be the person on the phone. In order for the person on the phone to give you an answer about whether they can in some way modify your loan it is important that you provide all of the requested documentation. Prior to the settlement conference you will receive a list of documents required to be submitted for the lender's review. These documents typically include recent pay stubs, bank statements, a budget of your expenses, a hardship letter, etc. Chances are that you have submitted these documents 5 to 10 times to your mortgage lender already. Even if this is true, just go ahead and submit them again and bring a copy of all of the documents you submitted to the settlement conference.
I believe that each homeowner should at least mentally prepare to tell the mortgage lender representative on the phone what the homeowner can do to keep the house. In my opinion, dwelling on all of the negatives that likely led the homeowner to get behind on the house should not be the focus of this conversation. Instead, the homeowner should focus on what they can do at that moment to get back to being current or what type of payment they could afford to make, etc. For example, if your mortgage payment with taxes and insurance is $1100.00 per month and you can no longer afford that payment, but would be able to afford $850.00 let the mortgage lender representative know that. If you could also get some money from a relative, from your own savings, because you have recently sold something, etc., then tell the mortgage lender that too. My point is that if you focus on how bad the economy is, how no one has a job, how broke you are and how it is all the mortgage company's fault (all of which may be true) then you are giving the mortgage lender representative all the information they need to report to the lender and the Court that you have no money and no means to repay and to report that the settlement conference was unsuccessful. And, you have a very limited time to get your point across because there is likely another settlement conference scheduled 15 minutes after yours started.
That's right. At the end of the 15 minute settlement conference if that one person on the phone from the mortgage lender isn't convinced that you can pay the lender then they will simply say something to the effect of, we are sorry, but we do not believe that a settlement is feasible in this case and we will report an unfavorable settlement conference to the court. It is really that simple. Again, there is no judge to rule at this time....it is really more of a unilateral mortgage determination and less of a settlement conference.
While some mortgage foreclosure settlement conferences in Indiana do end with great success including reduced payments, reduced interest rates, mortgage arrearages at the end of the loan, etc....the vast majority end in failure. However, just because your settlement conference has failed does not mean that you are doomed to lose you house. If you have income sufficient to pay your house payment and as little as $100.00 left after you pay for your living expenses (living expenses does not include credit card payments) at the end of a month, then you may qualify for a Chapter 13 bankruptcy. Although the sound of bankruptcy is scary to many people, a Chapter 13 bankruptcy is a method you may be able to use to force your mortgage lender to begin accepting payments from you again and to accept take payments over 3 to 5 years on your mortgage arrearage. The best part of Chapter 13 is that it does not require approval from your mortgage lender....only approval of the bankruptcy court.
Most individuals have little knowledge of how a Chapter 13 bankruptcy works and have many misconceptions including that you will lose all of your personal possessions, etc. If you are at your wits end with your mortgage lender and have gone through an unsuccessful settlement conference Chapter 13 may be able to help you. If you are a good candidate for a Chapter 13 bankruptcy it is possible to stop the mortgage foreclosure process and the stress that goes along with it and for you to make payments on your home again. If you live in Indianapolis, Carmel, Fishers, Noblesville, Zionsville, Kokomo, Tipton or the surrounding areas and would like to meet with me for a free initial consultation to better understand Chapter 13 bankruptcy and how it may help you stay in your home please feel free to contact me at 317-575-8222 or click here to fill out our form and our office 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.
Monday, October 24, 2011
Put Your Family Before Your Debt
As I have discussed before, when people meet with me to discuss bankruptcy at Halcomb Singler, they often tell me that they are against bankruptcy and want to repay their creditors because they borrowed the money and they should pay it back. I agree that bankruptcy should be near the end of the list as a means to solve debt problems (but before emptying out your 401k to repay 50% of what you owe). I often tell those I meet with that we are lucky that 99% of the population looks at bankruptcy as the last option. If many people in our society continued to run up credit cards and then file a chapter 7 bankruptcy every 8 years not only would credit be much more expensive, but this would be a sign that traditional hoosier values were evaporating. It is normal to feel shame and guilt about bankruptcy....however, if you have done everything you can to earn more money and have cut back on every expense and you still cannot make your payments you should hold your head up high and realize that sometimes negative situations occur and you need to figure out how to best move forward with your life.
