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.

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.

Chapter 7 or Chapter 13- Which Bankruptcy Chapter Do I Need?

Clients are often confused about chapter 7 and chapter 13  bankruptcies.  (There is also a chapter 12 for farmers and chapter 11 for businesses).   A chapter 7 is the one where you get a discharge of your debts 90 days after you file.  The 7 has a very short timeline and clients like it because of the simplicity and speed at which it is processed.  The debtor (the person who files bankruptcy) attends the 341 hearing (meeting of creditors) 30 days after he or she files bankruptcy.  The creditors rarely show up at the 341 hearing so it’s just you, the attorney, and the Trustee who are in attendance.  The bankruptcy discharge is then usually granted another 60 days later.

The debtor must list all of their assets and debts in their bankruptcy schedules when they file.  The debtor must list their secured creditors separately from the unsecured creditors and the debtor must list whether they intend to keep their secured assets or surrender them.  The debtor must also list their income, expenses, all of their personal property, a statement of financial affairs, and do the means test.  There are also a few other schedules that must be completed but these are the main ones.  (Check my previous blog for an explanation of the means test).  When the schedules are completed then this information is filed with the Bankruptcy Court.

The 7 is most popular but there is also a chapter 13 where you pay back all or part of your debts over a period of 3 to 5 years.  This chapter is useful when you make too much money for a Chapter 7, or if you need to protect assets from trustee, or if you need to make up back mortgage payments and pay them out over the next 3 to 5 years.

Also you can strip off a second mortgage in a chapter 13 if it is totally unsecured.  A totally unsecured second mortgage is one where the value of the house is less than the value of the first mortgage leaving the second with no equity to attach to.  Stripping it off means that you get rid of it, you don’t pay it, and it goes away.

“Cramdown” is also useful in a 13 where you reduce the value of the loan on an asset in the bankruptcy to the value of the asset.  So if you have a car worth $10,000 but the loan value (the amount you owe) is $20,000, you would only have to pay back the $10,000 (over 3 to 5 years) to keep the car in the bankruptcy as the loan would be “crammed down” to $10,000.  The remaining $10,000 on the loan would go away and the finance company would never be able to collect it from you.  You must continue your payments for the full 3 to 5 years to get your discharge at the end of the chapter 13.  This is hard for many people and they sometimes drop out of these plans and then their debt returns.

So a 7 with the possibility of getting rid of all your credit card, medical, personal loan debt in 90 days is still the most popular form of bankruptcy by far and most people choose this one.  13s are rarer but available and advisable under the right circumstances.