Bankruptcy—It Affects Famous People, Too

by Jack Morrison on July 17, 2013

Money mis-management is a chronic issue that affects people of every age, race and social status. Debt can happen to anyone and doesn’t discriminate between low income, middle income and high income individuals. Just think of all the celebrities and athletes you hear about in the news that have had to file for bankruptcy.

If you’re thinking of filing for bankruptcy in Massachusetts, you won’t be the first to do so and you certainly won’t be the last. Your current financial problems won’t ruin your life forever. Hopefully you’ll feel a little bit better about your future when we share this next fact.

You’d probably never guess that these well-known figures have undergone bankruptcy and bounced back in a big way: P.T Barnum, Walt Disney Henry Ford, Larry King. These individuals had filed for bankruptcy but recovered so that it was only a blip on the radar of their life.

And what about athletes who receive huge signing bonuses worth millions of dollars? How in the world do they lose so much money so quickly? Just check out these statistics from SportsIllustrated.CNN.com:

• By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.

• Within five years of retirement, an estimated 60% of former NBA players are broke.

Wouldn’t you think someone making all that money could control it? Unfortunately, too often the wealthy don’t understand debt, income and credit. Just like the rest of us.

There are two primary misconceptions that individuals in debt have about money. First, they think they’re alone. As the economy took a nosedive during the recession, jobs were lost, hours were cut, unemployment benefits stopped and bills kept piling up. This affected millions of Americans across the country. You’re not alone. Second, they think that filing for bankruptcy signifies the end. In fact, many people who have filed will tell you that it’s actually a new beginning. It gives them a chance to start over, make changes and learn how to effectively manage their finances.

If you want to sit down and talk with a knowledgeable professional about your situation (who won’t judge you), then you might want to sit down with a Worcester bankruptcy lawyer for a free consultation. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

Filing for bankruptcy: it’s a raw, emotional, devastating personal decision. I can attest to this personally as I have clients who come to me daily in bad shape. Bankruptcy involves real people with real problems. Financial problems that, regardless of how they happened, are not going away.

To humanize bankruptcy and shed some real light on what someone goes through, I’d like to share with you a story of a real person, a Chapter 7 bankruptcy client named Alan (of course, I changed his name to protect privacy).

Before Filing for Chapter 7 in Massachusetts…
Alan is a 45-year  old single man who lives here locally in Worcester County. When Alan came to me, he was emotionally drained. He was “throwing in the towel.”  Ever since his work hours were cut, debt started mounting. While he was barely living month to month before, now he was deep in the red. He had been dealing with harassing phone calls from collection companies at all hours of the day. Along with not being able to pay his credit card bills in four months (with their current incredibly high interest rates), he was about to forego making car payments too.

Alan’s debt was around $25,000. Although he considered going to a debt consolidation company, he was distrustful and had heard the overall experience was not positive. He needed more than a temporary fix. And, he didn’t want to lose his car which he needed to get to work.

Finally, Alan decided to search around for a bankruptcy attorney in Worcester County. He called, and we set up a meeting to discuss his finances and lay out his options.

What Our Bankruptcy Explorations Entailed…
A common misconception is that when you approach a bankruptcy lawyer, you have to be ready to file for bankruptcy immediately. Not so. I always talk to the client first to find out their goals, get an idea of their debt, their assets, and then we look at options.

Alan admitted that it took him a long time to take this step and look for a lawyer because he was hoping for a miracle. Unfortunately, that miracle never materialized, so he was ready to get a plan to eliminate his debt.

This is exactly what Alan and I did. We discussed several things, two of which included:

  1. The pros and cons of calling his credit card companies to see if they would work out a payment plan with him. However, Alan decided to forego this option once I explained that most companies won’t reduce the amount you owe unless you’re 3-4 months behind. And, it’s really only worth it if you can pay a large sum of money up front. Unfortunately, Alan didn’t have access to cash.
  2. The pros and cons of taking money from his 401k. I rarely, rarely advise pulling from retirement accounts. Unless Alan was getting threatened by collection agencies with bodily harm, which thankfully he wasn’t. (which, of course, is illegal) So Alan decided to hold on to what he had worked so hard to build up, as it is his legal right and this money is protected.