One heart-breaking example I often hear from potential clients is that they are not taking their medications in order to pay credit card payments. I am not talking about vitamins here....I am talking about blood pressure meds or insulin. Medications necessary to control serious health problems. I have heard stories of what would traditionally be considered a middle class family going to a food pantry because there is no money left to buy groceries after making the car payment, loan payments, credit card payments, etc. While I encourage people to pay their debts if they are able to do so...I also emphasize that a family must be able to provide for its necessities and should not be forced to put its most basic needs behind paying the bills.
Another thing hit me this weekend while watching the show "Downsized." I have talked about this show before, but it is about a family that went from a great income down to next to nothing after the father's construction business closed. The family of 9 lost their home, a rental property, and a once thriving business when the recession hit. The show is about how they struggle to adjust to living within their new lower means while raising 7 children. I encourage you to watch the show.....there are great examples of real life choices that a family must make when dealing with a limited income and large family. And this week on "Downsized" the family's neighbors had to move out after short selling their home. Todd Bruce, the father on "Downsized," made it a point to go over to the house and help them move out. Todd discussed how when he moved out of his house he felt ashamed and felt like he didn't want to talk about his debt issues and eventual bankruptcy with anyone...but that since that time he has come to realize that people need to be able to speak about their financial struggles and should know that they are not alone in losing a house, struggling with finances or filing for bankruptcy in this day and age.
If you are to the point where you believe it may be necessary to speak with a bankruptcy attorney and you live in Indianapolis, Carmel, Anderson, Tipton, Kokomo, Zionsville, Fishers or Noblesville, Indiana, I am more than happy to listen to your story and answer your questions regarding bankruptcy. If you would like to meet with me just call Halcomb Singler's Carmel, Indiana office at 317-575-8222. I try to offer solutions, to help you look forward and not to judge. There is no fee for this initial consultation.
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.
One heart-breaking example I often hear from potential clients is that they are not taking their medications in order to pay credit card payments. I am not talking about vitamins here....I am talking about blood pressure meds or insulin. Medications necessary to control serious health problems. I have heard stories of what would traditionally be considered a middle class family going to a food pantry because there is no money left to buy groceries after making the car payment, loan payments, credit card payments, etc. While I encourage people to pay their debts if they are able to do so...I also emphasize that a family must be able to provide for its necessities and should not be forced to put its most basic needs behind paying the bills.
Another thing hit me this weekend while watching the show "Downsized." I have talked about this show before, but it is about a family that went from a great income down to next to nothing after the father's construction business closed. The family of 9 lost their home, a rental property, and a once thriving business when the recession hit. The show is about how they struggle to adjust to living within their new lower means while raising 7 children. I encourage you to watch the show.....there are great examples of real life choices that a family must make when dealing with a limited income and large family. And this week on "Downsized" the family's neighbors had to move out after short selling their home. Todd Bruce, the father on "Downsized," made it a point to go over to the house and help them move out. Todd discussed how when he moved out of his house he felt ashamed and felt like he didn't want to talk about his debt issues and eventual bankruptcy with anyone...but that since that time he has come to realize that people need to be able to speak about their financial struggles and should know that they are not alone in losing a house, struggling with finances or filing for bankruptcy in this day and age.
If you are to the point where you believe it may be necessary to speak with a bankruptcy attorney and you live in Indianapolis, Carmel, Anderson, Tipton, Kokomo, Zionsville, Fishers or Noblesville, Indiana, I am more than happy to listen to your story and answer your questions regarding bankruptcy. If you would like to meet with me just call Halcomb Singler's Carmel, Indiana office at 317-575-8222. I try to offer solutions, to help you look forward and not to judge. There is no fee for this initial consultation.
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.
Wednesday, October 19, 2011
Will Social Security Increase Affect My Indiana Bankruptcy
It was recently announced that those receiving social security would see an increase of almost 4% to their monthly social security checks in January, 2012. This is welcomed news for those receiving social security who have not seen an increase since 2009. And I believe some of my clients at Halcomb Singler, LLP, will be curious whether the increase in social security will in any way affect their current bankruptcy or a bankruptcy that they intend to file shortly.
