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

After filing will bankruptcy be a “skeleton” in your closet?

I just read an article that really set me off.  According to an article posted online by the Washington Guardian 13 people running for the US Senate have bankruptcies or criminal records.  One candidate, Scott D’amboise, filed for chapter 7 bankruptcy protection in 2003 where he listed more than $100,00 in credit card debt, doctors bills, and a mortgage.

In the article they state that D’Amboise’s son had a medical crisis that caused him to undergo seven operations and at the time his medical coverage was insufficient to pay for these expenses.  His $100,000 in credit card debt was also probably related to that medical bill too.  This is very common as many of my clients run up their credit cards in an attempt to pay medical bills before they throw in the towel and file for bankruptcy.

Though this type of bankruptcy scenario seems common to me the article takes on a disapproving tone about these bankruptcies.  They describe these people as “candidates with past troubles” and they include bankruptcies and criminal records in the same article which mixes the two up as if they are the same thing.

Bankruptcy is a legal, moral, and federally approved and legitimate way of dealing with debts that one cannot pay.  There is certainly nothing immoral, unethical, or criminal about it.  To include criminal issues and bankruptcy in th same article is extremely unfair.  D’Amboise in under a legal, moral, and ethical duty to provide medical care to his son.  If he does not have the money to pay for it then he has to borrow just like all my other clients and just like any of us without the resources to pay the medical bills.

The monthly payment on a $100,000 credit card debt would be astronomical depending on the interest rate and probably beyond the ability of the vast majority of Americans to pay.  If D’Amboise did not file for bankruptcy he would be hounded by creditors who mostly have no mercy and will call his home endlessly.  He would then be subject to lawsuits and collection efforts which would tap his bank accounts and garnish his wages leaving hin even less money to live on and pay his bills which would undoubtably get him into further trouble.

Another candidate, Hector Balderas, apparently filed for bankruptcy back in 1995 when he was a college student working on an assembly line.  How many college students do you know that also work on assembly lines?  Instead of congratulating him for his hard work there seems to be a strong note of disapproval for his filing bankruptcy when he was only 21 years old.

The article then goes on to talk about the crimes of other candidates as well as alleged bankruptcy fraud of another candidate.  To compare bankruptcy with crime and fraud is a very bad and unfair thing to do in my opinion.  Bankruptcy is certainly legal and often he only good option for people in serious debt.  There are other options to bankruptcy when one has a high degree of debt except they are all worse than bankruptcy for the debtor.

Bankruptcy settles debt by discharging it legally.  If debtors have any surplus assets (above the allowable exemption amounts) those assets are sold to pay their creditors.  The whole system is monitored by a series of bankruptcy trustees and a bankruptcy judge as well as federal law enforcement to prevent fraud and crimes.

How is it then that we still get these articles that seem to connect bankruptcy with fraud and crime as if they are all the same sort of skeletons in closets?  This is ludicrous and wrong. Bankruptcy is not doing something wrong, it is doing something right.  If you have debts you cannot possibly pay and the wolves are at your door to take your bank accounts, your assets, and your income what are you to do?

You can’t escape the debts and you can’t pay them but you have to live.  Many hide or go underground to avoid this situation and that is wrong.  Some check out altogether and that is tragic.  The right thing to do is to admit you cannot pay and file a bankruptcy.  If your kid needs operations then what choice do you have?   He must have the operations which can run into the hundreds of thousands of dollars.  Who in America can pay for this?  Very few.

Again there is often only one good and right and moral and legal answer to this debt situation and that is bankruptcy.  But let’s not mix that up with criminality because it is legal and has been so for hundreds of years.  It is also moral and sanctioned in Deuteronomy in the Old Testament of the Bible.  Bankruptcy has been around a long time and its time we stop trying to put a scarlet letter on any one who does the right thing and files one.

It is time for bankruptcy to come out of the closet and shed its skeletal image.  I say file one and be proud that you took the moral, legal, ethical, and right path to debt freedom and not another road that leads to bad things. The good news is that after a few of these people get elected and the public sees that they are still good people then they will pave the way for others to run for political office proudly after having done the right thing and filed 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 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.

What do I do after bankruptcy?

After your bankruptcy is over you can certainly begin enjoying your new life with your debts discharged and you don’t really have much that you need to do.  Your debts are now in the past and your future should be debt free.  There are just a few things that you can attend to:

1) Re-establish credit–  You will want to begin re-establishing credit right away after your bankruptcy.  There is no need to wait and you can certainly begin immediately.  You will want to get new sources of credit.  Loans, either secured or unsecured, that will appear on your credit report are a good way to begin to re-build your credit.  You can buy a car or furniture or anything that you pay off monthly and if you make your payments on time you will get positive points on your credit score.

You can and should also get 3 new credit cards after your discharge.  You should get solicitations from credit card companies right away after your bankruptcy is completed.   You can use these new cards to re-establish credit.  If you do not get solicitations then visit your credit union or bank where you have a deposit account.  They will probably give you credit there.

