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.