The answer to this question depends on whether the bankruptcy has already been filed and what chapter has been or will be filed. For those filing Chapter 7 whom have already filed bankruptcy the change social security income will likely have no bearing on your pending Chapter 7 bankruptcy. The reason for this is because the social security increase will not take place until January, 2012. By that time if you have already filed a Chapter 7 bankruptcy you will have already attended your 341 meeting of creditors hearing and will likely have received a discharge of your debts or be well on your way to receiving that discharge.
If you are thinking about filing a Chapter 7 bankruptcy, but have not done so at this time the increase in social security may disqualify you for a Chapter 7, but I believe this will be the vast minority of people. As I have discussed in previous blogs about how it is determined whether you will qualify for a Chapter 7 or Chapter 13 bankruptcy, if the increase in social security will mean that at the time of the filing of your bankruptcy that you will have more than $100.00 left over at the end of every month after paying for your reasonable living expenses then you will no longer qualify for a Chapter 7 bankruptcy. However, social security income is not included in the means test, so the increase in social security will not be affected. The reason I believe even though it is possible that the increase in social security income may disqualify some, but not many, is that the increase is as a result of the increase in the cost of living. Therefore, it is important to evaluate your expenses carefully to make sure you are not underestimating expenses listed in your bankruptcy. In addition, the cost of medicare that is deducted from social security is also going up....so the near 4% increase will not net a 4% difference in income.
If you are currently in a Chapter 13 repayment plan and your plan has already been approved by the Court it is very unlikely that your payment will change. You should contact your bankruptcy attorney if you have questions. The same reasoning I used for Chapter 7 about your expenses and medicare having increased also applies to the pending Chapter 13 bankruptcy.
If you are contemplating Chapter 13 bankruptcy, the consequences in the raise of your social security will likely be an increase in your Chapter 13 payment equal to the net amount of your social security increase. Excess income, including social security income, is what Chapter 13 debtors must pay to the trustee each month according to their Chapter 13 repayment plans. Therefore, an increase in income will likely mean an increase in Chapter 13 payments....but not a large increase.
Overall, I believe that the increase in social security will have a very small impact on bankruptcy. Since the social security increase seems to be big news today and since it gets more and more difficult to think of things to blog about that are relevant in bankruptcy and/or money management I thought I would take advantage. Please leave a comment if there is something you would like me to address in a future blog posting and you might just give me my next idea for a blog. If you live in Carmel, Indianapolis, Noblesville, Tipton, Zionsville, Fishers, or the surrounding areas and are considering bankruptcy I would be happy to meet with you and discuss your options. Meeting with me does not mean you have to file a bankruptcy! However, I will go over your personal situation with you and answer your questions about bankruptcy without a fee. If you do decide you would like to file a bankruptcy our fees are flat amount (not hourly). If you would like to talk to me about bankruptcy at Halcomb Singler's office in Carmel give me a call at 317-575-8222 or click here.
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.
The answer to this question depends on whether the bankruptcy has already been filed and what chapter has been or will be filed. For those filing Chapter 7 whom have already filed bankruptcy the change social security income will likely have no bearing on your pending Chapter 7 bankruptcy. The reason for this is because the social security increase will not take place until January, 2012. By that time if you have already filed a Chapter 7 bankruptcy you will have already attended your 341 meeting of creditors hearing and will likely have received a discharge of your debts or be well on your way to receiving that discharge.
If you are thinking about filing a Chapter 7 bankruptcy, but have not done so at this time the increase in social security may disqualify you for a Chapter 7, but I believe this will be the vast minority of people. As I have discussed in previous blogs about how it is determined whether you will qualify for a Chapter 7 or Chapter 13 bankruptcy, if the increase in social security will mean that at the time of the filing of your bankruptcy that you will have more than $100.00 left over at the end of every month after paying for your reasonable living expenses then you will no longer qualify for a Chapter 7 bankruptcy. However, social security income is not included in the means test, so the increase in social security will not be affected. The reason I believe even though it is possible that the increase in social security income may disqualify some, but not many, is that the increase is as a result of the increase in the cost of living. Therefore, it is important to evaluate your expenses carefully to make sure you are not underestimating expenses listed in your bankruptcy. In addition, the cost of medicare that is deducted from social security is also going up....so the near 4% increase will not net a 4% difference in income.
