Why December is Typically a Slow Month for Bankruptcy

              In December most bankruptcy attorneys in in the slowest part of their year.  They are reorganizing their offices, staffs, and preparing for a new year.  Some like me are writing blog posts about bankruptcy in Indiana.  Many will even take a week or so off for Christmas.  Why??  It's probably for a few reasons.

              The first reason is the one that many people think of.....that filing bankruptcy is not a great way for most people to celebrate their Christmas.  Many people (understandably) would rather enjoy the holiday season without the stress of filing bankruptcy.  This is not to say that I never file any bankruptcy petitions during the holiday season.  In fact, I believe a few years ago I had a 341 meeting at the bankruptcy court in Indianapolis on December 23rd.

             The reason that many people are less aware of that bankruptcy filings slow down in December is due to income tax refunds for the next year.  If you live in the Indianapolis area and file a Chapter 7 bankruptcy in December you can probably kiss the majority of any 2012 income tax refund you may have received in 2013 goodbye (less any earned income credit you receive).  For many people who need to file bankruptcy an income tax refund is imminent due to decreased earnings in 2012 and they need that money for the necessities of life.  As a result, if no creditors are forcing bankruptcy through garnishment proceedings or through freezing a bank account, etc., I will normally counsel clients to file their income taxes as early as possible in 2013 and to use their refund on living expenses, home maintenance, car repairs, etc.  I often ask my clients to tell me how they would like to spend their income tax refund and to send me an e-mail so that I can "ok" it.  I like to see how my clients propose to spend this money because there are some things that the money could be spent on just prior to filing bankruptcy.  For example, paying back a relative, going on a vacation and buying a flat screen television are likely things I would counsel against.

  I have found that most people who are in need of filing bankruptcy have been struggling financially for some time and there are lots of things they have not been spending money on in an effort to pay creditors.  For example, clothing, a mattress, car repairs, home repairs, a new or used appliance to replace one that went out long ago, car insurance, and life insurance are common just to name a few.

              But in another week bankruptcy attorneys will once again be working like busy bees.  Since many folks put off the decision in favor of or against bankruptcy over the holidays there is typically a rush of people who want to meet with a bankruptcy attorney in January.  If you are one of those people who have been trying to dig your way out of debt with little success over the past year or two please contact me.  I offer an initial consultation free of charge at my Carmel office and I can explain to you the pros and cons of filing bankruptcy and can answer your questions regarding bankruptcy (including how much it would cost and how in the world you might be able to pay for it).  If you would like to meet with me call my law firm, Halcomb Singler, at 575-8222 or click here and we will e-mail or call you to set up 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. 

Walking Away From a House You Don't Want in Indiana

   

      Not surprising, a lot of the people who meet with me at my Halcomb Singler, LLP, office in Carmel, Indiana, are there because they are concerned that they have fallen behind on their home.  My clients have many different options regarding either attempting to keep their home or deciding, after considering their options, that they would rather let the home go and move on.  For purposes of this blog posting I will discuss a little bit about a few different ways to let a home go in Indiana.  Don't ask me why this photo is relevant.....I just couldn't resist posting an angry Donald to my blog.

     Unfortunately, surrendering a house is not as easy as it may sound.  You have probably heard of people "walking away" from their homes/mortgages, but it is not quite that easy in Indiana.  There are, however, several ways to surrender your home whether during Chapter 7 Bankruptcy, Chapter 13 Bankruptcy or outside of bankruptcy.  One of the most important points to keep in mind is that you are responsible for a home until the property is no longer deeded in your name.  When you buy a home that home is deeded to you immediately.  That deed is filed with the recorder's office in the county in which the home is located and it serves as notice as to whom owns that house.  The deeded owner of a home is responsible for cutting the grass, maintaining the home so that it does not become so run down as to qualify as a hazard, may be responsible if someone is injured on the property and is likely responsible for the payment of homeowner's association dues assuming that there is an HOA.  As a result of these obligations, it is important to understand when a house will no longer be deeded in your name.

       One way to get a house "out of your name" is to do a deed in lieu of foreclosure.  Just as it sounds, this means that you deed your house back to the bank and they agree to take the house back from you instead of filing a mortgage foreclosure.  This sounds like a great option at first.  However, it is important to point out that the agreement you sign must actually say that you will not be liable for any deficiency balance when the house sells.  It is also easier said than done to get a mortgage company to agree to this and send the required documentation.

        Another option is what is called a short sale.  Most Hoosiers have heard of this option.  You list your house for sale and when you get an offer from a potential buyer for less than is owed on the house you must get approval from the lender or lenders to sell the property for less than the home is worth.  This can be a very time-consuming process.  If you have attempted to call a mortgage lender's loss mitigation department in the last 3 years you understand that you are going to wait a long time to speak with someone, the person you are speaking with may or may not have any clue about short sales (even though they are in the short sale department) and the lender probably lost all of the documents you sent them regarding the short sale 6 times.  I admit I am maybe being slightly overly cynical with this, but I have had all of these things happen.  I also received the same letter each day (just with a different date) 30 days in a row from a lender when I was attempting to negotiate a deed in lieu of foreclosure for my client....so I guess I am allowed to be a bit cynical.

         Option 3= do nothing.  In Indiana if you don't pay your mortgage for long enough the lender will probably file a mortgage foreclosure.  I say probably because there are certainly some houses that even the bank doesn't want back.  However, if you own a decent home the bank will likely foreclose and eventually obtain a judgment and sell the house at sheriff sale.  When the house is sold at sheriff sale it is no longer going to be in your name, so you won't have to worry about cutting the grass, etc.  However, if the house sells at sheriff sale for less than you owe then you may be liable for the deficiency balance on the mortgage and the lender may chase you down to try to collect.

        Additionally, there are potentially tax considerations to think about in any of these above options.  Typically, if you owe a debt that is forgiven then you owe income tax on the difference.  For example, if you owe Bank of America $120,000.00 on your home and then do a short sale for $100,000.00, Bank of America may send you a surprise that next January of a 1099C for $20,000.00, which is the amount equal to the loan.  The Mortgage Relief Forgiveness Act of 2007 basically says (I am oversimplifying this greatly) that if you surrender your home through deed in lieu of foreclosure or short sale and that the home was your primary residence that you will not owe income tax on the forgiven debt.  However, that Act expires at the end of 2012 and no one knows how and if it will be extended or changed.

