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.
Friday, September 28, 2012
Monday, September 24, 2012
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.
Thursday, September 20, 2012
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!
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!
Thursday, September 6, 2012
Buy A Car Prior to Filing 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.
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