If you are currently in a Chapter 13 repayment plan and your plan has already been approved by the Court it is very unlikely that your payment will change. You should contact your bankruptcy attorney if you have questions. The same reasoning I used for Chapter 7 about your expenses and medicare having increased also applies to the pending Chapter 13 bankruptcy.
If you are contemplating Chapter 13 bankruptcy, the consequences in the raise of your social security will likely be an increase in your Chapter 13 payment equal to the net amount of your social security increase. Excess income, including social security income, is what Chapter 13 debtors must pay to the trustee each month according to their Chapter 13 repayment plans. Therefore, an increase in income will likely mean an increase in Chapter 13 payments....but not a large increase.
Overall, I believe that the increase in social security will have a very small impact on bankruptcy. Since the social security increase seems to be big news today and since it gets more and more difficult to think of things to blog about that are relevant in bankruptcy and/or money management I thought I would take advantage. Please leave a comment if there is something you would like me to address in a future blog posting and you might just give me my next idea for a blog. If you live in Carmel, Indianapolis, Noblesville, Tipton, Zionsville, Fishers, or the surrounding areas and are considering bankruptcy I would be happy to meet with you and discuss your options. Meeting with me does not mean you have to file a bankruptcy! However, I will go over your personal situation with you and answer your questions about bankruptcy without a fee. If you do decide you would like to file a bankruptcy our fees are flat amount (not hourly). If you would like to talk to me about bankruptcy at Halcomb Singler's office in Carmel give me a call at 317-575-8222 or click here.
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.
Thursday, October 13, 2011
Is the Bankruptcy Trustee Going to Sell My Jewelry?
Many folks delay seeking bankruptcy advice from an attorney because they heard from a friend, neighbor, or any other random person who is not an attorney that if they file bankruptcy the trustee is going to sell all of their jewelry. Of course, not wanting to have to give up their engagement ring, grandmother's pearls, etc., they avoid even talking to a qualified attorney about whether or not bankruptcy could help them out of a bad financial situation.
First, I need to get on my soap box for a second in taking legal advice from people who are not attorneys licensed to practice law in the state in which you live and whom practice in the area of law in which you need advice. Translation=your cousin in California who practices family law really doesn't know a lot about bankruptcy law in Indiana. Your friend who filed bankruptcy 6 years in Indiana probably doesn't know a lot about bankruptcy law in Indiana. Even the financial expert on television who seemingly knows every law ever written (Suze Orman) probably does not know a lot about bankruptcy law. One would think it would be obvious not to take legal advice from someone who is not a lawyer....but in my experience folks will take legal advice from about any source. Let me break it down. Attorneys receive an undergraduate degree from college. During college they take an entrance exam similar to the ACT/SATs for law school called the LSATs. They then apply to law schools, which requires lots of time, writing an essay, etc. Once they get in to law school they spend 3 years studying how to read, interpret, argue and write like a lawyer. During the summers of law school they often work for lawyers and judges learning how to actually be a lawyer (which you really don't learn in law school). During law school their grades are typically dependent on one test at the end of a semester that counts for their entire grade for that semester. It is not uncommon for 20% or more of people who start law school to flunk out or quit because it is not the most fun thing anyone will do in their life. Before graduating from law school a person must take a test about ethics in practicing law. They then must apply to sit for the bar exam (which in Indiana is a test that takes 2 full days). Before they can even take the bar exam they have to fill out an extensive application and have an interview with a practicing attorney regarding their character and fitness to practice law. They must also have several letters from attorneys recommending that they be able to take the bar exam. A law school graduate will typically spend about 3 full months studying for the bar exam full time. Then, about 2 months after the law school graduate takes the bar exam he or she will find out whether or not they passed. Once they pass they have to pay some fees and take an oath before they can actually practice law because it is only at that point that they are licensed to practice law. Yes, the practice of law requires a license.
Ok....I know that the previous paragraph was really, really long and went into to more detail than you ever wanted to know about becoming a lawyer. I apologize. I needed to get that off of my chest. I just want people to realize that attorneys are not just "googling" answers to their problems and that most legal issues are far more complex than a non-attorney realizes. As the saying goes, "you don't know what you don't know." And, as I said above, lawyers don't know everything about every law. Myself, for example...I know very little about criminal law. I would never take a criminal case unless I spent several months studying criminal law in Indiana. There are simply to many areas of practice of law for every attorney to know everything....let alone for someone who has never studied law to know everything.
