The economy might be improving. It therefore might be a good time to file bankruptcy.

The economy appears as if it might be improving.  If this is true the in a better economy it is more likely that you will obtain a better paying job.  Therefore it might e a good time to file for bankruptcy before you get this job and you become “means tested”out of a chapter 7 bankruptcy.

Believe it or not many people wait too long to file and then they cannot file because they earn too much income or they receive too much property.  If you might get a job with a moderate to high income in the near future they it would be advisable to file for bankruptcy now when you have an underpaid job or if you are altogether unemployed.  You should only file of course if you have large debts you cannot currently pay.   (See here for my website article on why you should file for bankruptcy).

There is a  problem with waiting to file for bankruptcy though.  When you get a good job you may get enough income to survive and pay your bills.  his is a good thing but your income may be too much for you to easily file for bankruptcy.  There is a thing called the means test which will force you to pay back your debts in a chapter 13 if you make too much money.  The artificiality of the means test may create a situation where on paper you have enough money to pay back our debts but in reality you do not.

The means test may show extra income in your household when you look in your account and see none.  That is when you will wish you had filed for bankruptcy and rid yourself of your debts when you could have with no problem.  Don’t let those debts follow you into your new life.  Those old credit card debts are usually attributable to your borrowing money to survive when things were very bad.  They usually do not reflect a wasteful or luxurious lifestyle but mere borrowing to survive.

Also remember that if you are going to receive some property by will, trust, winnings, or gift then that too may make it harder to file for bankruptcy.  This is also true if your home or other asset will increase in value.  Better to file now before these things happen.

Why then let these old debts impact your future life after you come out of the bad times.  You will need the money you will earn from you job to pay for your family’s expenses.  Don’t wait until you get too much income or assets that will push you out of bankruptcy.  Excercise your federal right to file for bankruptcy and rid yourself of these old debts.  Get a fresh start but do it now while you can and your income is low and your assests are few.  You do not know what the future holds.

I am a San Diego bankruptcy attorney.  For more information please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Will my landlord be notified of my bankruptcy and can he evict me if I file?

(See my blog with an update to landlord notification and bankruptcy here: http://bit.ly/IAaaQc .)

No!  Your landlord will probably not even know that you filed and if he did you are protected by law.  A landlord cannot legally evict a tenant for filing bankruptcy.  If you file bankruptcy and then try to move in a landlord can keep you out only if he has a policy that every prospective tenant has to follow where he will not rent to bankruptcy filers.  But if you are already in your rental unit and you then file bankruptcy then you are protected by law and the landlord cannot evict you for filing.

Probably though he will never even find out that you filed for bankruptcy.  It is only if you have a unexpired lease for any amount of time that he would be notified of your filing.  If you are month to month then your landlord won’t be notified.  But if the landlord somehow finds out about your bankruptcy or he is notified directly because of an ongoing lease he still cannot evict you.   If your landlord tries to evict you after a bankruptcy and because of the bankruptcy then you can fight the eviction in California.  I believe other states have similar defenses to unlawful evictions.

Remember that you have a federal legal right to file for bankruptcy.  No landlord can challenge that or take it away or discriminate against you for exercising your legal federal right to get a fresh start with our debts!  If the landlord is smart he will see that you can now pay rent more easily as you will have discharged your credit card, medical, deficiency balance, and other debts in the bankruptcy which will free up more income to pay for rent and your other necessities.  You may get a landlord that does not care or even is happy that you filed.

But either way don’t be intimidated by a landlord who threatens an eviction.  You can fight the eviction and win if the reason he is evicting you is because you filed for bankruptcy.

I am a San Diego bankruptcy attorney.  For more information please visit my website at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!  If you are considering bankruptcy then get my Free e-book; “13 Things You Should D to Prepare For Filing Bankruptcy” by e-mailing me at farquharesq@yahoo.com.

I receive payments from a trust. Can I keep those after a bankruptcy?

Beware of this issue as this might prevent you from filing.  If you have a trust and you receive regular disbursements from this trust then those disbursements are generally not treated as exempt beyond the allowable exemption amount.  It would make sense that they would be treated like income but they are not.  You have no problem receiving income in a bankruptcy as long as it does not exceed the means test limits.  Trust payments are treated differently though and the bankruptcy trustee can and will take them.

You can keep them as long as they don’t exceed wildcard exemption.   In California the “wildcard” exemption is around $23,000 so you would keep every trust payment up until that limit was reached.  Once the limit was reached the trustee could ask that all trust disbursements be paid to the bankruptcy estate until the debts are all paid.  You would then lose them.