You can always apply for secured cards too.  These are cards where you give the creditor money and the creditor gives you credit based upon how much money you deposited with them.  These secured cards will report on you credit report just like regular cards so make your payments on time.  Remember also to keep your balances low.

 2) Check your credit report-  You will want to check your credit report after your discharge to see if all of your debts are properly reported as “discharged in bankruptcy”.   Challenge any debt not properly listed.  You can get your credit report for free at www.annualcreditreport.com.

 3) Stay out of debt- Be sure to be careful to stay out of debt.  You do not want to fall back into debt after your bankruptcy is over.  This is a good time to develop new habits with credit.  Use your cards to improve your score but pay the balances each month.  It is a good time to live debt free.  Remember too that you cannot file bankruptcy again for 8 years and you don’t want a second bankruptcy unless it is necessary due to some calamity.

 4) Move on with your life- You can now move on and get a new job or buy and sell property or travel and do anything you wish after your discharge.  You are required to report any large amounts of money you receive after your discharge but only for 6 months.  After that you can do anything you want and you are free of the system (as long as there was no fraud involved in your original bankruptcy).

5) Enjoy your new-found freedom Rmember that you are debt free.  Enjoy your new life!

I am bankruptcy attorney in San Diego.  Please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com for more info. about any of these topics or call me for a free consultation 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

Bankruptcy and the Bible. Yes, debt forgiveness is in there!

bible 3You may have heard it quoted.  It is written in the bible in the Old Testament.  I quote it here:  Deuteronomy 15:1-2, “At the end ofDeuteronomy 3 every seven years you shall grant a release.  And this is the manner of the release:  Every creditor shall release what he has lent to his neighbor.  He shall not exact it of his neighbor, his brother, because the Lord’s release has been proclaimed”.  Yes it is in the bible.  A “release” from your debts shall be granted every seven years by your creditors.

This verse therefore commands creditors to release people from the debts owed by debtors every seven years.  You could argue that the bankruptcy just enforces this biblical passage through the use of law.  You could easily argue that bankruptcy is indeed the very debt forgiveness talked about in this biblical passage.  (And I doubt the creditors will follow this biblical principle without bankruptcy law but you can try).

You could ask why is debt forgiveness in the bible.  Most of us in the debt relief business believe that it is in the bible because people knew in ancient times what we should all know now.  Debt is damaging to people, damaging, to society and damaging to the future of mankind.  It can’t be carried by people forever and it can’t be allowed to follow them and put them in debtor’s prison forever.

Debt slavery is extremely undesirable and indeed intolerable.  Debt must be released and people must be freed from it.  Ancient peoples knew that then and most of us who have lived with debt know that now.  And some would say that God commanded a seven-year debt forgiveness through this verse in case people forgot.  But it is clear that the bible sanctions debt release/forgiveness and it appears that it must be done on a regular seven-year basis.  It is hard to argue that this verse could mean anything else but that.

I believe that it is true that this forgiveness is necessary because people who are burdened with debt can’t spend, save, invest in homes or retirement and therefore can’t truly be productive members of society.  Sadly many of them check out and some even commit suicide because of debt.  Many of my clients have told me that they have considered suicide with all their debt prior to their consideration of bankruptcy.  Debt burdens are potentially the ruin of individuals and nations.  (see here for my article on my website on why you should file bankruptcy)

Bankruptcy is not the bad thing that many people believe it to be.  Many believe that it is irresponsible, somehow sleazy, underhanded, and in effect cheating.  Many believe that they must pay back their debts no matter how large they are and no matter how long it takes.

But then what is the purpose of your life?  To be a slave to your debt?  To spend you entire days on earth paying something to someone else that enriches them and impoverishes you?  With interest?  They knew better thousands of years ago.  I often believe that in modern times we make silly mistakes and have ridiculous beliefs that our ancestors would laugh at.

Bankruptcy is a liberator of people.  It frees them from debt and gives them a fresh start.

For all of our modern science and technology we still sometimes forget lessons they learned long ago,  One of them is that debt is bad.  It must have a limit in years.  It must be forgiven periodically.  This is good for everyone so let’s get on with it.

The next time someone disparages your thoughts of bankruptcy mention to them that it has been recommended for a very long time by some very trusted sources.  Enjoy your freedom and God bless!  Check out my blog about bankruptcy and Christianity here.

I am bankruptcy attorney in San Diego.  Please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com for more info. about any of these topics.  Or call my office for a free consultation 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.

Holy bible photo courtesy of Jemimus.  Deuteronomy photo courtesy of Billy Alexander.

Go ahead and file bankruptcy! What are you waiting for? Those debts don’t get any better with age!

Debts are not like wine.  They get much worse with age.  All sorts of fees, penalties, attorney costs, and other costs get added to them including interest.  The total amount owed can double or even triple in size.  As time goes on even more and more money is owed to these creditors.

The creditors will not go away either.  This is something that I continually warn my clients about.  They will continue to sell you debt and increase it as it goes.  Debt collection is one of the biggest industries in this country because it is so profitable.  It is also the one that is complained about the most to government agencies because of alleged abusive practices.