          Of course, both individual and joint bankruptcy debtors have the option of "surrendering" their homes in bankruptcy.  Again, just because the box marked "surrendered" is checked on the bankruptcy petition does not mean that you can simply walk away from the home and not worry about it ever again.  You have to cut the grass until the home goes through mortgage foreclosure and eventual sheriff sale or you will get a ticket from the local municipality.  This process can take months.  You are also potentially going to be liable for any homeowner's association fees that are incurred after the date of the filing of your petition.  As a result, many homeowners who surrender their homes in bankruptcy opt to continue to live in the homes until just prior to the sheriff sale.  This way they can maintain the home, not to mention having a "free" place to live for what would likely amount to several months.  And, when a home is surrendered in bankruptcy there are no tax implications.

          As you can see, there are a LOT of options even once you decide that you don't want to keep your home in Indiana.  It is difficult to write about these options generally.  If you are living in the Indianapolis area and are considering your options to get out of your home I would be happy to meet with you at my Carmel office to go over potential options.  Just give me a call at (317) 575-8222 or click here to set up 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.  

No Life Insurance? No iPhone!

               I know, I know.  What in the world could this post have to do with filing bankruptcy in Indiana?  The answer to that question is plenty.  As a bankruptcy attorney at Halcomb Singler, LLP, I go over the expenses of each one of my clients with them in order to properly advise them about bankruptcy.  One thing that I notice over and over again is that very few people have life insurance policies that would be adequate to support their families.  Many people have an insurance policy through work that would cover funeral expenses, but few people I meet with at Halcomb Singler, LLP, have any other life insurance.  However, many of those same people spend money on getting their nails done, professional highlights at expensive salons....and, of course, every NEEDS an iPhone.

               I am not saying that no one should ever have an iPhone.  However, I am saying that you should only have an iPhone if you have the other things in life that are necessitates covered.  For most people, life insurance should be looked at as a necessity.  However, many people chose to spend their money on the "latest and greatest" electronic or entertainment rather than life insurance.  I find this sad. To me this says that person cares more about stuff than his or her family's well begin should he or she pass away.  For example, in a family of 4 where the father works full time in sales and is gone during the week and the wife stays home to manage the home and the 2 children what would happen if either parent died without adequate life insurance?  If the father dies with only enough life insurance to get him in the ground it looks like it is time for the family to move.  Time for mom to get a job or a new husband asap.  This may seem a bit dramatic, but for a mom who hasn't worked in many years to go out and get a job that can keep the family in the same home is unrealistic for most people.  Not only does the mom have the disadvantage of having been out of the workforce for years, but now she is going to have to pay someone else for child care.

              In the example above, many people make the mistake of thinking that the mom doesn't need life insurance because she isn't working and doesn't bring any financial gain to the family.  On the contrary, mom is caring for the children.  If mom passed away then dad could only continue to work and earn money if he is paying money for someone to take care of the kids.

              Another scenario that comes to mind is that of the single mom.  Single moms need life insurance to leave to their children in the event of passing.  It is best that a guardian has been designated and that the money is left in trust to the guardian for the benefit of the child, but that goes beyond the scope of this blog into the realm of estate planning.  I know that single moms are often operating on a very tight budget.  However, term life insurance is very affordable and simply must be budgeted for!

             It is not fun to think about these scenarios, but they do happen....and they do result in people having to file for bankruptcy.  I was at a bankruptcy hearing within the past month where the person who filed bankruptcy was a young widow, probably under the age of 40.  The trustee asked that debtor if she was entitled to any life insurance from the passing of her late husband.  The debtor started to tear up when answering that she had not received any life insurance money.

            Let me remind you that I don't sell life insurance.  I have nothing to gain from people buying life insurance.  But it saddens me to sit with people day after day who are simply very financially vulnerable in the event of death.  I wanted to blog on this topic because it is yet another example of how many American's spending decisions are out of whack.  Americans will spend money on cable television and iPhones and not make sure the family is taken care of should there be an unexpected passing.    That is the last way your family should remember you.....as a person who didn't care about their financial well-being and as a person who may have forced bankruptcy as the only solution.

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 Impending Bankruptcy Flood of 2013??

         

          While it is probably safe to say that the government's failure to fix the fiscal cliff, the fact that milk is about $3.00 per gallon, or gas that seems to always hover above $3.50 per gallon that bankruptcy filings may increase in Indiana in 2013.  However, that is not what inspired this blog post.  While at a bankruptcy hearing a few weeks ago one of the Chapter 7 bankruptcy trustees brought up a great point.

              Many reading this may not know that there was significant change to bankruptcy laws in October, 2005.  In 2005 it was thought that the change in law was going to make it very difficult to file bankruptcy and especially difficult to qualify for Chapter 7 bankruptcy.  In my opinion, didn't really make it harder to qualify for Chapter 7 bankruptcy, it really just requires more information from potential bankruptcy clients.  Nonetheless, it seemed like everyone who ever thought about filing bankruptcy in filed in 2005.  The hearing rooms that the trustees use to hold bankruptcy hearings were seriously overflowing at the end of 2005 and beginning of 2006.  Trustees were holding hearings every day in order to try to keep up.  I think that additional trustees were also added in order to make it through the masses of people who filed bankruptcy up to the law change in October, 2005.

              Now to the reason I believe 2013 will be a high bankruptcy filing year.  The reason is that an individual can only file a Chapter 7 bankruptcy petition once every 8 years.  This is measured from the date of the filing of the old bankruptcy petition to the date of the filing of the new bankruptcy petition.  Since 2013 is 8 years after the 2005 filing extravaganza I believe 2013 will be a very busy year for bankruptcy attorneys in Indiana.  It is safe to say that there are many people who are being hounded by creditors right now who have gone to meet with a bankruptcy attorney only to be turned away because they can't file a Chapter 7 bankruptcy petition again until 8 years have passed since their last filing.  In fact, I am filing a bankruptcy petition at the end of the week for a client who first filed Chapter 7 bankruptcy about 8 years ago.  So starts the flood?

              Combine the fact that so many people filed bankruptcy in Indiana (and everywhere else) in 2005, and add to that the stellar economic situation we have been dealing with since then.  The housing meltdown, high unemployment, super high cost of food, and record high student loan debts and it does not take a rocket scientist to predict that bankruptcy filings will be high in 2013.  If you live in Indianapolis or the surrounding areas I would be happy to meet with you to discuss bankruptcy.  Just give me a call at 575-8222 to set up your appointment.  Merry Christmas and Happy New Year!

