In defence of lawyers- maybe they should not go to the bottom of the ocean just yet.

LawyerI am getting regular comments on my blogs attacking me and attacking lawyers in general so I thought I would write a blog that defends lawyers.  I have been a lawyer for over 12 years now.  I Lincoln-lawyershave done many things before the law so it is not the only profession I know.  I am now doing bankruptcy law but I have practiced in the areas of Immigration and Landlord/Tenant also.

It is well-known that many people do not like lawyers.  They are considered dishonest, greedy, self-serving “blood suckers” by many.  In fact one of my kids favorite movies is Jurassic Park where the lawyer is openly called a “blood sucker” to his face and he is the first to be eaten by the T-Rex as he hides on the toilet.

Shakespeare has a line in a play about them all being killed and lawyers are the butt of many jokes like one that puts them at the bottom of the ocean (like drowned rats) as a good start.  On talk radio they are skewered often and many talk show hosts seem to consider them the root of all evil.  They seem to be blamed for many evils in society.

For those of you that have been around long enough it reminds me of what police were thought of in the 1960s.  Many hippies and radicals wrongly thought of the police as the cause of all ills in society at that time.  The implication then was that if we just got rid of them then society and everyone would be better off.

But I remember what I read in a “Mad” magazine once when I was a youngster in the 1960s.  A hippy was protesting the cops and holding up signs calling them “pigs” in full view of the police officers.  Then a mugger came along and robbed the hippy of his wallet.  He immediately called out “help, help police” and the cops did not help him and responded with “no one here but us pigs”.

And the same is true of lawyers.  The same people who say they hate lawyers will call one very quickly if they are sued, or served a divorce, set upon by the IRS, or especially if they are arrested.  The lawyers will dutifully come to their aid and help them.  What if they didn’t?

And you may say” but lawyers are paid so well for their work”.  Not always.  Many in private practice are losing money because running a law office is expensive and clients are hard to come by and they often don’t pay their lawyers.  You would be surprised at how often and how much lawyers talk among themselves about their struggles in getting paid by clients and their resulting financial difficulties.

Also it is true as you may have suspected that there are too many lawyers out there for the available clients.   And remember that things are far worse and lawyers are getting even fewer clients now with the recession.

Lawyers are well aware of their reputation.  I work in a building with a hundred lawyers and we talk about this stuff.  We know we are hated and under-appreciated.  I once got a quote from a lawyer that was very interesting:  “Your lawyer in practice spends a considerable part of his life in doing distasteful things for disagreeable people who must be satisfied against an impossible time limit in which are hourly interruptions from other disagreeable people who want to derail the train; and for his blood, sweat, and tears, he receives in the end a few unkind words to the effect that it might have been done better, and a protest at the size of the fee.”

This partially reflects the lawyers perspective.  He or she is doing these difficult tasks for difficult people under pressure and they are rarely happy with it.  And this is he can even get a client in this recessionary environment.  It is no wonder that lawyers suffer from problems with drugs, alcohol, depression, and suicide.   Very often lawyers become disillusioned with law and leave it altogether because doing it everyday is not what you might think.

Most lawyers I know now in private practice are certainly hurting now.  Business is down, clients are scarce and money is tight.  Clients just don’t have money to spend.  These lawyers are not getting rich or blood sucking but just trying to survive like everyone else.  They have kids in school and house bills to pay too.

And remember that many are providing a valuable service.  They provide this service to many people and get very little in return.  They are often doing things like helping people in very bad marriages break up peacefully, or getting people out of deep debt, or keeping people out of jail, or fighting off a lawsuit that could potentially ruin them.  In addition they are defending those against the government which has unlimited resources to come after anyone of us.  And who is going to defend you when that happens?  Only a lawyer can.

So don’t put lawyers at the bottom of the ocean yet.  In Shakespeare’s Henry VI play the character who says “kill all the lawyers” is trying to stage a revolution, take over the country, and establish himself as king.  He knows who will stop him.  Those that know the law, the Constitution, and how to get things done in court and throughout the legal system.  The lawyers would stop him from taking over so character asking to kill the lawyers is the villain in the story and the lawyers are the heroes.  This quote is usually used in the opposite way in which Shakespeare intended it.