Collection agents are not nice people as you may have experiences first hand.  They don’t care what you problems or limitations are.  You may be on your death-bed or so disabled that you are completely unable to work.  When you tell the collectors that they will not care in the least and they will just demand that you pay them unreasonably high payments.  They will tell you to go borrow the money.  They have told disabled clients of mine just to pay immediately or they will sue them.

If one agency gives up on you then they will sell it to another and another.  They will never go away and always come after you.  They will ring you phone hundreds of times a day.  They will fill your mailbox with bills.

Eventually they will sue you in court.  You probably will not go to court or answer (most people don’t) and they will get a default judgment against you.  Now they can collect anytime they want.  They can lien homes, garnish wages, take your bank accounts or even get you into court for a debtor’s exam.  All of these things are bad, unpleasant and to be avoided.

Bankruptcy can end all this nonsense though and it is the only way I know to get out of these debts short of paying these people.  If you don’t have the money then paying is out of the question and that only leaves bankruptcy.  It may be time to admit this fact and begin to look into filing.  Bankruptcy will stop all collection efforts and stop these collectors from calling or suing or garnishing or liening or taking any other action to collect your debt.  (See here for additional reasons for why you should file for bankruptcy).

After your discharge you no longer owe the debt.  It’s a wonderful happy feeling on that day.  So think about it, call a bankruptcy attorney, and begin considering the real possibility of escaping your debts before they drown you.

Please visit my website for more blogs and really good bankruptcy information at www.farquharlaw.com or www.freshstartsandiego.com.   Or call my office for a free consultation at (619) 702-5015.  For my e-book, 13 things you should do to prepare for bankruptcy, e-mail me at farquharesq@yahoo.com.

“Occupy San Diego” has begun! But if you want a bailout like the banks then try bankruptcy. (But let’s add student loans to the list of dischargeable debts)

The “Occupy San Diego” movement is currently in full swing in our city.  Protestors have marched through San Diego and occupied a park in downtown.  It remains unclear just what they are protesting though.  Some in the movement say it’s “corporate greed”.  According to an article in Sign on San Diego the protestors are not just angry about corporate greed but they also object to the money flowing into the political system from the financial industry and the banks.  According to the “Occupy San Diego” website those in the movement say they are for “social and economic justice” and they are protesting “global financial corruption” and the financial influence that has infiltrated everything and led to the current economic crisis.

On the “Occupy San Diego” website they also have a list of items they recommend people bring to the protest, along with their tents, much like the lists for camping trips.  They tell you where the bathrooms are and whether the are 24 hour or not.  They talk about first aid, entertainment, as well as security.  Mostly they seem to be ready to stay and occupy these parks in San Diego for a long time as they prepare their list of demands.

Apparently the movement is being advertised and spread rapidly by social media and it is gaining steam.  Where it goes and when it ends is anyone’s guess.  I must admit that this thing is somewhat fascinating as I can’t remember another movement like this even though I don’t necessarily agree with some of the premises like the anti-capitalist, pro-government emphasis.  I personally prefer small government libertarian ideas that emphasize personal freedom.  But the movement is certainly interesting and I intend to drive by and maybe mingle as I work downtown.

We who practice bankruptcy law though do believe in our cause too.  We believe that we bring freedom from the terrible burdens of debt to average people who are 99%ers.  We regulary help free people from this debt but we also bring equality too.  We bankruptcy attorneys can take you down the same road as one of these corporations that regularly file for bankruptcy and shed their debt.  Any one individual person (or couple) can file and be just like a corporation.

We in bankruptcy believe he average person’s bailout is a bankruptcy.  What is a bailout after all except a forgiveness of your debt?  You don’t have to wait for the government to give you something that only big financial institutions have.  The 99% already have the power to get their debts forgiven.  You can get your debts forgiven tomorrow.  The legal framework already has been in place for hundreds of years. Average people just have to avail themselves of the bankruptcy process.

And if you are unemployed and have no income to pay those debts then bankruptcy makes even more sense.  Imagine waking up tomorrow debt free.  How would that feel?  You could get your bailout just like big financial corporations did if you file for bankruptcy.  It’s a wonderful thing for sure.

It is also true that many people around the country have massive student loans left over from their education. Many people had to borrow heavily to originally fund their education so they could get a job.  Many of those people cannot get a job now in this economy and they have no money to pay those loans back.

It is also true that these debts are not currently dischargeable in bankruptcy.  In fact Obama’s latest spending bill would allow private collectors for these loans robocall your cell phone to harass you into paying these loans.  He is making the situation therefore worse by allowing these companies to go after you for debts which you probably cannot pay.

If this movement wants to put in a demand that these debts should be dischargeable in bankruptcy then the movement would gain the support of mostly all those who work in bankruptcy because we believe that these debts should be dischargeable.  There is no reason why students should be saddled with these debts forever but someone who over-used their credit cards can get rid of those debts.

A stipulation could be put in the new law that the student loan debt would not be dischargeable until they are 10 or even 20 years old.  This would give collectors time to collect these debts and if they can’t collect in this time then they would have to forgo collection if the person filed bankruptcy.  I believe that it’s fair to say that f the collectors can’t collect within 10 or 20 years then the debtor probably will not ever be able to pay.  Those debts are probably uncollectable and debtors should be freed from having to pay them the way financial institutions have been given infusions of cash so they can continue to operate their businesses.

