The names are being changed to protect the innocent.

Kevin O’Neill is a 38 year old single father of two daughters who are 10 and 8.  Kevin lives in a five bedroom, three and half bathroom house in a nice part of Allentown.  Three years ago, his ex-wife who had gone back to school finished her degree and left him for a professor.  She didn’t fight for custody but she did sue him for alimony and after two years in court, the judge ruled that she was not entitled to it.

Kevin had spent nearly $20,000 holding off his ex-wife’s legal attack and was now working on one income that had shrunk due to his additional responsibilities as the custodial parent.  His take home pay is about $4400 per month and his mortgage is $2800. (If you can do basic math you see the problem here).

Kevin had tapped out his savings (big mistake) keeping up with his mortgage but now the savings was gone and he had just gone four months past due on his mortgage and was served with an Act 91 notice of intent to foreclose.

More bad news.  Kevin had put $18,000 down on his house in 2002 and then refinanced to put his ex-wife through school.  This would had all the makings of  a Lifetime made for TV movie except the victim was a man.

So Kevin sees his dream house, his dream life, and his investment of eight years of timely payments on the mortgage going down the toilet.  Its enough to make anyone hide in the corner, but instead, Kevin did the smart thing, he picked up the phone and called me. Kevin set up an appointment and came.

Kevin brought his daughters with him.  They played with my girls while we discussed his situation.  That’s right, this is not some pretentious law firm that is going to stick its nose up at your kids… they can play with toys or watch TV here, this is a family law firm that doesn’t practice family law! (However if you need a family law attorney, my friend Sarah Mussel is a great one).

Kevin desperately wanted to keep his home, and he could have, but it doesn’t make sense.  The house is five bedrooms.  Five bedrooms for three people is overkill.  When Kevin and his ex-wife purchased the home, it was with the idea that his ex-wife’s mother was going to move in… clearly that wasn’t going to happen now.  Even though Kevin’s house is in a nice part of Allentown, he’d like to get his daughters in a school that has more options, which means moving or sending them to private school, something he would never be able to afford with that mortgage.

So, “I’m f–ked,” Kevin said. 

“Not so fast,” was my reply.  The reality is that I have no magic wand to make a mortgage payment shrink, and if someone says they do, walk, better yet run away! What I can do is hold off a foreclosure for a year, maybe longer, to buy you time to save up and find a place to live.

A foreclosure is not automatic.  It is a legal action, a complaint in foreclosure.  Each foreclosure complaint lists several things on it, and I can object to them one at a time.  Without getting into the fine minutia of each thing I can do in a foreclosure, I can hold your foreclosure off for a long time simply because of defects in a creditor’s complaint. The best part about hiring me to defend your foreclosure is you no longer have to deal with it.  Legal paperwork can be irritating and intimidating.  I’ll be the guy picking up the phone and answering the letters and emails.

Like most things in life and in the legal world, this is all about timing and accuracy, and that is why you hire an attorney.

By the end of the conversation, Kevin had hired me.  For my relatively low monthly fee, Kevin would be able to stay in his home, put money aside for the eventual move, and manage and control when and where he moved.  Like I tell every client, I will help you control the situation rather than have it control you! If I can’t accomplish that, its time for me to quit practicing law and join the circus.

Just so you can see this in real numbers (each case is different, this is an example) look at the numbers below:

Take home pay: $4400

Utilites: $200

Transportation: $550

Food: $500

Miscellaneous Expenses: $750

By defending the lawsuit, my client is now in positive income by $2400 per month. He will recoup his $18,000 down payment and then some if the foreclosure is held off for two years.  If he saves even half that, it is $24,000 saved at the end of two years.  If you had to start over, would you rather start over with nothing or with $24,000 in the bank? Yeah me too.

Even though Kevin doesn’t intend to stay in his home, he is going to benefit drastically by defending his foreclosure.

So does it always make sense to answer a foreclosure action? 

No.  Suppose Kevin were unemployed and collecting unemployment.  His income would be cut significantly and he would not see the benefit of fighting the foreclosure.  Suppose Kevin had met a woman (or a man, it is 2012 after all) that he wanted to marry (not yet legal in the Commonwealth of Pennsylvania, lets fix that) and that person owned or rented a home he and his kids could move into.  It may make more sense to walk away and share expenses.

Not everyone should defend a foreclosure, but in my experience, most people benefit by fighting a foreclosure.

Still not sure?  That’s quite alright, that’s where I come in.  Call 484-661-2891 or email me at jim@padebt911.com and we can set an appointment for a free, no-obligation consultation.  Feel free to bring your kids.

So what does her blog have to with bankruptcy law?  Absolutely nothing!

There is more to life than the nuances of the legal profession, and while I confess I have not read every one of her articles, (there are references to TV shows and other things I have no knowledge of), the blog entries I have read are great.

My favorite by far in particular is “Declaring Victimhood Dead“.  This is the sort of spot on stuff that I can get behind.  I print this out for some clients and for anyone in a financial crisis, it should be required reading.

Check out her blog, it is uplifting, energizing, and sometimes requires a dictionary (at least I need one).