So the next time you are being “mugged” (i.e. sued) in court by a private party or by the government remember who is going to help you.  The lawyers and only the lawyers will and only the lawyers can.  They are the heroes of our story here.  When you call out for a lawyer to defend you be nice to them.  You don’t want the lawyers to respond with “nobody here but us drowned rats”.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Lawyer clipart courtesy of OCAL.  Lincoln quote courtesy of mrsdkrebs.

Housing prices are on the rise. File bankruptcy before you get too much equity in your home.

Housing prices are on the rise nationally.  Some markets and some states still have depressed prices but they are on the rise in most areas.  Here in San Diego housing prices are rising rapidly especially in certain neighborhoods.  In San Diego some of that increase is due the economy getting better but that is not the only factor that is causing housing prices to rise here.

It is also a supply and demand problem.  There is a shortage in this city of supply of homes on the market.  I have been told by realtors that the shortage exists because homeowners are expecting housing prices to rise further so they are holding homes off the market.

It does not matter what the reason is for the housing price rise.  It is important that prices are indeed rising.  Soon many more people will gain equity in their homes which is normally a good thing.  But if you have credit card or other debts and you cannot pay them then you might be considering bankruptcy.

If it is true that you are looking to file a bankruptcy eventually then it might be the time now to move forward with it.  If your home continues to rise in price you will eventually have equity in your home again.  But this equity in your home could create problems for your bankruptcy filing.

If the equity rises past your ability to protect it with the allowable bankruptcy exemptions then your home may be in jeopardy if you file bankruptcy.  This is because the trustee could take it and sell it for the equity in it.  If you move quickly before this happens then you can usually protect your equity.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Do you have some special possession you want to keep in bankruptcy? Because you probably can.

corvetteIs there some special heirloom you have or a piece of furniture you like or do you have an old car that you just can’t lose?  Maybe you own an old jewelryclassic ’57 Chevy or Corvette that you want to fix up someday.  You may have a great number of debts which you realize you can’t afford to pay but you are worried about the safety of your favorite possessions if you do file for bankruptcy.

The good news is that you probably can keep these possessions as long as the property’s value is less than the exemptions allowed in bankruptcy.  In bankruptcy law there are very liberal exemptions and these exemptions are what allow you to keep property after the bankruptcy is over.

One very helpful exemption is something called the “wildcard” exemption that you can use to protect any kind of property that you own.  At the time of this writing the wildcard exemption is $26,425.00 and that is pretty generous.

There are other exemptions besides the wildcard.  There is one for your car, and one for your furniture, clothes, and household items.  There are separate exemptions for cars, jewelry, and tools of the trade and don’t worry about you retirement account because that is almost certainly exempt.  Your attorney can advise you about all of the applicable exemptions in your state.

Your property will fit within the wildcard exemption as long as your property is worth less than $26,425.00.  If it does then you can keep it.  To value the property you want to go to a website like Kelly Blue Book for cars or you can go to Ebay or even Craig’s list to see what items similar to yours are selling for.

To get a more accurate valuation of the property you can hire an estimator or property appraiser who, if you pay him, will give you his or her valuation of the property.  If the property is of a special nature like a record collection then a property estimator who owns a record store could do the valuation.  The same thing applies for jewelry or a stamp collection, or an old gun from the civil war (jewelry even has its own separate exemption).  There is usually someone out there who can accurately value your property whatever the type.

valueRemember the bankruptcy trustee can only take your property if it has a value beyond your exemptions.  This is why it is so important to establish the fair market value of the item(s).  So if you (and your bankruptcy attorney) show the trustee that the fair market value is less than the exemption amount that you claim then you will usually be okay.

It is possible that the trustee can get his own valuation which could be higher than yours but if you get a reliable appraiser for the property you can usually defend your appraisal.  It is always good to consult with a bankruptcy attorney if you have any questions about whether you can keep your property in bankruptcy and if you should or should not file bankruptcy.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

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Corvette by Zombieite.  Jewelry photo courtesy of Gnilenkov Aleksey.

Beware the low cost, cut rate, bottom of the barrel bankruptcy attorney

suit guyBeware the low-cost bankruptcy attorney!  A cut-rate attorney will often bait and switch you or he will piece out or up charge you for certain services he performs that other attorneys include in their price.  This means that they will get you in at a very low price and then raise the price later.  Before you know it you are paying more for this attorney than for the one that had the all-inclusive price.

Many of these attorneys will also cheap bankruptcy 2often not be available to you as they pass you off to their underlings.  Some of them may or may not show up at your 341 hearing and if they do you may not even know the person as your attorney because you have not ever met them.