But back to the actual topic of this blog.....the trustee is not typically going to sell your jewelry in an Indiana bankruptcy. This does not mean that it is impossible, but it is unlikely. This is true because an individual is entitled to have $9,350.00 as of the date of this blog in personal property that is exempt from creditors. This means that between your jewelry, clothing, furnishings, home goods, equity in your vehicle, and any other "stuff" you have around your house that $9,350.00 is safe. If you file a joint bankruptcy petition that number is doubled to $18,700.00.
So, lets say that you have a really nice diamond engagement ring. Your husband paid $10,000.00 for it when you were engaged 10 years ago. Most of my clients would tell me that the ring is now worth at least $15,000.00 due to the rise in gold prices....and maybe they are right. I don't know how much the ring is worth because I am not a jeweler. So, it is often useful to take the piece of jewelry to a jeweler to have it valued. Typically, the jewelry is worth far less than my clients think. One big reason for this is because the jewelry is used. Think about it.....who really wants a used diamond engagement ring? Why did the person who owned it prior to you give it up? Divorce? Death? Another reason that it is not worth as much as most people think is that those purchasing used jewelry are not going to pay retail value. They are going to want to get a great deal. So, even if you paid $10,000.00 for the engagement ring it might be worth $6,000.00 today.
But, for sake of illustration, lets assume that you take your ring to a jeweler and it is actually worth $10,000.00 in its used condition. Does that automatically mean that the trustee will sell it? Not necessarily. The trustee is going to take into account that if they were able to sell your ring for $10,000.00 that they would have to give you a portion of the proceeds. If you valued all of your other property at $1500.00 then the trustee would have to give you $7,850.00 from the proceeds of the sale of the ring. This would leave the trustee with $2,150.00 from which they would need to deduct expenses in actually selling your ring. So, the trustee may be willing to sell your ring in these circumstances. However, the trustee would also give you the opportunity to pay the trustee some amount (probably less than $2,150.00) over a small amount of time in lieu of the trustee taking and selling the ring.
If you are a joint bankruptcy debtor even after you have used $10,000.00 of your $18,700.00 exemption for the ring, so long as you do not have more than $8,700.00 of other property the trustee will not have any claim to your ring. Again, even if you do have excess property the trustee will only sell something if they believe it will result in a meaningful distribution to creditors.
If you are filing a Chapter 13 bankruptcy you will not lose the ring. This is because in order to have a Chapter 13 repayment plan you must pay more to your creditors over 36 to 60 months than they would have received if you filed a Chapter 7 and your unexempt assets were liquidated.
Hopefully I have debunked the myth that if you file bankruptcy you will automatically have your jewelry seized and sold out from under you. But, as you can see from my rant on what it takes to become an attorney and my blog......bankruptcy is complicated. One move can have an effect on so many other areas of bankruptcy and people not licensed to practice law (and some attorneys not practicing in the area of bankruptcy) are simply not qualified to give advice. Luckily, there are many bankruptcy attorneys in central Indiana and the Indianapolis area who are more than qualified. I am only one of many attorneys who practice bankruptcy in this area and I am happy to report that in my opinion, most are very good at what they do. So, although you are entitled to file a bankruptcy on your own, I recommend that you meet with an attorney in your area who practices bankruptcy law. If you live in Noblesville, Carmel, Kokomo, Zionsville, Tipton, Anderson, Fishers or Indianapolis and you would like to meet with me about potentially filing bankruptcy I am happy to do so without any fee for the initial consultation. If you would like to set up an appointment to meet at Halcomb Singler's office in Carmel, Indiana, please call me at (317) 575-8222 or click here 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.
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.
Monday, October 10, 2011
Rolling Credit Card Debt into a Home Equity Loan
Every time I hear a banker speak at a function about the low rates on home equity loans I can't help but cringe a little. I know that rolling credit card debt into a home equity line of credit or second mortgage may sound like the answer to getting out of debt. It is true that you can find very low rates right now on home equity lines. These rates are almost certainly lower than your credit card interest rates. The banker will also almost certainly mention that if you roll your credit card onto you home loan then the interest can likely be deducted on your taxes.
