Misperceptions about Bankruptcy

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.

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.

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.

This week wraps up our Massachusetts bankruptcy foreclosure series. Did you catch our previous videos? If not, check out the links here:

Do I Qualify to File for Bankruptcy

Do I Have to Include My House and Car

Can I Keep My Credit Card When I File For Bankruptcy

Can I Keep My Car

YouTube Massachusetts Bankruptcy Video Series #5: What Can I Do To Keep My Home?

As a Worcester, MA bankruptcy attorney, I got the inspiration for this video from a common question that comes up from my clients: “If I’m behind on my mortgage and don’t qualify for a loan modification, what can I do to keep my home?”

 In this 1 minute and 40 second video, I’ll reveal the answer to this question and discuss the reasoning behind it.  We’ll also go over an example situation. Click below to watch now:

 

Thank you for joining us with our bankruptcy video series. Throughout September we’ll be featuring our special education series, “Back to Basics” and discussing Chapter 7, Chapter 13, Life After Bankruptcy, and more.

Do you have questions about your financial situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy attorney. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

 

It’s something every person considering with serious financial difficulties wants to know: what happens after you file for bankruptcy? 

Throughout the month of May, we are going to bring you a four-part series designed to educate you about the process of filing for bankruptcy. It’s not nearly as scary as you might think. In fact, you will breathe a huge sigh of relief when it’s over and wonder why it took you so long to make this decision. My clients tell me that one of the best parts of filing for bankruptcy is getting relief as all the creditors stop calling you. So for our May “What Happens After You File for Bankruptcy” education series, here’s what you can expect: 

Week 1: Behind the Scenes: Filing for Bankruptcy (Part 1)
Week 2: Behind the Scenes: Filing for Bankruptcy (Part 2)
Week 3: Behind the Scenes: What Happens at a Section 341 Creditors Meeting?
Week 4: Behind the Scenes :What Happens When You Receive the Discharge? 

Week 1: Filing For Bankruptcy (Part 1)
The Federal bankruptcy court requires that all attorneys file documents electronically in bankruptcy court. So when you sit down with your attorney and compile all the information, filing is as easy as pressing the “send” button. The information gets loaded from the attorney’s computer to the bankruptcy court’s computer. There’s no printing of papers or walking files down to the courthouse—it’s all done instantaneously and electronically. 

Why is this good for you? Because filing can be done 24/7, not only Monday-Friday/9-5 business hours. If a collection activity is about to happen—such as your car getting repossessed, a court action, or getting thrown out of a house that’s about to be foreclosed on—the activity can be halted.  This is called an “automatic stay.” It’s the power of the bankruptcy code that requires all creditors to stop any collection activity. 

An automatic stay is one of the immediate things that happens once you file for bankruptcy. Want to find out more? Then stay tuned next week as we continue with Filing for Bankruptcy Part 2… 

Looking for information on your financial situation? As a bankruptcy lawyer in MA, I advise clients every day on bankruptcy and financial strategy. Call my office, the Law Office of Jack Morrison, today at 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.

Do I Qualify for Bankruptcy?

by Jack Morrison on April 5, 2011

“Do I qualify for bankruptcy?” In my Worcester bankruptcy practice, this is one question that I frequently get asked by prospective clients. While I understand the reasoning behind this inquiry, a better question would be, “does bankruptcy make sense for me in my situation?” 

The reasoning for this is simple. Although any bankruptcy lawyer can tell you whether you qualify, a good attorney will analyze your situation so you know if you will be better off filing. The intent behind filing for bankruptcy is to not only get you back on your feet financially, but also to look and see what you own and have an interest in. 

Let’s take an example. Say you owe $50,000 in credit card debt but own two cars, outright, at $30,000 each (no loan on the cars). Now, you can’t keep both vehicles and get rid of your debt by filing for bankruptcy. But if you have car loans and no equity, then you can keep the cars and get rid of the debt. This is a subtle, but important, difference. 

When you talk to a bankruptcy lawyer, we’ll help you determine what equity you have access to that can be used to pay your creditors. We’ll also assure you of one other important item that clients ask about: You don’t have to be broke before you qualify for bankruptcy. 

There’s a lot of intricacies surrounding filing for bankruptcy and determining if this is the best option for you. But as a Worcester bankruptcy attorney, I know for a fact that bankruptcy has helped dozens of my clients and hundreds of individuals and families get back on their feet. 

If you’re interested in having your financial situation analyzed, give me a call at my office at 508-852-7800. During our conversation, I will provide informative, honest answers to your questions.  And you’ll know what the next best step is to moving confidently forward.