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. 

Avoid the Ostrich Effect Dealing With Debt

           

           Just about every person I meet with at Halcomb Singler, LLP, is dealing with debt in some way or another.  What these folks have in common with each other is that they have all tried to fix the debt problem they are dealing with on their own.  I am sure most if not all have sat down and written down their income and expenses and tried to figure out a way to pay all of their bills.  However, many of those people come to the conclusion that they just don't have enough money coming in to pay their bills and that is when danger of "the ostrich effect" sets in.

           I am sure I am not the first one to use this terminology.  But, I call it the ostrich effect when people decide there is nothing that they can do about their debt and instead do nothing.  The ostrich effect is different depending on the person.  However, some signs that you or someone you love may be dealing with the ostrich effect are:

1.  Not opening bills.  Just letting them pile up in a drawer;
2.  Not answering the telephone for fear of collection calls;
3.  Full voice mail (result of #2);
4.  Letting the mail pile up in the mailbox and refusing to bring the mail into the house;
5.  Have received a lawsuit to collect on a debt and don't do anything to address it;
6.  Wages are being garnished;
7.  One spouse is hiding bills/bank account statements or any other financial reports from the other.

           The bottom line is that those dealing with major financial stress often become very overwhelmed, which causes paralysis.  But the good news is that there is almost always some way to deal with debt.  The solution may be to get a second job, selling a vehicle, cutting back on expenses such as canceling cable or internet, or to file Chapter 7 or Chapter 13 bankruptcy, or to negotiate with creditors to pay less than owed on debts.

           I typically tell the people I meet with at my Carmel, Indiana law firm that once they have showed up at my office the hardest part is over.  The hardest part is picking up the phone and asking for help.  I don't tell every person that comes in to meet with me that they should file for bankruptcy.  However, sometimes it is the best option to give that person relief from the stress of debt.  But I can say that people who meet with me typically have a plan regarding how to deal with their debt, which helps alleviate stress and also curtails the ostrich effect.

             If you are drowning in debt, regardless of your income, I may be able to help.  If there is one thing that I know it is that doing nothing to solve your debt problem is not the solution.  The stress that having debt causes a person often puts strains on their personal relationships (often causing divorce), seems to cause weight gain, and overall puts a person in a bad mood.  I offer free initial consultation to those struggling with debt.  If you want to set up an appointment just give me a call 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. 

Kick Out Your Adult Children...Your Wallet Will Thank You

         
           As a bankruptcy attorney in the Indianapolis/Carmel area of Indiana, I meet with lots of people who are having financial problems.  In my initial consultation with these people at Halcomb Singler, LLP, I go over their income, expenses, debts and assets.  As a part of this, I ask them to tell me how much they are paying for living expenses such as mortgage payment, car payment, cell phone payment, etc.  Over the past few years I have noticed a trend that is causing financial difficulty.  Adult children are staying in the household longer and longer....and the parents are paying for the adult children.

              More and more I am hearing stories about adult children living with their parents at ages 23, 25, and even up to 30.  On top of the fact that virtually all of the kiddos are living rent-free, they are also sapping off of mom and dad for expenses such as food, car insurance, cell phone payments, clothing and whatever else mom and dad will offer.  Many people I meet with are also putting their personal finances at risk to co-sign for student loans or car loans.  Many of these adult children don't have jobs and really do not contribute in any way to the household.  In my opinion, this is a big problem.

             Yes.  I am aware that the job market for 20-somethings is not the best at the moment.  However, I don't think that parents who allow their children to live long-term in their homes are doing themselves or their adult children any favors.  First of all, parents have paid for their adult children for at least 18 years.  They typically have put themselves last financially for this amount of time and have gone without themselves rather than allowing their children to go without.  And the bottom line is that with the current economy most parents need their income for their own expenses and retirement without the added impact of paying for an adult child.  In addition, the adult children are not gaining any positive character traits while sitting on the couch at home eating the food mommy and daddy bought.  Isn't it better for that adult child to "have some skin in the game" by paying something to live in the house?

              Now, I am also not an advocate of such tough love that you are throwing your adult child out on the street without any notice.  It seems to me that a timeline is in order.  For example, perhaps you agree that for the first 4 months your child lives with you that they do not have to pay for any rent or food.  For the record I am never an advocate of paying for you child's cell phone, car, car insurance or gas.  These things should be paid for by the child to promote responsibility.  After the initial period of 4 months collect rent in the amount of $300.00 per month.  After another 4 months make the adult child responsible for $500.00 per month plus a pro-rata share of the utilities.  I would think that after living at home for a year on these reduced expenses that any adult child should be able to get their finances together in order to put a deposit down on an apartment.  Make one year the cut-off.  The adult child must be out of the house within one year.  No exceptions.  Make sure you are up front with the adult child and let him or her know your timeline from the beginning.  The timeline can vary based on what your situation, but it seems to me that there must be a timeline.

             Parents need to remember that they are not going to be around forever.  The job of parents is to raise their children to be productive and self-sufficient members of society.  How is that happening if 27 year-old Junior is staying up until 3 am playing video games and sleeping until noon?  How is that happening if Junior did get a job that pay $8.00 per hour and works 25 hours a week and is content to live at home?  Lets teach adult children that it is more than ok to work hard.  Lets teach them that if they are making $8.00 per hour that they might need 2 or 3 jobs until they can find a higher paying job.  Lets teach them that they have to earn what they have and build character and future leaders in the process.  And finally, lets not either bankrupt mom and dad or put them in a position where they have to rely on Junior in the future because supporting Junior in his adulthood prevented them from saving enough for retirement.

             Lets stop making excuses for the shortcomings of our adult children and help them succeed.  Does anyone have a success story of how they got their adult child out of the house and on a path to financial freedom?  I'd love to hear it.  Please post it in the comments section.  Happy Thanksgiving!

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 Let the Holiday Follow You Home In January

           

         Dave Ramsey says in his "Financial Peace" videos that if you use credit to pay for your vacation it will follow you home the next month in the form of a credit card bill.  I am adapting this slightly to allow for Christmas....but you get the idea.  As a bankruptcy attorney in Indiana, I can attest that nothing is worse than overspending in December only to receive the bill in January and realize it.  So, how do you avoid overspending at Christmas time?