This is an unacceptable situation for most people and one that will cause you extreme distress.  If you receive trust payments then you want to consider carefully whether to file bankruptcy or not.

There is one situation which can save you.  If your trust has a “spendthrift clause” then it may save your disbursements.  These clauses that are put in trusts when they are created prevent trusts from being attached or taken by any creditor.  These clauses also work to prevent the bankruptcy trustee from taking your trust fund payments.  If you have a spendthrift clause in your trust check with your trust attorney and give a copy of your trust to the bankruptcy attorney so he can see it himself and decide whether there your spendthrift clause looks good.

It is very important not to file without this careful consideration of these trusts.  I have seen cases where the trust payments were seized and a settlement of all of the debts had to be paid to the trustee before payments could resume.  Of course you should probably not file for bankruptcy if your trust payments can be seized to pay your debts.  A debt settlement option should then be considered.

I am a bankruptcy lawyer practicing bankruptcy law in San Diego, CA.  For more info. visit my website at www.farquharlaw.com.

What can I do if I can’t file bankruptcy for some reason? That’s easy, we settle!

(See my update on whether to use a debt settlement company or a bankruptcy attorney).

Yes, we can settle your debts!  Usually at a steep discount over what is owed.  You may have already received letters from creditors offering these discounts if you have held this debt for some time.  If a bankruptcy attorney calls the creditor and explains that you may file bankruptcy then you might even get a better settlement offer.

If you can’t file bankruptcy that means usually that you have too much income or too much property to file.  If your debts are fairly low then you may want to use that property or income to settle them.  Some of my clients have gotten or are getting a large payout on a lawsuit or an inheritance of some kind and they then would have too much money to file.  We then call the creditors and offer settlements and they are happy to get their money usually at a deep discount.

This may not seem like an option for you but you would be surprised how often this happens.  If you have some money or if you are due for a big payout in the future then it does not make sense to file for bankruptcy.  If the trustee finds out then he can keep the case open until those funds come in.  He will then use those funds to pay the debts in full if each creditor files a proof of claim and they usually do.  Since you are bound by law to report to the trustee anything that could be considered property to the estate it just does not make sense to file bankruptcy in some circumstances.

Some people just don’t want to file for bankruptcy.  If this is the case then you can also settle your debts.  The creditors will be happy to get paid.  Settling is not as bad as you might think.  A bankruptcy attorney has more clout and the threat of filing bankruptcy to use as leverage to get you a better deal.  A bankruptcy attorney should offer this as a service for those who cannot file for bankruptcy.  After settling these debts will be reported as “settled” on your credit report and in time your credit score will rise as these debts will no longer be reported as delinquent.

I am a bankruptcy attorney practicing bankruptcy law in San Diego CA.  Please visit my websites if you have more questions at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for a free credit report and analysis!

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Is filing for bankruptcy the “responsible” thing to do?

(See my blog about bankruptcy and the bible).

I would argue that yes it usually is not just smart to file for bankruptcy if your debts have gone beyond your ability to pay but that it is also the responsible thing to do.  That is because bankruptcy gives you and you creditors finality and it puts you on the road to good credit as you can now re-build our credit score and become a more productive person.

Many people ask me this question about responsiblity because they seem to think that filing bankruptcy and discharging your debts is somehow not honoring their promise to pay for the debts that they have incurred.  They feel that they are being irresponsible and dishonorable.

I remind them that debts have a creeping quality that can slowly accumulate and take over all of your available resources until there is nothing left to pay your ongoing bills.  This can happen insidiously without your noticing and with out you intending for it to happen.  It is just a miscalculation on your part but one that can lead to disaster if left unchecked.

Also it is true that your financial situation can change where you income is cut by a job loss or just a loss of hours at work.  There can be divorce, sickness, a new baby, an accident or a business downturn or any of a whole host of reasons why you cannot honor your debts like you originally intended.  These intervening circumstances can cause your financial situation to become critical in a hurry like a nuclear meltdown.  One day you find that you can’t afford to buy groceries but the phone is ringing fifty times a day from some collection agent who is trying to get you to promise to pay money that you don’t have.  It’s not responsible to let this situation continue.

So it is not irresponsibility that usually leads a person to need a bankruptcy.  It is just the facts of life with its ups and downs and twists and turns.   It is also true that we are human and therefore inherently imperfect.  We make mistakes all the time.  We can’t predict the future but we are naturally optimistic about it.  We always expect things to turn out well but that expectation is not always realistic.  When things don’t turn out well some may need bankruptcy.