Armed with information and a set of options (with repercussions) clearly presented to him, Alan felt empowered for the first time in a long time. Alan decided to wipe the slate clean; although it was tough decision, he decided to go ahead and file.

Here’s what happened to Alan after filing Chapter 7 Bankruptcy:
Alan filed for Chapter 7, went through the process, and 4 months later received his discharge. The discharge legally wiped away his $25,000 in credit card debt. And, he had a clear plan for making car payments, so he gets to keep his car.

The constant worry of how to get money to pay the credit card debt was gone. The phone calls stopped. Alan told me, a few months later, that this was a total relief. He was free again. And he vowed never to get in the same position again. He’s now living his “new normal”: paying cash for purchases, building back up his credit, and putting a small amount of savings aside every month. Alan’s quote to me was, “If I had known how easy this was, I would have filed a lot sooner.”

Does Alan’s situation sound a lot like yours?

My name is Jack Morrison and I am a Worcester bankruptcy lawyer. If you want to explore your options, call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. There’s no obligation and the call is free. If bankruptcy is not the best option for you, I’ll let you know straightaway. Thank you.

When you’re experiencing debt or financial difficulty, inevitably the idea of hiring a debt consolidation company has crossed your mind. Because so many people come to me asking my opinion, I wanted to share a little bit more about them here.

Basically, debt consolidation companies will negotiate with your creditors to arrive at a payment plan or settlement. How most are structured is that you sit down with them, explain your financial picture— home payment, mortgage payment, car payment, etc.—and based upon your income, they come out with a feasibility plan. It should be something you can realistically pay over a period of time. In most cases, what they do is set up a monthly payment plan.

Debt consolidation amasses the cash you can pay; once they’ve accumulated 60-70%, they go out to your creditors to see if they’ll agree to a lower payment. For example, if you owe $2,000, they might settle for $1500.

It’s important to note that while this process is going on, credit card and collection companies can contact you and they can still take you to court in order to obtain that debt. So hiring a debt consolidation company is only practical IF there’s a realistic timeframe of paying back all your debt, such as 3-5 years. If it will take any longer, you should seriously consider alternative methods.

To recap, debt consolidation companies contact your credit card companies, set up a monthly payment schedule and in turn pay your credit cards.

Advantage: Unfortunately, some people are too attached and emotional to effectively negotiate with their credit card company. Hiring a debt consolidation company is a great way to have someone else step in and lend a hand.

Disadvantage: Most people have 5-7 credit cards. Debt collectors only take 3-4 credit cards. So, the debtor still has to deal with the other creditors on their own and will still be left unable to pay.

My take? Many times, hiring a debt consolidation company is like putting a Band-Aid over a gaping wound. Let me give you a reality check and a very quick way to know whether or not you should hire a debt consolidation company: if you can’t pay your debt back within 5 years, who are you kidding?

Do you want to talk out your situation? Then sit down with a knowledgeable, understanding professional. I am a Worcester bankruptcy lawyer and encourage you to call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. There’s no obligation and the call is free. If bankruptcy is not the best option for you, I’ll let you know straightaway. Thank you.

How Often Can You File for Bankruptcy in Massachusetts?

by Jack Morrison on November 17, 2011

Making the decision to file for bankruptcy is difficult. But the important takeaway after you do so and receive the discharge is to alter spending habits and make smart financial decisions so you don’t end up back on the same path. Unfortunately, many people don’t learn, and they end up having to file for bankruptcy two or three times. Some, even more than that.

New laws are in place that dictate filing for bankruptcy (and receiving a discharge) is limited to 8 years for Chapter 7 bankruptcy in Massachusetts and every 4 years for a Chapter 13 bankruptcy in Massachusetts.

Many people might still file—they just won’t get the discharge. That means they don’t get the protection of the automatic stay, and creditors can still move forward to do anything they’re legally entitled to do. 