I am not saying that rolling your credit card debt on to a home equity loan is always the wrong thing to do....I am just saying that it is something that needs to be carefully considered. Not unlike any decision in life, there are pros as well as cons to rolling your credit cards into a home equity line. In my opinion, the biggest con is that you have just handed over your home as collateral to the bank. If you get behind on credit card payments, the credit card company will typically sue you and may try to freeze your bank account or garnish a portion of your wages. On the other hand, if you get behind on your home equity line, the bank is going to foreclose to take your home. The bank isn't going to care that you have children, lost your job, that your dog died......the bank is going to foreclose on your house and if you aren't able to make the payment you will need to find a new place to live.
Another factor that is extremely important to consider is how did you get into credit card debt in the first place? You need to be brutally honest with yourself on this one. Don't tell yourself that the credit card debt was due to job loss if you could pay all of your bills with your spouse's income and your credit card debt was the result of your family continuing the same lifestyle with recreational activities and entertainment on half of the income. Don't tell yourself the credit card debt was due to emergency if the debt was incurred for car repairs, a medical expense of $3,000.00 or less or you have ever gone out to eat and paid with a credit card. What I am saying is that it should not be an emergency when you need a car repair or have a medical bill. Unfortunately, these expenses are going to happen. You need to be prepared by not spending every penny you make and contributing to an emergency fund.
Finally, if you do find yourself in a financial crisis and need to file bankruptcy, it is easier to get out from under credit card debt than a home equity loan. It is rare that individuals are required to pay back 100% of their credit card debt in bankruptcy. On the other hand, if you would like to keep a house after bankruptcy it is typically mandatory that you continue to pay both your first and second mortgage (there are some circumstances in which you don't have to pay the second mortgage). Therefore, if you are considering making your unsecured debt secured by your house you better believe that this will be a long-term fix to your financial problems and have a plan to move forward without incurring any more debt.
No matter how much money you have saved nor financial planning you have done there are some situations from which it is very difficult to recover without the assistance of bankruptcy. At Halcomb Singler I have met with many couples who wish they could turn back the clock and made the decision not to roll their credit cards on to their home, not to empty out (or take a loan from) their 401k, not to have financed that car over 72 months, etc. However, we cannot change the past....we can only move forward into your financial future. If you believe you may need the assistance of a bankruptcy attorney to move forward please feel free to call my office at 317-575-8222 for a free initial consultation at our Carmel, Indiana office.
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.
I am not saying that rolling your credit card debt on to a home equity loan is always the wrong thing to do....I am just saying that it is something that needs to be carefully considered. Not unlike any decision in life, there are pros as well as cons to rolling your credit cards into a home equity line. In my opinion, the biggest con is that you have just handed over your home as collateral to the bank. If you get behind on credit card payments, the credit card company will typically sue you and may try to freeze your bank account or garnish a portion of your wages. On the other hand, if you get behind on your home equity line, the bank is going to foreclose to take your home. The bank isn't going to care that you have children, lost your job, that your dog died......the bank is going to foreclose on your house and if you aren't able to make the payment you will need to find a new place to live.
Another factor that is extremely important to consider is how did you get into credit card debt in the first place? You need to be brutally honest with yourself on this one. Don't tell yourself that the credit card debt was due to job loss if you could pay all of your bills with your spouse's income and your credit card debt was the result of your family continuing the same lifestyle with recreational activities and entertainment on half of the income. Don't tell yourself the credit card debt was due to emergency if the debt was incurred for car repairs, a medical expense of $3,000.00 or less or you have ever gone out to eat and paid with a credit card. What I am saying is that it should not be an emergency when you need a car repair or have a medical bill. Unfortunately, these expenses are going to happen. You need to be prepared by not spending every penny you make and contributing to an emergency fund.
Finally, if you do find yourself in a financial crisis and need to file bankruptcy, it is easier to get out from under credit card debt than a home equity loan. It is rare that individuals are required to pay back 100% of their credit card debt in bankruptcy. On the other hand, if you would like to keep a house after bankruptcy it is typically mandatory that you continue to pay both your first and second mortgage (there are some circumstances in which you don't have to pay the second mortgage). Therefore, if you are considering making your unsecured debt secured by your house you better believe that this will be a long-term fix to your financial problems and have a plan to move forward without incurring any more debt.