              The first thing I will say is going to be painful, but here goes.  If you are truly broke this Christmas don't buy any gifts.  Yep.  I said it.  If you don't have any money to buy presents for your family then tell them you are short on funds and they will understand.  I can just hear all of the readers in unison right now saying, "But what about the kids?!?  I have to buy the kids gifts for Christmas!"  Ok.  I am not heartless.  I agree you should probably try to get your kids a few presents (and only your kids).  But I have seen Christmas trees at houses with 2 children that rival a toy store in their volume of gifts.  Do not go that route.  I suggest letting your children know that this year you are going to concentrate on the religious part of the holiday and are going to scale back on gifts.  Another tip to help stretch the presents for the kids is to talk to the grandparents.  Let them know you are having a hard time and that you don't want to go into debt for Christmas.  I think many grandparents would allow you to add your name to a gift or two.  Lastly, this is a great opportunity to make sure you stretch your dollar on the gifts you do buy.  Don't just go out and buy the tea set Suze wants this year.  Wait for it to go on sale and look into whether there are any other discounts available.  Finally, on Christmas (depending on the age of your kids) you may think about waiting until after dinner to open gifts.  A lot of the fun is in the anticipation, isn't it?  Make sure that you open gifts one at a time so that you are able to stretch out the fun!

               For those of you who do have a bit of money to spend on Christmas, I hope you have set a budget by now.  If not get out a piece of paper and list out the people who you need to buy for as well as a dollar amount.  In a perfect world you would have started to save by at least October by taking cash each month and putting it in an envelope.  Then when you do go out shopping plan in advance what you plan to buy for each person on your list and then use the cash to pay.  Once the cash is gone NO MORE  PRESENTS!  Seriously, if you are out of cash and haven't bought your kid's teacher, the mailman, the paper carrier or the bus driver a gift life will go on.  Consider baking cookies or bread for gifts for people you want to acknowledge on Christmas without breaking the bank.

              I certainly didn't invent the Christmas envelope idea.  One personal finance expert in Indianapolis, Peter Dunn, does what he calls a holiday savings league.  In the event you signed up for his saving league using this program you may even win gifts.  I do subscribe to Peter Dunn's blog (you may know him as Pete the Planner) and I find he has some great ideas, advice and inspiration.  I recommend that you read his blogs as well.

              I wish you all a Happy Thanksgiving, Christmas, Hanukkah and whatever other holidays you might be celebrating this season.  I hope that we are all able to remember that this time of year is not about the number of gifts under the tree, but is about the time spent with out family members and in our faith.  At the same time I do understand that dealing with debt (especially during the holiday season) can be overwhelming.  If you live in Indiana and are struggling with debt and considering bankruptcy I offer free consultations at the Carmel office of Halcomb Singler LLP where I can answer your questions about bankruptcy and debt and give my recommendation regarding whether you would benefit from Chapter 7 or Chapter 13 bankruptcy.  Feel free to call me at (317) 575-8222 to schedule your 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. 

The Fiscal Fast

           

            I have a new favorite television show.  It's called "Extreme Cheapskates" and is shown on TLC.  This weekend I found myself glued to the TV for an embarrassing amount of time watching this show.  The name says it all.  The show follows people who live in extreme ways to save money.

              For example, one woman in New York went through dumpsters at high end grocery stores to find food instead of buying it (that's the photo above).  Another man who lives with his wife and two children went without a couch and had only a card table and folding chairs in his living room.  When that man took his family out for dinner, as he did only once a year, he paid the $98.00 bill at a chinese buffet all in change.  Lastly, another person cut up fabric to use as toilet paper and washed it after use instead of buying toilet paper.

              I was obsessed with this show.  As a bankruptcy attorney, I am always looking for tips to give people on how they can save money so that after bankruptcy they can start out on the correct financial track.  However, most of the things the people in this show did were a bit too much in my opinion.  But there was one idea that really sparked my interest as a potential great way to save money:  the fiscal fast."  One of the people on the show took one week every year and agreed that neither him nor his wife would spend any money that week.  The couple used the "fiscal fast" as a way to cut back on spending by using what they already had on hand.  Toward the end of the week the husband rode his bike around town looking for spare change and ended up buying two goat heads to cook for dinner with about seven dollars he had found in change.

             While you are not going to catch me eating a goat head, I really think the fiscal fast is one of the best money-saving tips I have heard.  I often believe that if you can make a game out of it, that you are more likely to spend less and save more.  What better game than having a fiscal fast?  Take some fixed amount of time and agree that the family is not going to spend any money.  Your family may start out with one day on its first fiscal fast and slowly move up from there.  There are many families that swipe the debit or credit card 20 times a day.  For them going only one day without spending any money would be an exercise in restraint.

             The reason I love the idea of the fiscal fast so much is that it not only helps you save money because you aren't spending any more for a week; it also makes you realize how often you would typically spend money in that same week.  I think many of us spend and spend because we are used to spending and don't even realize how often we spend money at all.  The fiscal fast, in my opinion, will really open the eyes of those who are overspending.

            Has anyone ever done a fiscal fast?  If so I would love to hear about it.  How much money were you able to save?  Did the fiscal fast impact your spending habits long-term?  Did you find the fiscal fast worthwhile?  Just post your answers to the comments section below.

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. 

Your Money and Home Improvement

           

            Of course everyone needs an envelope, if you budget this way, for home improvement.  I don't care if you bought a brand new home or if your home is 200 years old.  You are going to need money for home improvement and/or maintenance because stuff around your house will break.  And when this stuff breaks around your house you should not consider it an unexpected expense.  You should have budgeted for the expenses because you know you aren't going to be able to live in your house for 15 years without having to replace a water heater, fix a leak, paint the house, get a new thermostat, etc.  The list is really endless.

              But what if, due to your master budgeting skills, you have decided to set aside money for a home remodel.  You have decided that the time has come that to update your kitchen and you have been putting away money each month for the past 5 years in order to pay cash for the improvements.  You have done an excellent job!  You are going to be able to update your kitchen using $50,000.00 saved and you aren't going to need to tap into home equity or have another mortgage put on your house to do it.

