Monday, June 6th, 2011
Yesterday, my son graduated from high school. His class selected a math/environmental sciences teacher named Nicole Brite to deliver the faculty address to the senior class. Ms. Brite delivered a spectacular address which was meaningful, witty and thoughtful (and she received a well deserved standing ovation from both the students and the audience).
In one part of her speech, Ms. Brite turned to the graduates and said "now I am going to offer you some words of advice that I wish someone had said to me when I was leaving high school." One of the points she made I think is applicable to everyone, not just high school students.
"Stay away from credit cards," said Ms. Brite. "When you get to college, you will see tents set up by the credit card companies. They will offer you frisbees and t-shirts and free food to entice you to sign up for a credit card. They'll tell you that a credit card will help you build up your credit and you can use it only for emergencies. Don't believe it. You will be tempted to decide that an emergency takes the form of a pizza at 2 in the morning, or putting your entire fraternity's dinner on your card because no one has cash. Credit cards will mess you up."
I hope that each and every one of the graduates in my son's class heard these words of wisdom and I wish this advice could be included in the "welcome to school" packets given to incoming freshman.
Over the years I see dozens of young adults in their late 20's and early 30's who are still dealing with thousands of dollars of college years credit card debt and the associated damaged credit ratings. It is so easy to find oneself behind the proverbial eight ball, and digging out from a credit hole is a lot more difficult than avoiding the problem in the first place.
If your son or daughter recently graduated from high school, congratulations on an accomplishment and a milestone. Let your graduate know that while college isn't exactly the real world, they now have assumed the capacity to get themselves in adult level financial trouble. As uninteresting as household budgeting ten years hence may seem, they most definitely do not want their college aged mistakes to lead them to a bankruptcy lawyer's office in the future.
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Tuesday, March 23rd, 2010
Jason Roberts asked: This year President Bush signed a bill to change the bankruptcy law. This will go into effect this October of 2005. The new bankruptcy law will make it more difficult to file for bankruptcy. This may be bad news to individuals who are drowning in debt. On the other hand it is good news to business and individuals that work very hard to maintain good credit and not suffer from profit loss.
When the new bankruptcy law goes into effect it will be harder for anyone to file for chapter 7 and chapter 11 bankruptcy. Filing for chapter 13 bankruptcy will be your most likely option.
What is Chapter 13 bankruptcy? It is an option that is given to those who have any kind of steady income. Basically, anyone who has a job. It is a payment plan and not a way to wipe a way your debt. Which means the days of wiping the slate clean are over. However Chapter 13 does protect your assets. The court devises a payment plan in which you are to pay to a trustee that is appointed by the court. Usually the payments are to be paid off in three years time. There are some exceptions, but that is up to the courts to decide.
So now that the bankruptcy law is changing what are some things people should do to avoid debt?
One very important thing is to never live outside your own means. If you have credit cards don’t use them as if you will have the money every month to pay the minimum balance. Be prepared for the unexpected such as a loss of your job or loss of any other source of income. This is where some people get into trouble. Protect yourself and your assets by being insured. Some people get into debt due to unexpected medical expenses or property damage. When you don’t have a way to help cover these expenses you will find your self in some kind of debt.
Try and keep some money off to the side in case some kind of unplanned expense should arise. Have some kind of back up plan to avoid the need for bankruptcy.
One of the reasons for the bankruptcy law change is because of over use of the system. There are actually some people who pre plan filing for bankruptcy as they abuse their credit cards. It sounds hard to believe, but it is true.
One may ask how this is fair to the people who didn’t do anything wrong and still landed them self in debt? Unfortunately changes in the law aren’t always fair to those who did nothing wrong. As the old saying goes, ” It only takes one bad apple to spoil the bunch”.
The only thing we can do now is become more responsible about our finances. Take more steps to avoid the need to ever file for bankruptcy.
Bankruptcy Questions
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Friday, February 5th, 2010
There are many reasons that bankruptcy filing rates are so high. Clearly an unexpected job loss or reduction in earnings can lead many honest, hardworking people into a bankruptcy lawyer's office. When a job loss is coupled with a divorce, I think that the likelihood of bankruptcy by husband or wife goes up exponentially.
I recently read a column written by attorney John Mayoue, a divorce lawyer here in Atlanta who is known for his representation of celebrities and other high profile clients. John notes that in the domestic relations legal community, Atlanta is known as the "divorce belt." In the bankruptcy lawyer community, Atlanta is known for having one of the highest bankruptcy filing rates per capita. I do not think that this is a coincidence.