How about including that demand that in this protest?  If this happens then more people will obtain financial freedom and greater parity with corporations.  Student loans can be onerous for people who have no way to pay them in this economy.  How about a student loan bailout?  Make these loans dischargeable in bankruptcy and that is all you would have to do.

As for the protest I will continue to watch with great interest as I want to see where it goes and how it ends up.  Will these people ever go home?  Will hey set up tent cities?  Will violence occur or will they be peaceful?  Will police make arrests?  How many will join those already there?  Then where will they all go?  Will they shut down operations in this city?  What will happen nationwide?

I will continue to follow and blog about this movement.

I am a bankruptcy attorney practicing bankruptcy law in San Diego, CA.  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 or someone you know is considering bankruptcy then get my FREE E-BOOK; “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” by e-mailing me at farquharesq@yahoo.com.

Is hyperinflation coming to America? We have a 14 trillion dollar debt. Remember the Weimar Republic? (It gave the world Hitler).

Notwithstanding President Obama’s pledge to freeze government spending, the Congressional Budget Office is forecasting huge budget deficits in the next five years.  According to the CBO report our deficit will balloon by between 500 billion and 1.5 trillion each year for the next five years leaving us with an extra 4.32 trillion in debt or a total of over 18 trillion in debt by 2015.

Currently the amount of debt we owe as a country is not just still increasing but it is increasing rapidly.  We are not paying any of this debt back nor are we stopping the accumulation of debt.  In fact we are still accumulating additional debt at a dramatic rate.  This is madness in my opinion and sets us on a course headed for complete societal and economic disaster.

Phil Cavuto pointed out on Fox Business that the interest alone on this debt is accumulating at the rate of 4 billion dollars per day.  He went on to say that even if we did nothing and we did not borrow another penny, the debt will continue to increase by 4 billion dollars per day due to this interest.  This amounts to 120 billion per month and almost 1.5 trillion added to our debt each year attributable only to the interest on money that we already owe.  So next year our debt will be 15.5 trillion even if we don’t borrow any more money at all.

Worse still is the CBO prediction that as the debt grows we will have to pay higher and higher interest rates to get people to buy it.  This will cost even more and make the debt really spiral upward.  This is exactly what happened in Greece where borrowing became very expensive for the Greek government which exacerbated their problems tremendously.

We are close to having our debt equal 100% of our gross domestic product which is an extremely dangerous amount.  Greece reached the 110% level which has devastated their economy and led to extreme austerity measures and tax increases.  We will reach this level in 10 years.  Greece, as part of the EEC, was eventually bailed out temporarily by Germany but the Germans were not at all happy about it.  Who will bail us out when we reach 100% debt to GDP?  There is no one who can bail us out.  These debts are too large and no country has the inclination to do it.

But we have added 1 trillion to the debt in just the last seven months and all the politicians can do is argue about raising the debt limit or freezing spending at its current rate.  We should be lowering this debt limit, cutting government massively, and paying off this debt.   A freeze in government spending is not nearly enough and would save us only 30 to 40 billion a year when we need 1.5 trillion for this year.

We in fact need massive cuts (including the military, social security and Medicare), elimination of whole departments in the federal government, a lowering of wages for every federal employee, massive layoffs of federal employees, as well as a sale of government land and property just to begin to save the 1.5 trillion in debt we will amass just this year.  John Stossel recommends closing the Departments of Education, Housing and Urban Development, Commerce, selling Amtrak, ending the drug war, and repealing Obamacare.  I think we need to do all of this and more.  The English are putting Sherwood Forest up for sale and the French and Italians are selling and leasing their historic palaces to balance their budgets.  It’s time we do the same.

For a good start we need my 25/25 solution where 25% of federal employees are laid off and those remaining are given a 25% pay cut.  The CBO recommends a 20% cut in spending.  Once we do the cuts then we can talk about selling some of the lands that the government owns out in the west and we can begin to discuss which federal government departments should be completely eliminated.  After the cuts and layoffs are made and the assets sold then I think the American people will be more open to talking about tax increases if this would help pay this debt back.

It appears though as if we are neither cutting nor selling anything and we seem to be just borrowing more money just to pay the interest on this debt.  Now I don’t know about you but I see a real problem here.  I am beginning to think that Glen Beck is right and that there is a real reckoning coming for America.   How can we ever hope to pay this debt back with these kinds of totally inadequate measures?  It’s unsustainable and it’s quite possibly heading us down the road to catastrophic economic and societal failure.  Historically this is not without precedent.

Remember the Weimar Republic?  After World War I ended in 1919 and the Treaty of Versailles was enacted, Britain, France, and America demanded that Germany pay reparations for all damages caused by the war down to the last barn, cow, and chicken destroyed.  The war was not Germany’s fault alone as it was others who started and waged it before Germany’s participation began.   The Serbians assassinated the Arch Duke of Austria-Hungary, the Austro-Hungarians invaded Serbia in response, the Russians mobilized their military to defend Serbia.  Only then did Germany feel threatened enough to enter the war.