If you’ve never filed before and you’re behind on your mortgage, filing bankruptcy will stop your foreclosure. However, depending on whether you file Chapter 7 or Chapter 13, you still have to make your monthly payment if you want to keep your house. Many people use this as a short-term strategy just to delay the foreclosure initially.

The Significance of Filing for Bankruptcy
Most people who file for bankruptcy are truly in need. And the benefit of bankruptcy is that it gives you a fresh start. To truly benefit from receiving a bankruptcy discharge though, you must not repeat the same habits that have landed you in the situation you’re in. In most cases, you won’t be that person. But sadly, there are others who will come back and file 2-3 times.

As a Worcester bankruptcy attorney, I make it a point to educate my clients about how to bounce back and never again have to make repeat filing. For tips and information on life after bankruptcy in Massachusetts, read this article. 

Do you want to talk out your situation? Then sit down with a knowledgeable, understanding professional. I am a Worcester bankruptcy lawyer and encourage you to call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. There’s no obligation and the call is free. If bankruptcy is not the best option for you, I’ll let you know straightaway. Thank you.

So you’ve made the decision to file for bankruptcy. Although it’s not an easy choice to make, I commend you for putting yourself on the right path to resolving your financial life with a fresh start. 

Now that you’ve made the decision to get serious and start the process, I want to warn you there could be some speed bumps ahead. As a Worcester bankruptcy lawyer, I’m in the position where I often see clients make many avoidable mistakes that could have saved them additional heartache and money.

That’s why I’m putting on a FREE webinar, “The 5 Biggest Mistakes Homeowners, Struggling With Debt, Make BEFORE Considering Bankruptcy As A Viable Option.” I’ll present this topic several times throughout the month of November:

  • Tuesday, November 15, 2011 at 7:00pm EST
  • Tuesday, November 29, 2011 at 7:00pm EST
  • Tuesday, November 29, 2011 at 7:00pm EST

Here are the call-in instructions: dial (712) 775-7000 (then enter access code 906610#)

Topics Covered During the Massachusetts Bankruptcy Webinar
During the webinar, I’ll provide you with information on the five following important topics:

  1. Why you can’t protect assets transferred into another person’s name (unless you do one thing which I’ll explain)
  2. Can you file bankruptcy in Massachusetts after paying back a family member money you borrowed from them?
  3. What the EASIEST way to protect your home up to $500,000 in equity is
  4. Where you should NEVER withdraw money from to pay your debts
  5. What protections you have to keep your assets, even when you file Bankruptcy

If for some reason you can’t make it live to the event, email me for a copy of the audio and I’ll gladly send it along for free—no strings attached. For more information, visit our Massachusetts bankruptcy webinar page.

If you want a more customized consultation without spending thousands of dollars, I offer an Options Meeting for $297. It’s basically a bankruptcy package that includes a meeting where I do a complete analysis of your finances and debt, review viable options with you and talk about the impact of each on your present and future. You leave the meeting with a clear roadmap—and a sense of empowerment that you do have a choice with what happens to your future. With a 100% money-back guarantee, you have nothing to lose.

And do you want even MORE information? Peruse our Massachusetts and Worcester bankruptcy blog as we have dozens and dozens of articles that will help you learn about debt and bankruptcy.

2012 is almost upon us. Don’t suffer wasting another year of your life avoiding creditors calls and unsuccessfully trying to pay small amounts while interest builds on top of enormous credit card debt.   

Sit down with knowledgeable, understanding professional. I am a Worcester bankruptcy lawyer and encourage you to call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

 

The Seasonal Changes of Your Personal Finances

by Jack Morrison on November 3, 2011

The only constant is change. Have you ever heard this popular phrase? One change that falls into this category is the changing of the seasons, which we are experiencing now that we’re in the midst of the fall season.

The seasons change for a reason. This is nature’s way of cycling so that life ebbs and flows. Leaves drop in the fall, trees and plants lie dormant in the winter and then come spring everything makes a comeback.