Now I would argue that if your finances get far out of hand and your ability to pay your debts is not there then it is time to throw in the towel and do the responsible thing.  Admit that you were wrong.  I have done it personally many times in my life.  Once you admit that then you can notify your creditors that you are choosing the legal, moral, right, and responsible thing which is filing bankruptcy.  You are notifying them that you will not be paying their debts back.  The creditors will go away and stop bothering you for debts you cannot pay and they will move on to someone else and use your bad debt as a tax write-off.

Now you can re-build your credit score.  With that you can once again get financed to so you can buy things like a car and a house if you choose to.  Your score will be better on average three years after bankruptcy and a fresh start than if you choose to try to pay those old debts back because on average most people will fail to do so.

So do the responsible thing.  File bankruptcy.

I am a bankruptcy attorney practicing bankruptcy law in San Diego, CA.  Please visit my websites for further information on bankruptcy at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office to speak to me about any bankruptcy issue for free at (619) 702-5015.

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Are credit card companies unleashing the dogs of war? Their calls appear to be increasing in frequency.

You may have experienced that it doesn’t take long for the credit card company vultures to call you if you are late.  One blog I found called them the “collection police”.  The blogger was shocked that he got a call after being 1 day late.  Someone from the collection police called him one day after his payment due date and asked for a payment right away.  He was floored as he had never been late on a payment in his life and the last thing he expected was a call from his creditors.

I certainly have been late on my payments to these credit card companies and I have talked to India many times.  I often ask about the weather in Mumbai when I get on the phone with one of these people who speaks english with a funny british accent.  But it does seem like there has been a lessening lately in the time that credit card companies give you to pay your bill.

It used to be that these companies (in the good old days) allowed you to be 30 days late before you heard from them.  Then it seemed to advance to 2 weeks and then one week and now my clients report getting calls from credit card companies when they are one day late.  The collectors call and ask for an immediate payment and they don’t seem to care if you have been on time for 6 months or 60 years.  They couldn’t care less and they just ask for the money.  They are starting to act like loan sharks from mob movies when they say “just pay me”!  They truly seem to be unleashing the dogs of war after only one day.

The blogger who got the call was shocked by this but I would advise him to get used to it.  I noticed that these guys from these credit card companies are calling me quickly if I’m late on a payment and they don’t wait long.  I theorize that they have stepped up their enforcement of their debt collections.  Someone has reasoned that if they could just get the calls out quicker and the money in faster than they could collect more.

It is the time value of money.  If the money is in their bank earning interest then they get the interest and not you.  Now remember that they have millions of accounts and even one day quicker on payment could net them millions more dollars so they get the calls out to demand you pay them more and more quickly.  In the future I expect that they will come up with some hour in the day when your payment is due and then they will call you at one minute after that hour has elapsed.

So get used to it as this is the way it will undoubtably be for some time.  For now expect calls to come even if you are one day late and even if you have been on time with your payments for your whole life.  The company and the guy in India don’t care about your payment history or how good of a person you are.  They just want your money now.

One sure-fire way to rid yourself of this headache is to file bankruptcy.  That will stop the calls and end your liability for the debt.

I am a bankruptcy attorney practicing bankruptcy law in San Diego California.  Please visit my website at www.farquharlaw.com.

What’s in your wallet? These huge credit card companies are plenty rich- it’s okay to file for bankruptcy!

Bank of America, Chase, Wells Fargo, Capital One, Citibank, Discover, American Express.  Recognize these guys?  You probably owe them money right now and I’m not talking about for your mortgage, car, or for some other secured asset.  I’m talking about credit cards.  What’s in your wallet?  Probably there is some credit card in there right now with one of these names on it and you are in debt.

If you check you will see that these are very large companies.  They have billions of dollars in assets and if you think about it is a very easy business to run.  Think of them like Joe Pesci in the movie “Casino”.  They get a little money and they “put it on the street”.  But you are the street.  They borrow money at a low-interest rate and lend it to you at a higher rate.  If you default or are just late on the payments then they will jack your interest rates and charge you all sorts of penalties.  They make a tremendous profit on you when you cannot pay them.

Remember they don’t have a plant with machinery where they make things or even an office where they give advice.  They just need a little small space where there is a phone with which they can call you twenty times a day when you don’t pay them.  Are you getting those calls now?  Most of us do and they call now not just when you are a month late or even a few weeks late but if you are a day late.  They seemed to have recently decreased the time they allow you to not pay them.

According to Wikipedia Bank of America is the largest financial services company in America and also the largest bank holding company.  It is the second largest bank in the country by market capitalization.  As of 2010 B of A is the fifth largest company in the U.S. by total revenue and the second largest non-oil company in the U.S. after Wal-Mart!