France was allied to Russia and German military doctrine at the time said that Germany needed to defeat France quickly before Russia was able to mobilize and attack Germany. If that happened Germany would then face a two front war she could not win.  So poor France got invaded by Germany.

Once the Germans invaded France and Belgium they occupied their countries and waged war in them for 4 years.  The Germans inflicted very heavy damages and which devastated France and Belgium.  After the war the French and Belgians wanted the Germans to pay for the damages of a war which had ravaged every country in Europe.  The fallout of the war was that not just France and Belgium were destroyed but also the Russians had a revolution and the Austro-Hungarian and Ottoman empires collapsed and were broken up.  20 million people died before it was all over but the Germans were blamed for all of it and they were forced to agree to pay huge reparations.  If the Germans did not agree then the allies threatened to resume the war.   These same reparation demands also created a huge resentment and a deep desire for revenge among the Germans people.

These reparations were in the end beyond Germany’s ability to pay just like our 14 trillion debt is beyond our ability to pay.  In short this caused Germany to try to inflate their way out of debt so they printed money endlessly which led to extreme currency devaluation.  The hyperinflation that resulted was so bad that when workers were paid they were immediately released to go to stores to buy food before their currency was worthless that very same night.  The government had to print million mark notes to keep up with the hyperinflation and prices for a single family’s bread and meat rose into the billions of marks.

The worst of it though is that as Hitler himself stated in his book, Mein Kampf, this hyperinflation in the early 1920s and the troubles it created for the whole of Germany made a Nazi takeover inevitable in Germany.  There was a perception among the German people that democracy had failed to do anything about the hyperinflation crisis in post-war Germany so a call for a strongman went out.   This cry grew louder and louder as riots and political clashes occurred in the streets between communists, fascists and nationalists.  Anarchy reigned in Germany and former soldiers formed armed groups which clashed with other armed groups.

When Hitler appeared on the scene he seemed to be the strong man the country was waiting for to bring peace and stability to the nation and to solve the problems that democracy had failed to solve.  Since the ground was primed people took to Hitler in a big way.  Women would swoon and whole crowds would get in a kind of trance when he spoke.  Women wrote to him to ask him to marry them.  Some saw through him but too many became blind followers or at least acquiesced in what he did and said.  It was the chaos of hyperinflation, default and monetary instability that brought Germany (and the world) Hitler.

Hitler originally came to power by taking over the obscure National Workers Party and renamed it the National Socialist (NAZI) Party.  Hitler’s fiery rhetoric initially attracted many more members to the party causing it to grow dramatically as he ranted about the social and economic chaos of Germany and he blamed the Jewish people for all of it.  After establishing a strong party base the Nazis were  poised to take over all of Germany after Germany’s economic troubles deepened during the worldwide great depression of 1929.  Hitler so wanted revenge for World War One that after he defeated the French he had them sign an armistice in the same railroad car that the Germans had to sign an armistice in is 1919.

The question is whether a situation similar what happened to post-war Germany could happen here if we default on or try to hyper inflate our way out of our $14 trillion debt.  And further could the resulting terrible economic fallout lead to a  call for a strongman like an American Adolf Hitler?  Will hyperinflation occur here which will lead to street riots and clashes and a perceived failure of democracy?   And who will be scapegoated and attacked this time for the failure of America?

The politicians now seem to be doing nothing while we steadily accumulate more debt.  When the house of cards inevitably collapses will our politicians continue to do nothing so that people again look for a strong man to save them from the riots, violence, and massive inflation that will inevitably occur?  Will that strongman scapegoat a group of people who will eventually be slaughtered?

With an unsustainable 14 trillion debt (that we keep increasing by more borrowing)  how long will it be until the government has to “monetize” the debt which means how long until they to print money excessively to try to pay for the debt and its ever-increasing interest?  They now call money printing “quantitative easing” but it is still the same thing.  Money printing and hyperinflation was what happened in Weimar and we in America appear to be on the same course.  If and when this happens hyperinflation will assuredly come to America as the currency becomes worthless and chaos will ensue.

If America tries to default on the debt instead of inflating the currency then how long before our creditors demand that we pay it back?  This is what happened in Weimar Germany as the French and Belgians rode into Germany and occupied the Ruhr valley in 1923 which was the German industrial heartland.  France and Belgium occupied the Ruhr because Germany naturally defaulted on the reparations payments.  To ensure repayment France took over and occupied this industrial area and forcibly extracted the resources necessary to get their money paid back.  This action infuriated the Germans who went on strike and refused to work as slaves for the French but the anger and resentment this occupation caused helped pave the way for a fascist Hitler takeover.

If we now default on our debt payments to (our landlords) the Chinese like the Germans did in the 1920s how would we Americans react to Chinese troops occupying part of our heartland to ensure that they get their money back?  However unlikely and impossible to imagine this has happened before.  Default on the debt that we owe to the Chinese and others could lead to drastic things happening like what happened to post WWI Germany.  The countries that lent us the money will not be any more understanding than England and France were in 1919.

