Debt

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.

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.

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.

Back To Basics Education Series: Reaffirmation and Bankruptcy

by Jack Morrison on September 23, 2011

This is the third week in our special “Back to Basics” education series in honor of back to school. Understanding the four basic topics of bankruptcy covered in this series is important. As a Worcester bankruptcy attorney, these critical concepts are important to help my clients understand their financial situation and make decisions about moving forward. The topics are:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation
  4. Life After Bankruptcy

Now let’s explore our next topic: Massachusetts bankruptcy and reaffirmation. 

Massachusetts Bankruptcy and Reaffirmation
When you file for bankruptcy and receive a discharge, it means that you’re not legally responsible to pay the debt listed in your petition. The discharge in Bankruptcy gives you a fresh start financially.

A Reaffirmation is a legal concept that re-establishes your obligation to pay, even after you file Bankruptcy and receive your discharge.

Let’s use an example to explain this.

In a Ch 7 bankruptcy process, if you have a car loan and can’t make your car payments, you have 2 choices: either you get current with your car payments, or you surrender the car. In either case, under a Chapter 7, you have no legal obligation to pay the debt. You can surrender the car and don’t have to worry about a deficiency ( a deficiency is when the auto loan company repossess your car, sells it, and sues you for any outstanding loan balance). IF YOU WANT TO KEEP YOUR CAR, YOU HAVE TO MAKE TIMELY PAYMENTS.  Otherwise, the auto loan company can ask the Bankruptcy Court for relief from Bankruptcy Court and repossess the car.

The reaffirmation is an agreement between you and your creditor that legally obligates you to repay the loan…even after you filed Bankruptcy. The creditor can’t force you to sign the reaffirmation agreement.   If you have an attorney representing you, your attorney must sign as well. The Bankruptcy Court has to approve all reaffirmation agreements.

I NEVER have a client sign a reaffirmation agreement.  It’s not in their best interest to do so. I always tell my clients, “if you want to keep your car, keep making regular timely monthly auto loan payments.”

Next week, stay tuned as we discuss life after bankruptcy.

Do you have questions about your financial 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.

This Monday, on the 4th of July, we’ll celebrate the liberation of our great country from unwanted oppressive rule. Today, we can take away a valuable lesson from those American heroes who led the way long ago: be courageous enough to seek financial independence. Liberate yourself in order to get a fresh start. 

Did you ever imagine you’d be in this situation? You’re entrenched in the worst financial crisis you’ve ever faced in your life. Your unemployment is about to run out…the bank is threatening to foreclose…and you can’t scrape together enough money to move out and start fresh. BUT—there is a way to recover. This year, commit to focusing your efforts on financial independence. 

To establish a financial recovery strategy, you have to assess where you are and determine two things: 1) your income and 2) your expenses. If you currently have no income, it’s easy to do the math. But, you are also in a very challenging predicament. Get creative to figure out how you can get some income. Find a side job, start a business, or borrow money. In fact, about 565,000 people started businesses each month in 2010 throughout the U.S. 

Once you’ve established some income, your next step is to determine your expenses. There are two types: those expenses you can control and those you can’t. You can control most discretionary spending choices for food, clothing, transportation and entertainment. Most people in financial troubles are good at controlling their own spending. 

The more difficult expenses are those they have no control over, such as fixed expenses or challenges controlling their spouse and children’s spending. Often, family members may not know about any money issues. This is especially true when it comes to children.  When you try to do better for your children than you had for yourself, you end up skimping on your own needs in order to maintain the lifestyle your children are accustomed to. But controlling this is one step in your overall progression to eliminating debt. 

Make 2011 the year you free yourself. If you’ve come to grips with the fact that financial matters are getting worse, not better, than sit down with someone knowledgeable in financial matters. I am a Worcester bankruptcy attorney and assisst clients with these matters every day. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form.