Just as an ethical bankruptcy lawyer will advise you to search for alternatives to Chapter 7 or Chapter 13, a thoughtful family law attorney will advise you to search for alternatives to divorce. Bankruptcy or divorce may be inevitable, but when you seek legal counsel, look for a lawyer who does not offer "one size fits all" solutions and recommends alternatives – this would be a good sign that you are talking with a lawyer who has your best interests at heart.
John was gracious enough to give me permission to reprint his thoughtful article about why couples struggling in their marriages ought to consider alternatives to divorce. I recommend that you take his message to heart.
Divorce Lawyer John Mayoue Offers Advice to Couples Contemplating Divorce
The divorce rates in the United States are some of the highest in the world. Increased financial pressure brought on by the current economy is fueling the fire for marriages already in jeopardy, and the rapidly increasing number of homeforeclosures further demonstrates the severe consequences these pressures can produce.
According to Atlanta, Georgia based divorce attorney John C. Mayoue, who has been counseling couples through divorce cases for more than thirty years, the approaching holiday season will cause these numbers to spike further and will also be a busy time for lawyers specializing in divorce cases, as the holiday season often proves to be a breaking point for marriages in crisis.
“During the holidays, people’s pent-up thoughts about relationships and careers and where they are with life become intensified,” Mayoue says. “In December, for example, we have the highest number of suicides, divorce filings and bankruptcies of any month. It's just a very difficult time for people.”
Although our society makes divorce seem to be an easy and acceptable way out for couples who aren’t quite happy in their situation, Mayoue cautions couples not to be too hasty to start the divorce process. Divorces that make it to trial are painful and embarrassing, and the results are often not fair for both parties involved. If you are considering divorce, Mayoue suggest taking the following steps first.
1. Try to work out your differences
Ask yourself why you want a divorce. Are you just responding to life’s pressures? Are you looking for a way out of a stressful situation and not just your marriage? Or do you have legitimate concerns that are truly irreconcilable?
Ask yourself if this is your only option. Have you made every effort to communicate with your spouse and work things out together? Have you tried counseling or outside help?
More importantly, consider all of the consequences of divorce. Are there children involved? How will this affect them? Would the divorce be the best solution for everyone in the family or only the adults involved? Will the family be financially ruined by the process in the forms of home foreclosure, credit crises or worse?
Before you drag your family through a process that can make existing rifts even deeper and harder to overcome, make sure that you really want to go through with this life changing and emotionally taxing process.
2. If you can’t find a resolution, try to settle out of court
If at all possible, try to settle your case outside of court with the help of your attorneys. When you do take your case to trial, you lose control over important aspects of your case to the decision of the judge or jury, depending on your state. This can lead to painful custody rulings, alimony or settlement decisions and more.
Even if you feel like you are right in your claims, in a courtroom, your case is only as solid as the evidence you can produce. Judges tend to have biases and not all states will send divorce cases to a jury trial. Truth may not always win out, and oftentimes these proceedings become incredibly painful and embarrassing.
“I am always going to make every reasonable effort to get a case settled first,” Mayoue says, “because settlement is something that the parties can control. They can basically control things such as custody, visitation and the allocation of assets and debts. And the courtroom is a risky environment for anyone.”
3. Educate yourself before going to trial
Before you do anything, make sure to get educated. Use your attorney’s knowledge to understand the proceedings, possible outcomes and unexpected or painful events that you need to be prepared for.
“Divorce is hell for the vast majority of people,” Mayoue says. “People get angry, people get lost in the process of the courts and they lose everything. This can be avoided if they are calm and are educated about the process.”
Mayoue’s law practice is based in Atlanta, in the heart of the new “divorce belt,” a name which the South has recently earned by having the highest divorce rates in the country. Given the environment in which he operates, he says that his goals as a divorce attorney are to educate people about their options and the process and to help people who have thoroughly thought through their options and have decided divorce is the only answer for them.
“I really do think that we lawyers have an obligation to educate the public,” Mayoue says, “and it seems to me to be not very good consumerism to walk into a lawyer's office knowing absolutely nothing, before paying someone several hundred dollars. I've always found it peculiar that people do not get educated in a legal matter that affects 50-plus percent of all people who get married. Yet if you had an illness, you would certainly read up about it, if you had a business you were interested in getting involved in, you would certainly read about it.”
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