This means someone else has handled your bankruptcy petition, schedules, and all of your questions about the case prior to the hearing.  If you call your low-cost attorney you will often not get a call back and if you do it will be from a paralegal or secretary or some other non-attorney office employee.  It is hard to know who is making the decisions in these cases but I ask how can they be good ones?

I often see these attorneys at hearings where they call out the name of the client because the client has never seen this attorney before.  Do you really want to meet your attorney for the first time at a 341 hearing in front of the bankruptcy trustee where everything you say is on the record?

I and many others believe that this is not good legal representation.  You should be able to meet your attorney and speak to him or her numerous times before you even file you bankruptcy.  By the time you get to the hearing you and your attorney should be well acquainted with each other and with your case.  Meeting your attorney for the first time at the 341 hearing is a very bad idea I believe.

But this and other things can and do happen with low-cost attorneys.  You can see from the “Bankruptcy $199″ sign above that there is no end to how low they will advertise their services just to get you in the door.  When you sign up though you find out the real cost.  I heard rumors of an attorney that allegedly charged $500 for a bankruptcy filing.   For that price he had you fill out forms online and he filed the case for you without even meeting with you.  I don’t know if he even showed up at the hearing.

You do have rights as a Debtor though and in our district you should get a “rights and responsibilities” document supplied by your attorney which is filed with the case.  This will tell you what you are entitled to expect from your attorney when he or she represents you in a bankruptcy.  It covers such things as the attorney’s duty to advise you about all aspects of the case and his duty go to your 341 hearing.  It also covers the attorney’s duty to meet with the client and explain such things as the various bankruptcy chapters and the attorney’s duty to return phone calls and meet with the client to handle their issues as they arise.

All attorneys are required to do these things at least in our district.  But I suspect that the low-cost attorneys cut corners and may not do many of these things.  It costs a certain amount to run a law office and a cut-rate attorney must pay these bills just like a regular attorney.  He or she must therefore provide less time and service to clients or take on a lot more clients than they can reasonably handle (or both).

There is just no way around it so be wary of these bargain basement attorneys because as a client you could suffer greatly with a cut-rate attorney especially if an unforeseen problem arises in a case.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

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Guy in suit courtesy of OCAL.  $199 photo courtesy of Wallula Junction.

I just got sued for a debt. What should I do?

lawsuit 2If a creditor files a lawsuit against you for a debt you do owe them then you can fight the case and try to win in court.  Chances are though that the creditor can prove that you owe them so you will have a tough time winning.  It is possible that the creditor cannot prove that you owe the debt but these creditors are usually not stupid.  (I wrote about this before in a previous blog here).

They will most likely produce in court some sort of proof that you indeed owe this particular debt.  They will have copies of your original contract you signed for a credit card for instance and some sort of monthly tabulation for the charges.  If that is the case then it is hard to argue that you do not owe the debts.

You can try to stall the case for a certain amount of time and ask for a trial date which will stall it further.  The creditor though will then often file a motion for summary judgment based upon their evidence.  They will use this motion try to get a quick judgment so they can begin collecting the debt from you.

If you have evidence that warrants a trial then you can get one possibly but if they have sufficient proof of your owing them then you are likely to lose at trial.  If you win then you are off the hook but if you lose then the creditor will begin to collect the debt from you.

At some point before the trial you will want to consider making payments to them or take the other way out which is bankruptcy.  Bankruptcy will stop this lawsuit and wipe out not only this debt but bankruptcy sign 2also all of your other debts.  Bankruptcy is an excellent lawsuit destroyer.  Bankruptcy will usually cost less than hiring an attorney to fight the suit and if you fight it yourself and lose then you will still probably owe the creditor for the debt and their attorney fees and costs.

I recommend consulting a bankruptcy attorney before you start the process to see if you qualify for bankruptcy and to see if bankruptcy makes sense for you.  It is possible that you have too much income or too many assets to file or you may have too few debts to justify a bankruptcy.

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I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Lawsuit photo courtesy of thinboyfatter.  Bankruptcy sign courtesy of wes gaddy.

Do I have to give up everything I own to file bankruptcy? No!

property 2I am asked this question probably once a week.  Many people believe that they must lose everything they own to file for a bankruptcy.  This is not true.  I believe that this comes from some of the guilt and shame that people feel when they file.  They believe that they are doing something almost dishonest.  They believe that they must “honor” their debts.  The collection agencies that attempt to collect on these debts will encourage these feelings of guilt to dissuade people from filing for bankruptcy and to get people to pay them.