No matter how much money you have saved nor financial planning you have done there are some situations from which it is very difficult to recover without the assistance of bankruptcy. At Halcomb Singler I have met with many couples who wish they could turn back the clock and made the decision not to roll their credit cards on to their home, not to empty out (or take a loan from) their 401k, not to have financed that car over 72 months, etc. However, we cannot change the past....we can only move forward into your financial future. If you believe you may need the assistance of a bankruptcy attorney to move forward please feel free to call my office at 317-575-8222 for a free initial consultation at our Carmel, Indiana office.
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.
Tuesday, October 4, 2011
You Can Pay Back Creditors After Bankruptcy...If You Want
WHAT?! I am sure this is what you are thinking right now. Why would I go through a bankruptcy and still pay creditors back afterward? Well, before you think I am completely crazy, notice that I said "if you want."
One thing that you must understand about bankruptcy is that if you file bankruptcy you must list each and every one of your creditors......this includes the vehicle you want to keep (listing a creditor does not always mean surrendering the property), your family doctor with whom you have set up a payment arrangement as well as Aunt Connie. Many of the potential clients I meet with at Halcomb Singler, LLP believe that they can include some of their debts and leave others out to be repaid. This is unfortunately not the way that bankruptcy works. Any debt not paid in full at the time of the bankruptcy must be listed on your bankruptcy petition.
Overall, I do not recommend repaying creditors after a bankruptcy. However, I do understand there are exceptions when it makes sense to pay back a creditor after bankruptcy even if the debt has been legally discharged. For example, if you have a wonderful family doctor and you want to continue to take your children to that doctor for the next 10 years you might want to give the doctor a call after the bankruptcy has been filed, let him know how much you want to go to him and see whether he will work out a payment arrangement. Another example that I see come up quite often is when my clients owe money to a family member. Many times even though a client is not legally obligated to pay back a relative, they want to do so. This is completely understandable, and many times a client of mine will work out an arrangement to pay a relative back after the bankruptcy. It should be noted that this is completely different than paying a relative or creditor back prior to filing bankruptcy, which is typically not a good idea and should be discussed with an attorney.
The point is that if you are struggling to pay your bills each month, but were waiting to speak with a bankruptcy attorney because of one creditor that you want to pay, there is really no need to wait. The reality is that the bankruptcy court (although I believe all involved want debtors to succeed post-bankruptcy) does not care whether you pay back discharged debts after filing bankruptcy. If you would like to meet to discuss bankruptcy (even if you are not sure that you want to file bankruptcy) feel free to call my office at (317) 575-8222 or to click here to complete our form 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.
One thing that you must understand about bankruptcy is that if you file bankruptcy you must list each and every one of your creditors......this includes the vehicle you want to keep (listing a creditor does not always mean surrendering the property), your family doctor with whom you have set up a payment arrangement as well as Aunt Connie. Many of the potential clients I meet with at Halcomb Singler, LLP believe that they can include some of their debts and leave others out to be repaid. This is unfortunately not the way that bankruptcy works. Any debt not paid in full at the time of the bankruptcy must be listed on your bankruptcy petition.
Overall, I do not recommend repaying creditors after a bankruptcy. However, I do understand there are exceptions when it makes sense to pay back a creditor after bankruptcy even if the debt has been legally discharged. For example, if you have a wonderful family doctor and you want to continue to take your children to that doctor for the next 10 years you might want to give the doctor a call after the bankruptcy has been filed, let him know how much you want to go to him and see whether he will work out a payment arrangement. Another example that I see come up quite often is when my clients owe money to a family member. Many times even though a client is not legally obligated to pay back a relative, they want to do so. This is completely understandable, and many times a client of mine will work out an arrangement to pay a relative back after the bankruptcy. It should be noted that this is completely different than paying a relative or creditor back prior to filing bankruptcy, which is typically not a good idea and should be discussed with an attorney.
The point is that if you are struggling to pay your bills each month, but were waiting to speak with a bankruptcy attorney because of one creditor that you want to pay, there is really no need to wait. The reality is that the bankruptcy court (although I believe all involved want debtors to succeed post-bankruptcy) does not care whether you pay back discharged debts after filing bankruptcy. If you would like to meet to discuss bankruptcy (even if you are not sure that you want to file bankruptcy) feel free to call my office at (317) 575-8222 or to click here to complete our form 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.
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