Wells Fargo is the fourth largest bank in the U.S. by assets but the second largest by market capitalization.  JP Morgan Chase has assets of $2 trillion.  Citigroup has the largest financial services network in the country and it has over 200 million customers.  Get the picture?  They are huge and they won’t miss your debts if you get them discharged in bankruptcy.  Most of the big banks received federal bailouts financed by your tax dollars when they ran into financial difficulty.

Where is your bailout?  Do you get a break when you get into financial difficulty?  These companies are the largest and richest companies in the world and they are deemed “too big to fail” and when they get into trouble they run to the federal government (that’s you) and they ask for and get a bailout so they can make more money.  Did you get a break?  A bailout?  Where can you go when you run into financial trouble?  How about they only call you ten times a day when you owe them money?

Forget about it.  It’s not going to happen.  You will get no breaks from these companies.  They only move one way and that is forward in collecting money from you.  They will call you, hound you, and harass you into paying them.  Your only way out is to file bankruptcy.

Bankruptcy stops the calls, the harassment, and relieves you of the liabilities for those debts.  It makes sense and is the only break you are going to get.

So don’t feel bad for these banks who are too big to fail.  They are the largest and richest entities in the world and they won’t miss your little debts when you file bankruptcy.  They will write it off as a loss on their corporate taxes.  Remember that most people have paid back all of the money they borrowed on their credit cards with interest before they file bankruptcy.  It’s just that the interest rates are so large that they have to keep paying indefinitely.

How long does it take to pay off a card if you make the minimum payment?  I don’t even know anymore but it used to be 30 or 40 years.  That is debt slavery.  Don’t let yourself be a slave!  File for bankruptcy if you have debts you cannot pay!

I am a San Diego bankruptcy attorney.  Please visit my website at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation on any bankruptcy or debt related issue at (619) 702-5015.  Call now for free credit report and analysis!

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Do you need a “mulligan”? How about a do-over? Try bankruptcy. It gives you a fresh start.

According to Wikipedia a “Mulligan” was first used in the game of golf.  According to one version of the story the name came from a Canadian golfer who during a golf game claimed the right to hit the golf ball a second time after his first errant shot.  His friends then decided to call this a Mulligan and so was born the name.  It is also called a do-over and other sports have picked up on this concept and gone with it to allow players to re-do a bad play of some sort.

If its good for sports then how about you?  Everyone makes mistakes in life so why should financial mistakes be any different?  People borrow too much from credit cards or buy cars which are too expensive or buy houses that are too large.  Some people buy these things and then lose their jobs and then can’t afford to pay for them.  Others start businesses with every intention to make the business a success but then the business fails for some reason or another.

The point is that people make mistakes.  Some mistakes are forseeable and others are not but all humans are fallible.  We forgive people in sports and in other areas of  life so why not forgive them with their financial mistakes.  The Jews in the old testament forgave debt every seven years.  They knew back then that people without debt were better members of society than those with debt.  They were happier, more productive, and more of an asset to society when their debts were wiped away.  This type of debt forgiveness is as old as the bible itself.  (See here for my blog about bankruptcy and the bible).

Bankruptcy has been in the western world at least since the middle ages when the Venetians used it to stop doing business when they were broke.  It was used in England for many hundreds of years and it came over to America where it has been used extensively for businesses and individuals.

Bankruptcy became the preferred choice for many with large debts.  It is true that a stigma of failure attached itself to bankruptcy which caused many to avoid this choice for longer than they should have.  That stigma is still around today but as many see corporations emerging from bankruptcy stronger they say why not using bankruptcy to liberate individuals.  Why not use bankruptcy to clear out your own debt and to give you a fresh start?

Bankruptcy allows you to wipe away old debt that you cannot possibly pay and get a fresh start.  So if you need a Mulligan, a do-over, or a fresh start without debt then consider bankruptcy.  We forgive all kinds of mistakes in society so why not your financial ones.  You may have had the most honest of intentions when you incurred the debt but things did not work out.  Sometimes the reasons for your financial troubles can be totally beyond your control like the current recession.

So file bankruptcy and lose these debts and give yourself a much-needed Mulligan.  You, your family, and the whole of society will benefit from your decision. (See here for my article on 12 reasons why you should 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 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.

Don’t put you head in the sand- your creditors will not stop hounding you until you pay them or file bankruptcy!