In fact if history repeats itself in any way then these lenders will just ruthlessly demand their money at any cost to America including its destruction.   Indeed the Chinese leaders have their own concerns and they will surely not be concerned with what happens to America.  They don’t want their people to riot and overthrow the Chinese communist leadership if America defaults on what it owes to the Chinese.  The Chinese government will only care about retaining power if it runs short of money sufficient in quantity to keep the Chinese people happy.

The French Premier (Poincaré) in the 1920s argued that the continued forced reparation payments were necessary to keep Germany in “chains” because once those chains were removed Germany would again become powerful and start another world war.  I expect that many anti-Americans in the world today would make the same argument against America when they demand extreme measures be imposed against us to ensure repayment.  America haters will also demand that America be kept down so that America cannot cause any trouble in the world.

Though occupation is unlikely China and other lenders will surely at least stop lending us more money in response to our default on our debts we owe to them.  When that happens will we end up like Greece with riots in the streets as the government shuts down and is unable to operate or disperse payments to its employees or to the recipients of government aid?  How many people are now dependent on the government one way or another?  When the faucet is turned off and government dependents don’t get the money they have come to rely on they will surely riot here as they are doing in Europe.

Many radical groups from diverse ideological backgrounds are now waiting in the wings for this kind of crisis to attempt a seizure of power just like in Weimar Germany.  When they clash with other groups in the streets like in Weimar in the 1902s, how long will it be before people are clamoring for a solution to the chaos.  Will we too be attracted to a “strong man” who promises peace and security?  In the 1930s fascism was widely popular across the world.  Will we too view democracy as a failure and a modern-day Hitler as a great hope?

If we lose democracy we will lose all of our freedoms which we have relied on for 200 years and we will have dictators ruling us.  Democracies almost never go to war against each other but only sometimes go to war against another dictatorship.  Two dictatorships will often war against each other.  So if democracy dies then prepare for more war, no freedoms, rule by a dictator, and a dark ages that could last indefinitely because there is no one in the world to save our freedoms as America has saved other countries from dictatorships in the past.  Who will be there to defend democracy if America fails?  This is what Reagan said in the 1980s.

As a bankruptcy attorney I know that when you have a huge debt you cannot pay back, and you can’t (or won’t) cut spending, and you have to borrow money just to pay the interest on this debt then the financial end is near.  Borrowing money just to make interest payments is a signal that the situation is critical, unsustainable, and near the end.  If no one steps in to pay there is nowhere to go but bankruptcy.

For individuals, businesses, and even for cities bankruptcy is the best alternative when the financial end is at hand for one of these entities.  Bankruptcy gives the entity a fresh start and the debts are wiped away.  The problem with this 14 trillion national debt is that states and nations are sovereign entities and sovereign entities cannot go bankrupt.  They must either pay their debts or default on them.  Both of these options have extremely bad consequences.  America appears headed for a deeper disaster than we can imagine.

(See my update on inflation spending and its consequences: http://bit.ly/HUNMNJ ).  (See here for an update on the actual unemployment rate).

I am a practicing bankruptcy attorney in San Diego.  You can 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!

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.

Why you should file bankruptcy if you have debts you cannot pay

In celebration of reaching 50 blogs I thought I would update one of my most popular articles to date.  In this article I talk about all of the reasons why you should file bankruptcy.

I find that my clients want to file and they need to file but they are also apprehensive about  filing bankruptcy and they are concerned that bankruptcy is somehow shameful, wrong, or deceitful.  I try to get them to see that it is none of these things and that there are very good reasons to file and great benefits to filing.  I also try to show them that it is a legal, moral, and ethical thing to do that is as old as the bible and that corporations do it whenever they can.

You get a fresh start, you get peace, freedom, anonymity, your credit score will improve, you can keep most of your assets.  I also try to explain that times are tough, you need your money, and that bankruptcy is their bailout and things will probably get worse for them if they don’t file because collectors will not stop trying to collect from them.

I try to get my clients to see all of these things about the benefits to filing.  Often the biggest hurdle is the psychological block that they have to bankruptcy itself.  So please read my article and see if you should also possibly file bankruptcy if you have debts you cannot pay.

 1)  You get a fresh start.  Filing for bankruptcy is powerful and useful tool which allows you to discharge most of your debts and usually keep most of your assets.  You get a “fresh start” with your life and you can begin again financially without the burden of debts you cannot pay.

You can also avoid the permanent debt trap from which it is very hard to escape.  Remember that bankruptcy is nothing new.  It is as old as the Old Testament of the Bible.  It has been around in some form for thousands of years.

The tradition in Old Testament times was to forgive debt regularly every 7 years.  This practice had a tremendously beneficial effect on society and its people as it can on you.  Even back in ancient times people knew that everyone in society is better off if individuals don’t carry around debt long-term.  They knew then that debtors were happier, healthier, and better and more productive citizens when their debt was forgiven.