When you’re struggling to pay your bills on a consistent basis, there’s a lot on your mind. You’re beginning to think that you need to look into filing for bankruptcy. Although this is not an easy decision, it’s a decision that has worked for thousands of Americans to help them get back on their feet financially. One of the factors about bankruptcy that you’ll want to consider will involve your assets. That’s why it’s critical you understand the difference between secured debt and unsecured debt. 

In bankruptcy, you must classify your debts as “secured” or “unsecured.” In simple terms, here is the difference: 

  • Secured debt is debt that’s guaranteed by an asset. This asset can be a car loan or a mortgage. Secured debt is also known as “collateral debt,” because your collateral is tied to it. If you don’t make your payments, the bank will take the asset back through foreclosure or repossession. When you file for bankruptcy, the choice is yours: you can either stop paying and allow the creditor to take back the asset or you can continue making payments.
  • Unsecured debts are treated very differently than secured debts. In bankruptcy, unsecured debts mean that the creditor cannot obtain any collateral or take back any assets. Unsecured means that there has been only a “promise” made…and filing for bankruptcy will erase that promise. Common examples of unsecured debt are credit cards, personal loans, payday loans and medical bills.

So if you decide to speak with a Worcester, MA bankruptcy attorney, he or she will ask you about your secured and unsecured debt, among other financial matters. That’s why it’s important you hire a trustworthy, understanding professional who understands Massachusetts bankruptcy law. 

Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. As a Massachusetts bankruptcy attorney in Worcester and Clinton, I advise clients every day on bankruptcy and financial strategy.

 

 

Once your Bankruptcy petition is filed, there are several documents that the Bankruptcy Trustee requires.  The documents are required to verify the information contained in your Bankruptcy petition and are required at least 10 days prior to the Section 341 creditors meeting.  Your Worcester bankruptcy lawyer will forward the documents to the trustee who will preside over your bankruptcy case.

Some of these documents include a copy of your house deed, mortgage, house market analysis, homestead, auto loans, property insurance, etc. In addition, the Bankruptcy Trustee will also be looking for federal tax returns for the current year and two years back, and pay stubs for the last two months prior to filing.

One important, behind the scenes, aspect of filing Bankruptcy is the automatic stay.  The automatic stay prevents creditors from contacting you to collect money.   The day you file Bankruptcy and a docket number is obtained, the automatic stay takes effect. Creditors are not permitted to contact you…so long as the creditors know you filed Bankruptcy. Any direct contact with you, is illegal, unless you filed pro se (without an attorney).   All contact goes through your Worcester Bankruptcy Lawyer.

The next step in the Bankruptcy process is the Section 341 creditors meeting.   This meeting occurs usually 30-45 days after you file Bankruptcy.   Next week we will discuss what happens at this meeting.

Looking for information on your financial situation sooner?  As a Worcester Bankruptcy Lawyer, I advise clients every day on Bankruptcy and financial strategy.  Call my office, the Law Office of Jack Morrison, today 508.852.7800 or reach out via our contact form.

Last month, we told you about our free 21-point checklist, “Are You in Financial Trouble? And What You Can Do to Get Back on Track.” 

This online checklist of 21 “yes” or “no” questions takes less than 5 minutes to complete. So what’s holding you back from filling it out?  Most Americans in debt don’t like to talk about money. But you should know you’re not alone. And, if things aren’t going to get better, you need to do something about it now before you have another sleepless night or frustrating day avoiding calls from creditors. 

If you’re a Massachusetts resident who is in financial difficulty, you have nothing to lose. Here’s some information to get you started:

5 Sample Questions from the Checklist:

  • Do you owe more money on your first mortgage than the house is worth? Yes or No
  • Have you overdrawn your checking account more than 2 times in the last year? Yes or No
  • Do you carry a balance of $10,000 or more on your credit cards each month? Yes or No
  • Do you know the balance in your checkbook within $200 to $300 dollars? Yes or No
  • Have you thought about cashing in your retirement to pay your bills? Yes or No