This same cycle may occur with your finances. You must plan and prepare ahead for the tough times if your financial season isn’t always rosy and in bloom. For example, if you know that you get paid more in the summer and then income slows during the holiday season, it’s important to adjust your spending/saving ratio. Plan accordingly so that you don’t rely on the false security of credit card debt. You must make provisions to protect your savings and reduce your expenses.

This may seem like common sense, but not enough people plan ahead. Most people don’t ever truly solve the problem of experiencing recurring financial ups and downs. They just limp along or hibernate until the flow comes back again. But unexpected things come up, something every homeowner is intimately familiar with. If you need help managing your financials, it’s never too late to learn.

Two resources that will be of benefit to you include:

Take a cue from Mother Nature. Prepare yourself and your family for any down cycles you have historically experienced. Make the necessary preparations to sustain you for the long run.

Are you interested in talking to a knowledgeable, understanding professional about your finances? Then you might want to sit down with a Worcester bankruptcy attorney for a free consultation. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

Money: Why Is It So Difficult to Talk About?

by Jack Morrison on November 2, 2011

The illusion of money is so alluring. Just look at the magazine rack and you’ll see covers of attractive, celebrities, athletes and icons. You see people every day who appear successful and well-off. They have the trendiest clothes, the biggest house, the nicest cars…but this doesn’t necessarily mean that they’re financially better off.

Although it might seem like your neighbor down the street (who owns the nicest house in the neighborhood) has it all, he may be up to his ears in debt and thinking, “Can someone please help me?” 

In reality, the perception of money is a façade. The fact that you have money doesn’t mean you’re good with it. Like any learned skill set, you must control what you have.

Unfortunately, our society’s “must have it now” obsession means that people want instant gratification. Even if they can’t afford something, they buy it anyway. This gains the immediate satisfaction they’re looking for. In their quest to get something instantaneously, they ignore the repercussions. This is an important topic that you, your spouse and your kids should discuss together.

In fact, experts say that couples who fight about finances once per week are over 30% more likely to get divorced. This NY Times blog post, Money Fights Predicts Divorce Rates, says that money disagreements are the biggest predictors of divorce, over chores, in-laws, spending time together and sex.

The bottom line is, you need to come to a consensus on money and work together toward a shared philosophy. If you need a professional to act as an intermediary, then reach out to one today. Find a counselor, therapist, or Worcester Bankruptcy Attorney.

Go On a Money Diet
When your eating habits are out of control, you go on a diet, right? Well, the same concept works for your financial overspending problems. Put yourself on a money diet. Tighten your belt to reign in your expenses.

Recognizing that you have a problem is the first step. You must be conscious, and meticulously aware as to where each dollar is being spent.

Are you interested in talking to a knowledgeable, understanding professional about your finances? Then you might want to sit down with a Worcester bankruptcy lawyer for a free consultation. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

Time to Make Changes

by Jack Morrison on November 2, 2011

October is a time for change. The leaves change colors, the weather cools, and the busy holiday season starts to approach.

What changes have you made in your personal life? How about your financial life? Simple changes can make huge impacts if you make them consistently. If you sit down to actually track where your money is going, I bet you’d be surprised at how small purchases here and there add up.

When people come into my Worcester, MA bankruptcy legal practice, I always first recommend that they determine two things: their income and expenses. It’s easy to determine income; you look at your paystub (minus taxes and benefits). The challenge here is determining your expenses.

Make This Change Today: Determine Your Expenses
Most people are not 100% sure of where their money goes. And if you have a family, there is an additional layer as your family spends money too. If you have a child, chances are you’re paying quite a bit for clothes, activities, sports and entertainment. But when finances are tight, parents are guilted into continuing to pay for these items knowing that their mortgage payment might be late or their credit card statement might not get paid that month.

My task to you: track every dime that leaves your pocket for a minimum of 2-4 weeks. Take every penny spent by everyone in your family—that morning cup of coffee, afternoon snack, quick drink—and write it all down. Once you get an idea of where your money is going, you can figure out any potential leaks that are causing your hard earned money to flood out. You may find that you can save $20-30+ a week to either 1) put in savings or 2) put additional money towards debt. This money adds up. Over a year that’s $1,000. Over time this makes a big difference.