Many of my clients also believe that they have somehow failed when they file for bankruptcy and failure is just not accepted in this country.  They then try for years to pay debts that they cannot afford thinking that they will then not be failures.  I usually remind them that many successful companies have filed for bankruptcy over the years and individuals have the same right to do so.  In fact the filing of bankruptcy can get rid of debt and put an individual on the road to success.

The reality is that bankruptcy is a legal and moral solution to your debt problems and you can keep most of your property in the bankruptcy.  This is because there are very generous bankruptcy exemptions.  These exemptions allow you to keep a lot of stuff.  Your retirement funds can be kept with one exemption, your car with another, a certain amount of jewelry with another, and even “tools of the trade” if you own a business or use those tools in your line of work.

In addition there are homestead exemptions for equity in your house and the contents in your house, like our personal belongings and your clothes, can usually all be exempted.  Anything that exceeds these exemptions can be put into the $23,000 “wildcard” exemption which can be used for cash, stock, bonds, or anything else.

Insurance and social security money and your current income are also exempt so call a bankruptcy attorney if you need a bankruptcy and get a consultation about your property.  Most likely you can keep it.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Photo courtesy of Alan Cleaver

Bankruptcy filings are down but they will rise after October 2013 when people realize that they can file again

bankruptcy 5Bankruptcy filings are down significantly across America.  I wrote about this in a previous blog.  Some areas have seen a drop-off of as much as 50% in the numbers of filings.  There Courthouse 2are many reasons for this.  One reason is that most homes that were in foreclosure after the recession began have now been dealt with one way or another.  Household debt is also down and household debt has always been an indicator of how many bankruptcies will be filed.

Some economists believe that there will be another wave of foreclosures that the banks have been holding off foreclosing until there are signs of an economic recovery.  But there is another factor out there that will hit this October.  In October 2005 millions of Americans filed for bankruptcy in order to get their filing done prior to the 2005 bankruptcy law change.

Bankruptcy underwent a major change in 2005 designed to make it harder for debtors to file a chapter 7.  As it turned out most people could still file even with the new “means test” that was added in the new law.  But the 2005 bankruptcy law change scared people into thinking that bankruptcy was not going to be an option so they had better file now.

So millions did and many of them probably should not have.  But after 2005 the country went through a major recession.  Jobs were lost, foreclosures were up, and debts could not be paid.  But one aspect of the new law was to increase the time between bankruptcy filings from seven years to eight years.

We are now about to reach the eight year mark in October 2013.  This means that if you filed bankruptcy before the law change in 2005 (and maybe didn’t need to) you can file again in October of this year (2013).  It is now okay for you to file again so if you need to contact an attorney about filing a second time.  Don’t worry about having to do it it’s okay.  No one could foresee the terrible recession of 2008 and it probably has left you will a lot of debt that you have not been able to pay.  Bankruptcy will again take care of this debt once and for all giving you a fresh start.

I am a San Diego bankruptcy attorney.  For further questions please visit my website at www.farquharlaw.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Bankruptcy photo courtesy of Stockmonkeys.com.  Courthouse photo courtesy of Robert Linder.

Forgive yourself for your debt. Debt forgiveness is in the bible and bankruptcy is the answer.

forgive yourself 3I have written in the past (here) about how bankruptcy is sanctioned by the bible.  In the old testament in the book of Deuteronomy (15:1) it states thatbible 2 debts must be cancelled every seven years.   The Jewish people considered it very important to forgive debt completely after seven years.  They realized thousands of years ago that it was good for people and good for society if people had no long-term debt.  If they could not pay the debt I seven years then it was better for all to have it forgiven and lifted off the shoulders of the people.

The Christians said the same thing in the New Testament.  The Christians believed in forgiveness.  Jesus himself emphasized its importance.  I believe this includes forgiving yourself for the debt you have incurred but you cannot pay.  You blame yourself and you hang onto the debt you incurred a long time ago thinking that you will be able to pay it one day.  But this goes on and on.

It’s time to forgive yourself for charging up the credit cards, or returning an automobile you could not afford, and especially for medical debt which you cannot pay.  You may have thought you would have the money to pay it later but the money never came.  And now the debt is still there and the collectors are calling every day for you to repay it.  Some of them may even have sued you for it.