              But, your work is not over then.  You still need to be smart with your money in this instance because it is a very large transaction.  You need to obtain several bids from several contractors that lay out exactly the work to be done.  You need to make sure that you feel comfortable with the company you choose and you need to make sure that your agreement is in writing.  In addition, I recommend that you never give a contractor any money that is not for the company's profit on the job.  What I am saying is that I believe it is prudent to pay for the materials or subcontractors that will be used on your home remodel directly.  It would be important to bring that to the contractor's attention prior to agreeing to or executing a contract.  I say that if a contractor gives you trouble about paying for the materials and subcontractors directly that you should use a different contractor.

             Why?  Because you want to make sure that your money is only being used for your construction project.  Chances are that your contractor has many other jobs going on and he or she probably doesn't open a separate account for each job.  He or she probably puts your money into a general fund with a lot of other people's money.  So, what happens if another client with a really big job doesn't pay?  It means the contractor doesn't have enough money to finish your job.

           Or worse, you may have accidentally selected a contractor who is willing to steal your money.  Perhaps if you give the contractor the entire $50,000.00 up front he or she will disappear into the night never to be heard from again.  There goes all of your hard-earned money.  Even though you would have a claim in a lawsuit against them they may have already spent your money and may not have any more for you to recover.

           In my opinion, prior to signing an agreement with a contractor for a major job you should also do your homework.  Search local court dockets to see if (and possibly how often) the contractor and his or her company has been sued.  Lots of lawsuits can be a red flag.  You should also make sure that you have a copy of their certificate of insurance.  You should also ask to see some of the work they have done in the past and get reviews from their past customers.  Finally, I believe it is a good idea to have an attorney review the contract before you sign it.

           There are many great contractors out there that are well run, well organized and would not think of stealing your money.  However, there are also those out there who fly by the seat of their pants and would be willing to use your money for their own financial gain.  As the old saying goes, "buyer beware."  Don't let all that budgeting go to waste.  Do the extra work to minimize the potential risk in hiring a contractor for a major project.

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. 

Does Bankruptcy Affect Children?

           


         I will start off by saying that I am abnormally qualified to answer this question.  Not only am I a bankruptcy attorney with Halcomb Singler, LLP, but I was 8 or 9 when my own father filed for bankruptcy.  Part of the reason I very much enjoy my practice is that I am able to take stress off of peoples' shoulders that has been crushing them for months or even years.  I believe I am able to identify with the position they are in because I lived through my father's bankruptcy as a child.

             Every child is different and it has been almost 25 years since my experience....so take from this what you will, but I felt like sharing my experience might be able to help some people facing bankruptcy.  As a child I did understand that my family was dealing with financial difficulty.  I specifically recall that we were scheduled to take a vacation, which was abruptly cancelled the day before we were to leave because a business owned by my father and his family members had failed.  My father and some of our other family members signed a personal guaranty on bank loans that added up to millions of dollars.  At the time it happened I had no idea how much was owed nor did I have any idea of the amount of stress mounting on my parents up until that day.  I seriously only knew that we weren't going on vacation because Dad's business wasn't doing well.

            After the initial announcement we weren't going on vacation I do not remember much else at all about the fact that my father filed for bankruptcy.  However, I do remember how stressed out he seemed prior to that time.  I do remember being concerned for my father's well-being because he seemed so stressed out and on edge.  And I also remember that he seemed depressed because he was not able to pay back the loans and because the business had failed.

            While I do recall being concerned about my father, I don't remember feeling like there was a big financial difference for our family.  I actually didn't even notice it if I got less school clothes or if I didn't get as many Christmas gifts for several years (this may or may not have happened.....I seriously don't remember).  I also recall that we didn't go out to eat after that time for a long, long time....but I wasn't bothered by that fact.

            I also remember that at some point after the bankruptcy was over my father seemed much less stressed out than he had been prior to the bankruptcy.  I remember that I was able to get to see my father more because he wasn't working all the time trying to save his failing business.  I was also never embarrassed that my father had filed bankruptcy.  

           So, for what it is worth I don't feel like I was scarred as a child because my father filed bankruptcy.  If anything, my father filing bankruptcy actually improved my life because I got to see my father more often and my parents had a better relationship after the financial strain had been extinguished.  I know I have met with some clients who are very concerned about the impact bankruptcy will have on their children.  This is especially true if the family is going to surrender their home in bankruptcy, which will require the family to move.  But in my opinion your children don't really understand what bankruptcy means. If they are anything like I was as a child what will stick with them is whether or not their parents are happy and not how big the budget is for entertainment, new school clothes or holiday celebrations.

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 Debt Sucks

               I think one of the worst things about debt is that it eliminates options.  Think about how many people are involved in jobs that they really do not like because they earn a lot of money and need their income to make payments on their debts.  Don't get me wrong, there is nothing wrong with making a lot of money.  Making a lot of money and enjoying your profession is an amazing combination that is reserved for a very few people.  Unfortunately, I believe that there are more people who feel like they are stuck in a job (whether it be high paying or minimum wage) so that they can continue to make payments to service their debt.

                Think about the options that NOT having debt allows.  I have taken just a few minutes and I am able to come up with a laundry list of things one might be able to do if their income is not being eaten up every month by debt:

1.  Contribute to your favorite charity or church;
2.  Decide to retire young;
3.  Travel;
4.  Opt to stay home with your children while they are young;
5.  Opt to stay home to take care of an elderly or sick relative;
6.  Take a leave of absence from your career;
7.  Leave your current job to take another job if you are unhappy;
8.  Leave your current job to open your own company if you are unhappy;
9.  Allow yourself to take your time in finding the right job instead of just any job if you get laid off;
10.  Decide how you will allow yourself to be treated (i.e., not working for someone who is unkind, belittles you or for whom you simply do not want to work);
11.  Allows you to save up an emergency fund that will provide peace of mind to you and your family that if an emergency, job loss or illness happens that you have a safety net;
12.  Decide to switch careers if you don't like the one you selected initially since you are not burdened with student loan payments;
13.  Allows you to decline working with clients/customers who are unrealistic, overly demanding and/or unkind because you don't need that income to service your debts;
14.  Allows you to aid family members, friends or strangers financially if you wish;
15.  Allows you to spend more time with family members instead of spending every spare minute at work.

              I am not saying that having money (lack of debt) is the same thing as happiness.  There have been many, many people who had no debt and all kinds of money who weren't happy.  However, I don't think anyone can dispute that if you don't have debt (or at least don't have much debt) that you are able to spend your time, which is one of life's most precious commodities, living your best life instead of suck in a circle of working to make payments.