The moral of the story? Control your spending and keep track of where your money is going. 

Are you interested in talking to a knowledgeable, understanding professional about your situation? Then you might want to sit down with a Worcester bankruptcy lawyer for a free consultation. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

 

If you’re severely in debt with no hope of resolving your finances in the foreseeable future, you’re stuck in a very real hell. But like most people, you’d rather experience a root canal without morphine than file for bankruptcy. Why is that?

The social stigma and reputation of the “b” word: bankruptcy.

No one takes bankruptcy lightly. But chances are, your situation is not going to get resolved. And probably you’ve already beat yourself up enough. Bankruptcy could be just the salvation you need.

The truth is, how can bankruptcy have such an unpleasant reputation if it provides people with an opportunity to start over financially? Let’s take a look at what bankruptcy can really do for the average hard-working American who has come upon some really bad luck. Bankruptcy eliminates your responsibilities to pay the debt that’s owed. Credit cards, deficiencies on mortgages, wage garnishments, etc. can be erased by filing. Other than paying your debt in full, bankruptcy is the most efficient, permanent method of resolving outstanding financial debt.

But negative portrayals in the media and misinformation leads people to think the worst. Bankruptcy’s bad reputation comes from society’s (and possibly friends and family) suggestion that people who file for bankruptcy are taking advantage of the system. There is a misperception that people who file for bankruptcy are outcasts, that they lived a good life and don’t have to pay for that advantage. Those who are financially solvent just can’t put themselves in your shoes.

In reality, the majority of us who file for bankruptcy are not bad people trying to evade the system. You never once imagined you would be in this situation. But if you’ve fallen on financially troubling times, you are not alone.

Are you interested in talking to someone trustworthy and understanding about your situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

Education Back to Basics: Life After Bankruptcy

by Jack Morrison on September 30, 2011

As September comes to an end, we’re wrapping up our “Back to Basics” education series by discussing a very important topic: Life After Bankruptcy. In case you missed any of our other topics on understanding the foundation of bankruptcy, you can catch them here:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation

Now let’s explore our next topic. 

Life After Bankruptcy in Massachusetts
If you’re deep in debt and haven’t yet gone through a bankruptcy, it’s difficult to imagine coming out on the other side intact. But not only do you survive bankruptcy, you’ll feel a huge weight lift off your shoulders. Starting on the road to debt recovery is like being underwater for too long and then coming up to the surface to take that much-needed gulp of fresh air. 

Contrary to popular belief, bankruptcy is not an end, but a beginning. Most of the time when clients come to me, as a Worcester bankruptcy lawyer, they’re experiencing overwhelming financial debt. Their major concerns are stopping the harassing phone calls, relieving stress and making the decision to proactively move on with their lives. Trust me: your life doesn’t have to stay in the hell it’s in now.

The primary thing bankruptcy does is permanently eliminate your responsibility to pay the debt listed in your bankruptcy petition. We call that a fresh start, meaning that hopefully after completing a bankruptcy, you’re able to afford the little expense you need in order to survive: food, shelter and clothing.

The best way to look at completing your bankruptcy is to say you’re starting your financial life over again. 

Think of yourself as being 18 again. What would you do to establish your credit? There are a number of things you can do after bankruptcy. Here’s one proven method:

 Establish and obtain a secured loan. Most credit unions will allow a $500 deposit into a credit union under a passbook savings account. Use this as collateral and ask them for a $500 loan. The passbook acts as collateral for the $500.00 loan. Most credit unions will give you the loan, even though you’ve just filed Bankruptcy and received your discharge. When you get the $500 cash, open up a checking account and deposit the money into that account. Set up the new checking account to have automatic monthly payments on the new loan. It’s all automated.

What this does is re-establish your credit. Every month that you pay on time, the credit union sends a notice to credit bureaus stating that payments were made timely. When paid in full, you get the $500 back, and you’ve improved your credit. 

For a list of additional credit-improving methods, click here.

Are you interested in resolving debt and talking to someone about your situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.