But the repayment doesn’t happen and it probably won’t happen.  So it’s time to forgive yourself for getting into debt in the first place.  Forgive yourself like you forgive others.  It’s in the bible.  In the New Testament.  You have all heard the saying; “to err is human but to forgive divine”.

freedom 4 Once you forgive yourself for the debt then maybe you can take the next step to rid yourself of it which is to file for bankruptcy to cancel your debts.  A bankruptcy discharge will lift your debt burden and let you get a fresh start and give you the freedom from your debt burden.  This freedom will allow you to live like you should and not be burdened by debt.  People have known for thousands of years how important this is.  Debt forgiveness was good enough for the ancient Jewish people of the bible and it’s part of Christianity too.  Bankruptcy is your legal, moral, and ethical pathway to debt forgiveness talked about in Deuteronomy.

I am a San Diego bankruptcy attorney.  For further questions please visit my website at www.farquharlaw.com .  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

“Accidents” photo courtesy of merfam.  Holy bible photo courtesy of Steve Snodgrass. Freedom photo courtesy of Josef Grunig

Is there currently a mancession? How about a shecovery? How can this be a good thing?

workmen 2There has been a lot of talk since the recession started as to whether the economic downturn has hit men harder than women thus creating womana “mancession”.  Even Wikipedia states that unemployment for men has been 10% while unemployment for women was only 8%.  There are even articles about a “shecovery” which occurs when areas of the economy that are dominated by women recover and male dominated areas don’t.

The recession hit areas harder that employed men in greater numbers than women.  Construction and manufacturing were all hurt badly in the recession and more men than women were employed in these areas.  Men were therefore impacted more greatly in the economic downturn.

As one online article in Nation magazine points out women make up already half of the workforce in America today which is up from 30% in the 1940s.  Women also have more jobs than men in areas like retail sales and healthcare and they have half of the middle management jobs according to the article.  I would also add to this list areas like education and the media where women outnumber men.  And these areas tend to either be growing or not shrinking as fast as male dominated areas of the economy.

We already know that women outnumber men in colleges these days by almost 60% to 40%.  They have also caught up in graduate schools as now women are graduating in numbers for the most part equal to men in medical and law schools.  These schools are pushing these grads out into the job market every year.  So women are also getting the degrees which will help them land the good paying jobs in the future.

Many of these articles are written by women and they describe this situation as women “winning” some kind of job struggle.  Some even say that women are just more suited to the modern economy.  A new book is even entitled “The end of Men”.  Does anyone see a problem with this besides me?  Men being cast off as outmoded, outdated, no longer useful to society.  Is anyone concerned with where they will go and what they will do?  It is indeed disturbing.

We have always been concerned in the past about some group that is disadvantaged, falling, behind, or left out.  We have always seen the danger and unfairness in this and we have always in the past made some attempt to address it for the good of everyone.  Now with half of society being looked upon as at least falling behind (and at worst defunct) we do nothing.

Do we believe that men somehow deserve a mancession?  Is is payback for some past crimes?  I say what about the future?  There is a whole new generation of men that must find their way.  I have seen the men in my office that have lost their jobs years ago and still can’t find something even close to what they used to do if they can find something at all.  They then must face foreclosure, eviction and all the serious financial problems of having little or no income.

As a bankruptcy attorney I want to say to the men that if they are still unemployed or underemployed and they have debts they cannot pay then they should look at bankruptcy as an option to get out of the debt.  They can then begin to rebuild their lives with out the debt burden often incurred prior to this recession when things were better.

But we are all in this thing together and if men are falling behind and if their is indeed less and less need for them in the future it is a problem for everyone.  The Nation article asks if women are “really victors” in the new economy.   I am reminded here of a line from the movie “The War of the Roses” where Danny DeVito’s character tells Michael Douglas’ character that “there is no winning only degrees of losing”.  We are all in the same boat in society and when men lose we all lose.

I am a San Diego bankruptcy attorney.  For further questions please visit my website at www.farquharlaw.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Men photo courtesy of Roger Blackwell.  “I won” photo courtesy of Search Engine People Blog.

Be aware of the bankruptcy warning signs in your own life!

warningThere are many warning signs that can appear in person’s financial life that can signal that a person is insolvent and in need of warning 4declaring bankruptcy.  If you can recognize these signs then it is possible for you to prepare to file for bankruptcy.  A timely bankruptcy filing can avoid the pitfalls of irreversible financial mistakes.  I often discover that my clients have made these mistakes prior to coming to see me.