              As an attorney who assists people in filing bankruptcy petitions, I can see the stress that debt puts on people.  My goal is to not only help them to eliminate their debt through debt settlement or bankruptcy, but also to help show them how to move forward after bankruptcy in a way that will not cause them to end up right back in the same financial place that brought them to my office.  If you had to make a list of what options not having debt would allow you what would you add to my list?  Post it in the comments section.

            If you are stressed about your debt and believe bankruptcy may be an option for you please call Halcomb Singler, LLP, at (317) 575-8222 and I will be happy to set you an appointment to answer your questions, give you suggestions and lay out your options.

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. 

Will My Chapter 13 Payment be Higher than my Debt Consolidation Payment?

         Probably Not.  Unfortunately, a LOT goes in to determining what a debtor's Chapter 13 trustee payment would be each month if he or she filed a Chapter 13 bankruptcy so it is hard to say without doing the math.

         To refresh, a Chapter 13 Bankruptcy is one in which you make a payment each month for 36 to 60 months (typically 60) to a trustee who in turn pays out your creditors according to a repayment plan that you must submit to the bankruptcy court.  So, it makes sense that one question asked by every person I meet with who may need to file a Chapter 13 is, "what will my Chapter 13 payment be if I decide to file Chapter 13?"  This is an excellent question, but it's not one I'll be able to answer at our first meeting.  I previously wrote a blog on how your Chapter 13 repayment is determined in an Indiana Bankruptcy which you can read here.  But the short answer is that there are 8 hour classes lawyers will sometimes attend dedicated to this "simple" question.  There are several calculations and even then it is not a completely black and white answer.  Bankruptcy attorneys must think critically and creatively to set up the most effective and advantageous Chapter 13 plan for his or her client.

         With that being said, I can say that I do not recall any Chapter 13 case I have filed where the debtor's Chapter 13 monthly trustee payment was higher than any payment he or she was making to a credit counseling company prior to filing bankruptcy.  The bottom line is, that it is not a lot of fun to file a Chapter 13.  You aren't going to have bunches of money left over to go on vacations.  You aren't going to be able to go out to dinner a lot.  However, you should be able to pay your mortgage payment, car payment, buy food, buy medicine, pay for children's school expenses, buy gas and maintain you vehicles, and the other things that you need to pay for in order to live.  But the tradeoff is that at the end of the repayment plan that you won't owe any more on your debt (with the exception of student loans, mortgages, other secured debts that take in excess of 60 months to pay, and any other non-dischargeable debts).  In cases where my clients have had tens of thousands of dollars of unsecured debt if not one hundred thousand dollars of unsecured debt it has been a good trade-off for them.

           Your bankruptcy attorney will be able to calculate what he or she expects your Chapter 13 payment will be prior to the time you file bankruptcy.  Therefore, if you think the payment is too high, you don't have to file bankruptcy.  The option is always yours, but I am here to give you the options.  If you would like to set up a free initial bankruptcy consultation to review your situation with me at our Carmel office give me a call at 317-575-8222 x 12.

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. 

Success at Envelope Budgeting

              If you read my blog you know that I am a fan of envelope budgeting.  As a bankruptcy attorney helping those in central Indiana helping individuals with bankruptcy and debt settlement, I see how people spend money.  I also see how easy it is to spend money when you aren't on a budget and not even know you are doing it.  I've said it once and I'll say it again.....Hoosiers often see financial ruin  at the hands of death by a million debit card swipes.

              In my opinion, the best way to budget is the old low-tech standby your grandparents likely used....envelopes.  Now, I am sure that there are probably apps out there for those of you who are super high tech.  If you like that route better, great.  Whatever gets you to sit down and write a budget and to stick to it is good with me.  Nonetheless, I think one of the keys of successful envelope budgeting is accounting for spending categories that you may not use every month.  In an effort to aid those people who read my blog, I am going to do a listing of envelope budgeting categories that you may want to use in your own budgeting:

1.  Spending Money (Half for Husband and Half for Wife);
2.  Food;
3.  Eating Out;
4.  Entertainment;
5.  Clothing;
6.  Home Maintenance;
7.  Dry Cleaning;
8.  Gas;
9.  Vehicle Maintenance;
10.  Medical/Dental;
11.  Gifts;
12.  Haircuts;
13.  Pet Expenses;
14.  Kid's School/Sports Expenses;
15.  Homeowner's Association;
16.  Auto Insurance.

            This is by no means an exhaustive list of envelopes (real or virtual) you may want to use.  However, you will notice that it is a list of variable expenses.  These are the expenses that, to some extent, we can control.  If you have a mortgage payment or a car payment then that is typically set.  I also haven't used utility expenses.  I typically recommend getting on the budget plan and paying your utility bills online each month, but not keeping an envelope.

            The last 2 categories I used, HOAs and auto insurance, may or may not fit into your envelope budgeting.  I included both of these in the list because they are not necessarily due every month, which presents an opportunity to forget about them and not have the money necessary to pay them when they become due.

            Each person or couple must make the decision of whether they would like to be able to "steal" from one budgeting category for another.  I recommend that you not steal between categories except eating out, entertainment and food.  In my opinion, these categories are so closely related that the differences don't really matter.  However, I would recommend against "stealing" from dry cleaning, for example, to pay for a night out.

             Which variable living expenses does your family use in envelope budgeting here that I haven't discussed?  How has envelope budgeting helped your family?  Have you been able to stick to envelope budgeting?  Let me know.  I think no matter whether you are experiencing financial difficulties or not that this can be very helpful, but I am curios as to the experiences that other have had.  And, as always, if you live in central Indiana and are considering bankruptcy feel free to call me at 575-8222 to set up an appointment where we can discuss your options.
 
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. 

Means Test: Not As Bad As You Think

               It is no secret that the reason I blog about Chapter 7 and Chapter 13 bankruptcy in Indiana is because people considering bankruptcy rely on the internet for preliminary information on bankruptcy.  Lets face it.  No one really wants to ask all of their friends if they know what happens during bankruptcy or if they know a local bankruptcy attorney.  It is typically something that people want to keep to themselves.  As a result, it seems like people spend hours combing the internet reading about bankruptcy.