How badly is the burden of all this debt affecting your everyday life now?  Do you feel the fear, the worry, the anguish we all feel when we are over our head in debt and we don’t know how to get out or what to do.  Bankruptcy is a legal, definitive action you can take that can make the debt all go away and put your life back together to give you a fresh start.

 2) Usually your credit score will improve over and above what your credit score would be if you didn’t discharge these debts.  By the time most people file bankruptcy they are so far behind in their credit card payments that bankruptcy will actually help improve their credit score.  Each month that you don’t pay those monthly credit card bills your credit score remains low.  Since most people are unlikely to pay their debts off this results in a permanently low credit score.

If you are in the same position then bankruptcy will certainly help you.  Your credit score will decrease immediately upon the filing of the case but when your bankruptcy is finished your debts will appear as “discharged in bankruptcy”.  Those debts discharged in bankruptcy will then no longer negatively impact your credit score.

You can now begin to rebuild your credit score with new credit.   You need to have credit in your name and use that credit wisely to increase your score.   If you charge things on your new cards and then pay your payments on time and pay the full balance every month you will slowly and steadily build up your score.  Every month that you pay those payments you should get points added to your score.  These points will add up over time.   You will get credit card solicitations after the bankruptcy discharge so use them wisely to increase your credit score.

Any other payments you make on time for financed items will help drive up your credit score.  Some of my clients reaffirm their cars in bankruptcy so they will get the benefit to their score when they make payments.  Others will finance a new car after bankruptcy for the same purpose.

 3) You get freedom– Shakespeare said “never a borrower or lender be” because as a borrower you become a slave to the lender.  If you owe credit card debt then you are a slave to those big banks to whom you owe money.  You pay huge amounts of interests to these big banks every month to service your debt.  These interest payments only serve to enrich very large corporations at your expense.

Filing bankruptcy can serve to free you permanently from both the worry and the financial strain of continual and unrelenting debt and the stress of the collection actions.  Your discharge is your key that unlocks the debt prison doors.

 4) You can keep most of your assets.  Most people can retain most of their assets in a bankruptcy.  That includes your house and your cars.  Many people think they will lose everything.  We have very generous exemptions in California that allow most people to keep everything they own.  If your house and cars don’t have any equity then you can certainly keep them.  If they do have equity then usually we can find a way to exempt them.

Your house is probably secured.  If there is equity in the home then there is a homestead exemption we can use to allow you to keep it.  Your car may be secured and if there is equity in that we can use the car exemption and the “wildcard exemption” together to keep your car (if we don’t have to use the homestead exemption on your house”).

Cars usually have no equity if financed and these days with housing prices low, many houses also have no equity.  Your personal furniture and clothes you can keep under a separate exemption and jewelry and “tools of the trade” also have their own exemptions.  Even your retirement fund, if it’s an IRA or 401k, is protected by federal bankruptcy law up to $1,000,000.

 5) You will get peace back in your life.  When you file bankruptcy your creditors must stop calling you on the phone.  Most of my clients have not answered their phone for some time before they actually consider bankruptcy.  Filing a bankruptcy case will stop all of these collection efforts with the miracle of the “stay” that is created once you file bankruptcy. This stay stops all creditors from contacting you in any way once they get notice from the Bankruptcy Court of the filing.

So remember that as far as you debts go, peace and tranquility are waiting to return to you if you file bankruptcy.

6) No one needs to know.  Many people are afraid of bankruptcy because they think that their landlord or their employer will find out about their bankruptcy and they believe they can be evicted or lose their job.  This is not true and you will still have anonymity if you file.  You don’t have to tell anyone that you filed bankruptcy and probably no one will know unless they do a public record search.  It is unlikely that this will happen though so your secret should remain safe.

Your landlord will probably not be notified especially if you are on a month to month lease.  Your employer need not know unless you already have a wage garnishment that needs to be stopped.  You cannot be fired from your job or thrown out of your apartment or home because you filed bankruptcy if your employer or lenders or landlord do find out.  Discrimination of this sort based upon a bankruptcy filing is illegal.

7)  You have other things to do with your money–   If you are like most people then you need the money you earn from working to pay for your own personal bills and pay for your family and their needs.  You don’t need to give this money to these large banks.  You don’t need to spend this money to enrich large banks for money you borrowed from them a long time ago.

If you earn less than is allowed in the means test then you can probably file bankruptcy and discharge your debts.  You can then use your money for other purposes than paying off old dischargeable debt.

 8) You have already paid the credit card companies back–  If you are like most of my clients then the debts that you owe are probably very old.  You have probably been making payments on these debts for years.  If that is true then you have already reimbursed the creditors for them.  By the time most people file a bankruptcy they have already paid back all of the money they borrowed plus some interest. This is because of the very high interest rates that credit card companies charge.

Remember that the banks borrow money at a very low-interest and then lend it to you at very high interest.  They keep the rest.  It is a most profitable business and the make lots of money doing it.  The banks want to keep you paying them this exorbitant interest indefinitely.  Some of you are paying as much as 30% interest on the money you borrowed.

Don’t make the mistake of feeling that you need to keep paying these companies.  You have already paid them enough so file a bankruptcy, discharge the debts and move on.