5 Important Things You Need to Know

  1. Who am I? My name is Jack Morrison and I am a licensed bankruptcy attorney in Massachusetts. I have helped hundreds of clients stop the endless cycle of debt and financial struggles.
  2. Who should take this? Massachusetts residents who are unsure if they’re financially on the edge or near the edge.
  3. Why should I take this? The questions are very easy – you only have to answer “yes” or “no.” After you finish the checklist, you’ll get a confidential, customized response sent back to you within 24 hours. It takes less than 5 minutes to fill out.
  4. How do I get started? Click on this website link that will take you directly to the bankruptcy checklist: http://helpineedtofilebankruptcy.com/are-you-in-financial-trouble-21-point-checklist/.
  5. How do I find out the results? Once you finish, you’ll get a confidential, customized response emailed back within 24 hours.   

There’s nothing to be ashamed of—don’t be too proud to get the help you need. Click here to get to the Checklist. If you have any questions, don’t hesitate to reach out. Here’s what a few of my bankruptcy clients have to say about our services: 

“Jack is very sympathetic and understanding of our situation. He listens well and offers advise as though he was impacted as well.”

“Jack was compassionate, friendly, and non-judgmental. I was completely comfortable with him because of his honesty about a bad situation, yet he always gave me hope.” 

“You (Jack Morrison) were very helpful, but in no way condescending. (we had some less than great experiences with other lawyers).” 

“Attorney Morrison made me feel better about myself. I was embarrassed about my situation. Jack gave me peace.”

 Call my office, the Law Office of Jack Morrison, a Worcester Bankruptcy Lawyer, today at 508.852.7800 or reach out via our contact form.

Hunting for your homestead? Unfortunately, it’s not as easy—or fun—as hunting for candy-filled eggs. The older we get, we don’t have as much time to spend looking for hidden objects.  But this Easter, The Law Office of Jack Morrison is helping you get a JUMP on locating your homestead information. 

With a homestead, either you have it or you don’t. In light of the new 2011 Massachusetts Homestead Law changes, you might be wondering whether: 

  1. You have a homestead
  2. Your homestead is valid 

As we explained in last week’s blog post, a homestead is a law that gives protection from creditors (provided you own the home and it’s your primary residence). 

For our Easter promotion, we’ll do three things: 

  1. Check to see if a homestead was ever recorded and filed on your property
  2. Check to see if your homestead needs to be updated
  3. And, as a bonus, we’ll give you a copy of what we find 

This egg-cellent promotion is yours FREE until April 27, 2011. 

If you don’t have a homestead and don’t know how to get one filed, we can help you with that. Or, if you’re interested in filing for the full $500,000 equity exemption, we can help you with that too. 

To get started, call the Law Office of Jack Morrison today at 508-852-7800. Or, email us here.

For more information on Jack Morrison, a Worcester, MA Bankruptcy Lawyer, hop over to http://helpineedtofilebankruptcy.com/.  

As a resident of Massachusetts, you may or may not know about the new homestead exemption act that went into effect in March 2011. On a basic level, the law grants homeowners expanded protection. Here are three more important facts about the law you should know: 

  1. With the new Massachusetts homestead law changes, you get an automatic $125,000 equity exemption. To qualify for this, you must own a home and live in it as your primary residence. The new homestead law provides you with the automatic $125,000 without having to record anything. However, you can still get an enhanced exemption—$500,000—if you record the document.
  2. The biggest thing is that before the law changed, you had to file a document to get the $125,000 protection. Now, it’s automatic just by owning a home and deeming it as your primary residence. You’re no longer required to “record” your document.
  3. Want to know how to calculate your home equity? Take what your house is worth (market value) and subtract your mortgage. That difference is your equity. With the new homestead law, you’re protected up to $125,000 of that.  

As of March 16, 2011, the homestead law changes went into effect and clarified ambiguities that existed before about filing a document with the registry of deeds.

If you’re interested in filing for the full $500,000 equity exemption, call the Law Office of Jack Morrison today at 508-852-7800. Even if you just want more information on the Massachusetts Homestead Law, I can help you get started.