               As a warning, there is certainly a lot written about bankruptcy on the internet that is not true.  But more commonly, a person who is not an attorney may not correctly understand something written on the internet about bankruptcy OR that fact may not apply in each and every case.  Sure.....it is easy to get online and see what the bankruptcy forms look like or even print them out.  It is also super easy to fill out the forms.  BUT ARE YOU FILLING OUT THE FORMS CORRECTLY?  Did you take your proper exemptions?  Do you know if there is anything you did prior to filing bankruptcy that might be a problem for your bankruptcy?  As a comparison, I could easily print off all of the tax forms that I think I need from the IRS and IDR websites.  Heck, I could also fill them out pretty fast.  But I don't.  I have an accountant do my taxes because I am 95% sure that if I completed my own tax forms and sent them off to the IRS that I would be hearing from the IRS at some point down the road to pay up due to my mistakes.

               Nonetheless, I can always tell when someone contacts me for an appointment when they have been doing internet research.  Typically the caller will mention something about the means test during the call and whether they believe they will fall above or below the average household income.  Many potential clients are very worried that they will not be able to qualify for a Chapter 7 bankruptcy simply because they fall above the average.

              But, what I always tell them is that is a preliminary determination that you do not qualify for a Chapter 7.....not a final decision.  The means test presumption of abuse can be rebutted through the means test calculation.  Many of the deductions allowed on the means test are specific to your family and what you actually spend.  Therefore, depending on the types of debts and expenses that your family has, there is a possibility that you can still qualify for a Chapter 7.  Frankly there are a few lesser known deductions such as a deduction for an older vehicle with high mileage that a bankruptcy attorney will know you can deduct, but you probably would not have known about.  In addition, you can deduct what you actually spend on medical expenses in an average month.  These are just a few examples.  I have filed many Chapter 7 bankruptcies that were successfully discharged where the debtors made more than the average household size and overcame that preliminary presumption of abuse.  Sure, it is possible that you will not qualify for a Chapter 7 due to your income.  However, no one should simply assume he or she cannot qualify for a Chapter 7 simply because their household income is above average.  As always, feel free to call Halcomb Singler at (317) 575-8222 if you are contemplating bankruptcy and would like me to review your situation and answer your questions regarding bankruptcy.  There is no fee for a bankruptcy 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. 

Why Second Jobs Are Awesome

           

                    Second jobs are awesome.  Second jobs allow people additional income to buy the things they need or want or allow them to pay down debt.  I added the pizza delivery driver because I just came across a great blog about a man who is paying down debt though delivering pizza on the weekends.  What is inspiring to me is that the author wants to start a life of ministry and knows he cannot accomplish that goal unless he pays off his debts.  The blog shows you how much he makes each time he delivers pizza as well as what his net worth is each month.  Click here to check out his blog.

                     It seems to me that most people....at least the people I meet with who live in Indianapolis and the surrounding areas....don't have second jobs.  Many of the people I meet with have financial difficulties (this is common when you are a bankruptcy attorney).  But very few have second jobs.  I have been thinking lately about why so many Hoosiers forego picking up a second job when they have financial issues.

                   I think the number one reason is likely pride.  In our present economy, there are many professions who simply aren't making enough to make ends meet.  They are not unintelligent people;  they certainly understand that increasing their income would help cover their household expenses.  However, if we are using pizza delivery as an example, they are worried about how they would be perceived by their friends/family/neighbors if they added a second job such as delivering pizza.  I get it. I don't think there is a second job that you could have that would be much more of a "red flag" that you were experiencing financial problems than delivering pizza.  I am sure it would be embarrassing if your next door neighbor ordered pizza and you showed up in your pizza delivery hat at their door.

                  But even though I can certainly see how this would be embarrassing.....I don't understand WHY this is embarrassing.  If you look at the logic of the situation there is really no reason that getting a second job to make ends meet (or even to get ahead) would or should be embarrassing.  But in our society at present I do believe that this is socially unacceptable behavior.  The conclusion I have come to is that you simply cannot worry about what others think.  You must do what you have to do when it comes to your personal finances and if Suzi down the block wants to talk about it then great.  At least you will be able to pay your bills at the end of the month, pay for your kid's soccer uniform or put some money away in the rainy day fund.

                  Another reason I believe many people opt not to find a second job is that they think that the pay will not be worth the time spent.  I have certainly seen examples of people working for a net of almost no money or sometimes even negative money in my practice.  For example, many people who are self-employed so enjoy the freedom of self-employment that they continue to dump their savings into a company month after month, year after year until they are forced to shut it down because there is simply nothing left.  This would be an example of negative money.  In addition, if you have to spend $50.00 on gas to make $60.00 net and spent 8 hours away from your family it is not be worth it.  However, it is certainly possible to find a second job that is worth it.  Sure, most will not make the same amount of money that they make at their full time job....but it is not uncommon for a person to make enough money each month to cover their mortgage or rent payment from a second job.  I'd say that is worth it.

                  The last reason is that people in our fast-paced society really value their down time.  I agree that no one really wants to take his or her Saturday and work all day only to come home exhausted.  We would all much prefer to watch a movie, go for a walk, or just hang out with our families.  But my own personal opinion is that if you are wrestling with money issues that you really cannot enjoy those times without the thought of how you are going to pay for this or that creeping into your head.

                    So by now I think you can gather why I think second jobs are awesome.  But I will say that, unfortunately, there are some financial situations where even second jobs are not going to change a person's circumstances.  I have had clients with over 100k of medical bills or who made $75,000.00 more per year more than they are making now for the past 25 years and have a mortgage based on their prior income.  I have had clients who have suffered the worst runs of financial luck you have ever seen.  Unfortunately, there are some times when a person needs to get a fresh start under the bankruptcy code.  Whether it be through Chapter 7 or Chapter 13 I would be happy to discuss both bankruptcy and non-bankrtupcy options with anyone living in or near Indianapolis, Carmel, Zionsville, Fishers, Noblesville, Tipton, Kokomo or Anderson.  Just give me a call at (317) 575-8222 and we can set up an appointment to meet at the Halcomb Singler, LLP, office in Carmel.


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. 

Income Diversification

              We have all heard about the importance of diversification in our investments.  With the "great" economy that we have all been experiencing of late I have been thinking a lot about diversification of income.  As a bankruptcy attorney at Halcomb Singler, LLP, a large amount of the people who I meet with have experienced some sort of job loss or layoff which is responsible for their financial difficulty.  If you think about it, many people are going to need a an extended period of time to recover financially from even a minor hiccup in their income, not to mention a multi-month layoff.