I wanted to warn people in this blog so they could consider bankruptcy when the financial danger first appears so they can avoid the mistakes that come with the failure to recognize the warning signs of an impending bankruptcy.  If these signs appear you may be in a situation where bankruptcy makes more sense than continuing with a charade or outright lie that you are “someday” going to pay your debts.

Many people continue with this denial for years and years and some make many financial mistakes because of it.  Some will cash in their retirement funds or sell other property to raise cash in an attempt to pay down their debts.   Retirement funds and many other types of property are exempt in bankruptcy.  It is always a mistake to cash in retirement funds or many other types of property that are exempt in a bankruptcy.   You can keep these assets in a bankruptcy and still get rid of your debts.

Some people will struggle along for long periods paying partial payments to creditors which will often cover only interest on their debts.   This only results in them their spending endless amounts of money which could have been saved had they only admitted to themselves that bankruptcy made sense.  Some will even borrow some money from friends and relatives in an attempt to pay down the debt.  This money is completely wasted and probably lost forever if these people eventually do file a bankruptcy.

1) The first warning sign is when you are paying interest only on credit card or other debts.  If you cannot pay down the debt itself but you are paying interest only then that is a sign of trouble ahead.  Interest rates will rise and just like our government you will eventually reach a point where your interest on your debts takes up a huge share of your income so that you cannot cover your basic monthly expenses for living.   This is an unsustainable situation and one which signals that bankruptcy make s a lot of sense for you.

2) Unemployment or underemployment.  If you have debts that you could afford to pay on when you high paying job but then you lose that job (or you get a job which pays far less) then you may be headed for bankruptcy.  Some will believe that they can magically still pay these debts even though they now need their now reduced income to continue to pay their monthly expenses.

3) When your expenses exceed your income each month before you pay your debts.  If you have no money left over after you pay your current monthly bills to pay past debt payments then it is probably time to consider bankruptcy.

4)  If you have had a vehicle repossessed and you have been hit with a large deficiency balance because of it then you may need a bankruptcy.  Some of my clients have multiple cars repossessed and they thus have multiple deficiency balances that can add up to tens of thousands of dollars.  If they cannot afford to keep up with payments on the vehicles prior to repossession then they will probably not have enough income to pay off the deficiency balance on the old car and somehow secure a new car to drive.

5) Another sign is if you suffered some outrageously high medical debt that is unpayable.  Many of my clients are uninsured or underinsured.  This works for some unless there is a need for an expensive medical procedure.  It is not long before the collectors are calling you to pay tens or even hundreds of thousands of dollars in medical bills.  They will demand that you repay just like any collector and you may not have the income to do it.

6) Then there is the constant steady unabated calls from creditors that you cannot pay so you do not answer your phone.  And this leads me to the all important  psychological  effects of long-term debt upon people.  The constant harassing calls and the knowledge that there is a debt out there that you have no way of paying is a tremendous psychological burden to people.  Bankruptcy lifts this burden, eliminates the debt and the terrible unending stress that goes with it.

7) Some people have multiple court judgments against them for unpaid bills.  These judgments could be for credit cards, deficiency judgments, unpaid medical bills, or debts of any kind for which a creditor has sued you and obtained a court judgment against you.  That creditor can now garnish your wages, seize your property, or demand you come into court for a debtor’s exam.  These “exams” will allow creditors to pry into your finances no matter how much you wish to keep them private.  These are to be avoided at all costs.

8) You may already have garnishments taking 25% of your income.  You now are operating with a reduced income and each creditor is standing in line to get his 25%.  You could pay this virtually forever if you owe enough money to creditors.  Bankruptcy will stop the garnishments, return your income level to what it should be, and banish the debts forever.

All of these are signs that bankruptcy probably would make sense for you and you should get some advice from a bankruptcy attorney.  If you have several of these warning signs (and even if you have only one) then bankruptcy is an option to consider.  There is a little bit of a miracle in bankruptcy.  It can wipe out your debts and free you from your debt burdens.  It is the only way I know of but we don’t need another because it works so well.  So think about if you have any of these signs and if you do then consider bankruptcy.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

Warning sign courtesy of Free Grunge Textures.  Danger sign courtesy of Atomicjeep.

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