Many of my clients have debts that are very old.  Collection agents have long since been brought in and my clients are being called on the phone sometimes 20 times a day to pay these debts.  It’s especially vexing if you have a number of these collectors each trying to call you numerous times a day.  Most people in this position have long since stopped answering the phone.

Creditor harassment can really affect your life.  It makes you constantly uptight, nervous and upset.   You know in the back of your mind that something must be done about these debts.  Many people can get seriously depressed about their debt.  This can lead to all sorts of bad consequences.  If this is you or someone you know then read this.

The point of all this is why live this way when it is totally unnecessary?  There is an alternative to this and it is filing bankruptcy.  By the time these collectors are calling you this often on this many debts its clear that you cannot pay them.  Its time to get your head out of the sand and admit the reality that is staring you in the face.

These collectors will not stop pursuing you and they will call, fax, e-mail, and send you letters continuously until something is done about the debt.  If they can’t get ahold of you for an extended period then they will usually file a lawsuit against you in state court.  This filing goes on your credit report and should be avoided if possible.

Once these creditors get a judgment against you in state court they will use all available attempts to collect on that judgment like garnishing your wages, seizing you bank accounts, putting a lien on your real estate, or getting you into court for a debtor’s exam.  If you miss the debtor’s exam they can issue a warrant for your arrest.

I know this because one of my clients got one of these debtor’s exam notices recently.  In his case we were able to file his bankruptcy the night before he was due in court and that stopped the whole collection process.   The point is though that all of these things are bad for you and they can only cause you trouble or loss of money, probably both.

The good news is that filing bankruptcy stops all of this whether you have been sued or not.  Please stop trying to avoid the reality of the debts.  Don’t be the ostrich!  Bankruptcy, debt relief, happiness and freedom are only a phone call away!

I am a bankruptcy attorney practicing in San Diego.  For further help please visit my website at www.farquharlaw.com.

Commodity prices are going up, the dollar is dropping in value! It might be a good time to file bankruptcy.

(See my update on price rises and its affect on the economy: http://bit.ly/HUNMNJ.)

There has been a lot of talk about possible deflation or a spiraling price drop in the market.  This does not seem to be happening as commodity prices are going up across the board.

It started with gold but oil is up as are wheat and corn and milk and meat and just about everything else too.  There is an article in today’s LA Times talking about how prices for all commodities are going up, not just oil and gold.  Coffee, wheat, sugar, rice, cotton, soybeans, paper, cheese.  It’s all going up.

Inflation worries are returning.  Bad weather resulting in poor harvests are to blame but so is increasing demand from India and China.

US retailers and sellers of these goods like Wal-Mart and Kraft and General Mills have all announced that they will raise prices soon.  Some by as much as 40%.  This current situation appears to be highly inflationary and it doesn’t appear to be temporary.  I don’t think demand from China and India is going to lessen.  In fact it should increase over time driving prices even higher.  You should notice this at the grocery store soon.  All of your food, gas, an everything you need to buy is getting more expensive.  It looks like inflation will take over and not deflation.

The other important thing happening here is that the dollar is dropping.  It has dropped more than 12% since June against the other major currencies.  According to the LA Times this is because our government wants it to!  It appears to be the policy of our government currently.  They seem to think that our products will get cheaper so other countries will buy more.  But what about the US consumer?  How will he or she pay for these higher prices?

This drop in the dollar has caused investors to look for a way to buy something that will hold its value.  Investors often look to commodities when faced with this currency devaluation.  Investors buy up all of these commodities to preserve their wealth and in doing so they drive up the prices of the everything we consumers need.

This results in huge price increases for the consumer and thus I would argue that this is a foolish policy by the US government that is hurting the american people.  Americans are not getting a raise to pay for these increasing prices and in fact many people are unemployed with no prospect of finding a job.

It could also be government policy to encourage inflation as a way to pay back the huge debts with cheaper dollars.  Apparently the government is printing more dollars which is inherently inflationary.  It could be that the policy is to inflate our way out of these huge debts.  This was tried many times most notably under the German Weimar in the 1920s where hyperinflation did not save but actually destroyed the economy.  At the end of that mess Hitler came to power.

The reality for you and me in the stores now is that commodities are getting more expensive because it takes more dollars to buy them because of a faulty government policy of currency devaluation.

I would argue therefore it is a good time to file bankruptcy if you have old debts you cannot pay.  You may need your money just to buy groceries, supplies, and the other things you need to ride out this recession.  Don’t give your money to some creditor for some old debt that went to pay for something you forgot about if you need what little money you have just to survive today and into the future.

I am a bankruptcy attorney practicing bankruptcy law in San Diego CA.

For further help please visit my websites at: www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.