 9) Times are very tough and many people need to file more now than ever.  There is a recession on now and you need relief from your debt maybe more now than ever before.  Many people are unemployed and those who are employed don’t know if they may lose their job in the near future.  Even if your job is secure and you expect no pay cut, you still probably need your funds for your ongoing bills.  Why pay for old debts incurred long ago when the money you borrowed back then often went to pay for other bills?

Times are very tough in this recession so explore the possibilities that bankruptcy opens up today.

 10) Personal bankruptcy is your bailout – Corporations file bankruptcies all the time including the credit card companies that you owe money to.  They bail out with bankruptcy so why not you?  In addition many banks have received government bailout money to keep them going.  They then turn around and bug you for money.  That is your money they are receiving from the government but they are not giving you any breaks.

So if big companies can file bankruptcy and get your money sent to them so they can collect more money from you then why don’t you get your bailout?  File bankruptcy.

 11) The creditors absolutely will not stop trying to collect from you until you pay or you are dead or you file bankruptcy.  They only know one thing and that is to collect your debt with all of the interest and penalties that they can add.  They will continue to sell the debt to other collectors and these collection agents have a nationwide network.  They buy, sell, and trade these debts but they keep trying to collect.  They are like the Terminator in that movie.  They are like a machine which won’t stop until you are dead.

If you file bankruptcy then they must stop trying to collect the debt. They will then discard your debt because if they try to collect it after the bankruptcy discharge then they would be in violation of federal bankruptcy laws.

 12) Your situation will probably continue to get worse and worse if you don’t file bankruptcy or pay these creditors.  The collection efforts will increase in intensity and eventually the creditors will file suit.  Many people try to put their heads in the sand and hope the debts will disappear.  This is not the case though as the situation will only get worse.  The debts will grow in size as interest and fees grow.  Eventually some creditors will file suit and serve these on you.

If you do not file at this point then you could get a default judgment against you and they will use this judgment to collect money from you.  They can now lien your house and file a lien against you personally.  Some liens cannot be removed in a chapter 7.

In addition creditors with court judgments can garnish your wages so your income could decline.  They can also get access to your bank accounts and remove money from them legally to satisfy your debt.  You may need that money to pay a bill but it could be gone one day.  They can even call you into court for a debtor’s exam to get you to answer questions about your job, your bank account, and your general financial situation and they can get you in there every 6 months.

Not all of these things will happen to all people but these are the tactics creditors can use against you when they have a court judgment.  As you see here your financial situation will continue to get worse over time when you have debts.  It will not get better on its own and the debts won’t go away.  Therefore don’t delay and preserve your rights by exploring your options with bankruptcy.

(See here for my blog about what the bible has to say about bankruptcy.)

Thank you for reading my “12 Reasons to file bankruptcy article” and if I can be of any further help please call for a free consultation.  I am a San Diego bankruptcy attorney.  Please visit my websites at www.freshstartsandiego.com or www.farquharlaw.com.

Douglas G. Farquhar, Esq.

1901 First Ave. Suite 217H

San Diego, CA. 92101

(619) 702-5015  Call now for free credit report and analysis!

E-mail: farquharesq@yahoo.com

Websites: www.farquharlaw.com or www.freshstartsandiego.com.

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.

Don’t be a debt slave to huge corporations- file Bankruptcy and don’t feel bad for the credit card companies

I will be blogging more about this later because I believe so strongly in this.  Most of my clients express some kind of remorse for their inability to pay their debts.  They not only feel like they have failed but they feel like they are obligated to pay these debts and they don’t want to not honor their obligations to these creditors.

To that I say to them to remember that most debts are for credit cards and these creditors are gigantic corporations.  Most are among the largest corporations in the world.  They each have what amounts one of the most profitable business in the world.  There is very little overhead and they charge exorbitant interest rates to lend money that they borrow at very low-interest.  Then when you behind in your payments they  jack up your interest rates to 20% to 30% and then they really make money off of you.

If you watch the documentary “Maxed Out” you see that the debtors who are paying these very high rates are the ones that the creditors make most of their profits off of.  According to the  movie the credit card companies  in fact seem to want these people to get into debt, get behind, and stay behind so they can continue to make these ridiculously high profits off of them.   These people ,who are suffering with this very great debt, are the credit card companies favorite customers.

Credit card companies appear to want lifetime debt slaves.  In the movie they go into detail about how many people tragically commit suicide after running up these hug debts they cannot pay.  Don’t be one of these people!  Don’t feel bad for these huge corporations and don’t be a debt slave.  Bankruptcy itself was created to prevent people from falling into this trap.  We no longer have debtors prisons.  You will not be jailed for owing this debt so free yourself and file bankruptcy if you have debts that you cannot pay back.  Also certainly don’t waste any time feeling bad for these corporations who, in my opinion, are out to enslave you!

Check back for more blogs on the movie “Maxed Out” and more blogs on the history and creation of Bankruptcy as a means of escaping debt slavery.  Remember that forgiving indebtedness has been around since at least Old Testament biblical times.

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.