               I am not financial planner, but I think most people have heard how important it is to have diversity in your investments.  Of course, the point behind this is to make sure that if one of your investments does very poorly that the loss will be offset by another one of your investments that does better.  This makes a lot of sense to me.  In fact, it makes so much sense that I am not sure why Americans and Hoosiers and not all taught of the importance of the diversification of income???

             Now I realize that we are no longer in a society of people who expect to work for one employer for 40 years and to retire with a gold watch.  However, in my experience, most people living in the Indianapolis area only have one job.  That person may or may not plan to stay at their one job long-term....but nonetheless they only have one job.  Having only one job means that if you are laid off from your one job that you have NO income.

             Alright, I understand that many who are reading this are probably thinking I am nuts because there are some up sides to only having one job.  Of course there are benefits.  Benefits such as health, dental and vision insurance if you are lucky.  There is also an argument for many people that in their field of expertise they earn much more money that they would in any other endeavor.  For example, I am an attorney.  An attorney is typically going to earn more than a retail sales clerk at the mall.  Therefore, it would not make sense for me to work 20 hours per week as an attorney and 20 hours per week at Macy's.

             So I must concede that it does not always make senses to have more than one job.  However, it certainly does make sense to have more than one stream of income.  I seriously cannot understand why most people pin all of their income on one source.  Companies go out of business all the time and do not have the funds to pay their employees.  Why not look at finding some alternative streams of income so that all of your income "eggs" are not in one basket.

             To help you understand some examples of how I see that income can be diversified, let me take you through the following list:

1.  Income through rent:  OK.  Not all of us have rental properties, but some do have space that can be rented.  For example, in the Indianapolis are I believe one could easily get $400.00 per month to rent out a room in a house.

2.  Income through a side business:  Lets say that you are a receptionist at an accounting firm during the day.  Why not think about how you can make money on the side when you are not at your "job"?  This could be something that you enjoy much more than answering phones such as child care, photography, driving a limo or selling makeup or jewelry at in-home parties.  Sure, you are probably not going to make as much money as at your full-time job, but if you get laid-off from your regular job you will have some income.  Last time I checked no income is better than some income.

3.  Income through taking advantage benefits.  For example, if you are a veteran you may be eligible to receive a stipend while attending school.  Why not go to school at night in an attempt to earn more at your full-time job while also receiving a stipend each month which adds to your income.

4.  Speaking of veterans, why not think about joining the National Guard, Air Guard, or Army Reserves?  Once the initial training period is over those serving in the National Guard and Air Guard, for example, are responsible for attending training one weekend per month and two weeks per year.  AND they are paid for the time they spend training each month.  Of course, there is also the chance that you will be deployed to serve overseas if you join the Guard, so this really should be done because you feel a calling to serve and not simply for financial gain.  However, for the purposes of my article it is an excellent way to diversity your household's income!

5.  Through Blogging.  You can create a stream of income by virtue of your blog.  Specifically, through allowing others to post advertising on your blog.  Some bloggers make a great deal of money through blogging and see returns of hundreds or even thousands of dollars per month and every little bit of income helps to make you that much more financially secure in the event you lose a major income stream.

          I would love to hear ways that you have been able to diversity your incomes!  Please post your comments below!

Buy A Car Prior to Filing Bankruptcy?

               If I told most people that it sometimes makes sense for a person who is going to file bankruptcy to buy a car first they would look at me as if I had two heads.  But, in some situations it can make sense for a soon-to-be debtor to take out a loan for a car just before filing Chapter 7 or Chapter 13 bankruptcy.

              First of all, it is important to keep in mind that the entire point of bankruptcy is for a debtor to receive a fresh start so that they are able to restart their financial life.  At Halcomb Singler we take this seriously and attempt to advise people in a way that will help them stay out of debt and on a great financial track for the rest of their lives.  I try to point out potential future financial pitfalls such as a single mother who has no life insurance, a client who has 4 different 401(k)s with old employers and has no idea how the funds are doing or when a client is paying WAY too much for car insurance.  When I see these problems I try to point my clients toward another professional who is qualified to help them.

           Something else that I typically think about when assessing the overall financial health of a client prior to a bankruptcy filing is that if he or she works then he or she will need a car that is able to provide them transportation to and from work in order to be successful financially after bankruptcy.  Many of the potential clients that I meet with at my Carmel law firm have been doing everything they can think of to avoid bankruptcy, so it is not uncommon for that person to own a very old vehicle with very high miles that they spend a fortune repairing.  If that person files bankruptcy the last thing I want to happen is for them to have a very high repair bill just after they file bankruptcy because then they are already back in a financial hole just after filing.  Many of the people I meet with could afford a reasonable car payment of approximately $300-$350.00 over 48 months if they weren't spending every extra dime on credit card bills, personal loans or old medical bills.

            Many people think that buying a car and taking out a loan on it just prior to filing bankruptcy would be considered fraud and that the bankruptcy trustee would be very mad!  Certainly, one should not go out and use their credit cards after deciding to file a bankruptcy.  Nor should one who is going to file bankruptcy buy a vehicle that they cannot afford after review of their post-bankruptcy budget (remember if you are financing for more than 48 months you can't afford it).  However, for those who truly need a more reliable vehicle to get to work and fear that without a newer vehicle that they will be drowning in repair bills it is not unreasonable to purchase an affordable vehicle.  In addition, this should only be done if it is the debtor's intent to reaffirm on the vehicle (to keep it and to continue making payments on it during and after bankruptcy).

            In addition to helping a debtor with his or her fresh start because the debtor will have reliable transportation, another benefit of obtaining a loan to buy a vehicle is that it will be an additional deduction on the bankruptcy means test.  This means that the debtor will have a better chance of qualifying for a Chapter 7 bankruptcy and if he or she is in a Chapter 13 bankruptcy it is likely the monthly trustee payment will be lower if a vehicle is financed.  While this is certainly not the only reason I would ever advise a client to buy and finance a vehicle, it is a factor to consider.

             If you live in central Indiana/Indianapolis area and would like to discuss whether or not bankruptcy could give you a fresh financial start click here to get started or just give me a call at (317) 575-8222 x 12....yes, I do tend to answer the phone myself....don't be surprised!

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.