And to the writer, thanks for being a good blogger and an even better friend.

The other day I was watching Rocky IV (albeit not the best of the series) on channel 84.  Rocky’s best friend and former opponent, Apollo Creed, gets in the ring with Ivan Drago, a stereotypical Russian boxer (remember it was 1985, the Russians were still bad guys) and gets the tar beat out of him.

Drago eventually kills Creed in the ring and Rocky, against the advice of others, and against the odds (of course), agrees to fight Drago in Russia, which is as safe as wearing a Penguins jersey in Philadelphia’s south-side at 3 AM.  Drago uses all the latest and greatest technologies and drugs (better living through chemistry) to prepare for the match while Rocky runs around in the snow and chops wood to prepare.  Can you say unfair advantage?

Oh yeah, he drags this guy around on a sled too.  Looks like fun.

The match starts out the way most of Rocky’s fights start, with Rocky getting the crap kicked out of him.  Drago smacked Rocky around the ring, but eventually the tide starts to turn and by the final round, Rocky has battled back and knocks out Drago… he then goes into the “change” speech which is best saved for another blog.

So what does this have to do with finances, or is Jim just waxing poetically about the 1980s again?  While I have been guilty of reminiscing those great days, a Rocky fight is a great parallel to our financial lives.

Very few people go through life without every encountering financial struggles.  Maybe it is a job loss, maybe it is a medical emergency or a car accident.  For whatever reason, the Ivan Dragos of your financial life will sprout up from time to time.

So what did Rocky Balboa do?  The first thing Rocky did was face his opponent.  Rocky didn’t ignore the giant Russian in the ring, and you shouldn’t ignore your past due credit card, mortgage, or credit card lawsuit. When Rocky looked at Drago, he realized that Drago was human, a big human, but a human who could be defeated.  Any past due balance can be defeated! Once you look at your problem, it becomes easier to deal with.  Open the letter.  Take the phone call.  Get as much information as you can.

“That’s just great Jim”, you are thinking, “I’m unemployed and my UE is running out, what good does it do to open the letter?  I can’t even fight back.”

You will not be in bad financial straits forever! Financial problems do not have to be a life sentence.  Rocky got the hell knocked out of him by Drago for several rounds and your humble writer has been through financial hell and back and I have lived to tell about it too.  If you are looking for work, you will eventually find something, and then you will already have an idea of what problems you have to deal with and what needs to be addressed first.

One other thing to realize is that you probably will get knocked down again.  What I love about Rocky is he always got up, even when he shouldn’t have.  Once you have defeated one Ivan Drago, you will be ready to deal with the next one.

The most important thing is don’t ever quit! This recession has had a lot of casualties.  While many are out of work, few are out of work because of their own doing.  Rocky never beat himself up for his situation, and you shouldn’t either.

At the end of the fight, Drago was defeated and Rocky was victorious.  You can be too! Oh, and one other thing, Rocky had a great corner man coaching him along the way.  That’s where an experienced attorney comes in.  I am ready to be your corner man, to help you through this process, and I will help you knock the Drago’s of your financial life on their backs… then maybe they will put your statute next to the statue of Rocky Balboa.

This cornerman is ready to take on a new contender.  Call 484-661-2891 or email jim@padebt911.com if you are ready to flatten Drago once and for all!

An Act 91 notice is the first step in the foreclosure process.  This notice indicates that the secured creditor, usually a bank, intends to foreclose on your property.  This is the first step in foreclosing on your home, but there are many steps and the creditor can be slowed or stopped at each of them along the way.

If you think that you want to stop and try to save your home, the absolute worst thing you can do is move!

There are many reasons not to move.

• You do not have to move yet, so you are spending money renting or living with relatives without a need to.
• If you leave the property and then return to it later it may be in disrepair because you weren’t there to take care of it.
• Even if you are ultimately unable to stay, you will be able to live rent-free for a year, probably longer, and save up money to start over again.
• After foreclosure, the new owner of the property may offer you money to leave.  If you have already left, you will never get that offer!

I met with an elderly couple, mid-70s, who had put all their savings into a down-payment on their home (I will write more about why your home is not a retirement plan in another post) and when they received their Act 91 notice, they turned tail and left.  They found a place that rented for the same amount as their mortgage.  That’s right, they were only three months behind on their mortgage and they left out of fear.

You don’t need to be afraid, you need to hire a lawyer.

If I had met with this couple when they first got their Act 91 notice, I would have been able to help them, by the time they saw me last week, it was too late.

Before a creditor can foreclose on your home, they must first win a lawsuit proving that not only do they own the loan (and they have gotten a lot better at showing up with those) but that they actually have the right to foreclose.

What is right to foreclose? Well this is a very tricky situation.  Sometimes a secured creditor is from a pool of bonds, which means… well I don’t want your eyes to glaze over and we have auditors for that, but to make it short and sweet, the right party must be foreclosing, they must actually own the note, and showing up with the note itself isn’t always enough.

Once they prove they own the note and they have the right to foreclose, they have to prove that you have defaulted, which isn’t always as easy as it sounds.

I had one client in particular who showed six months behind on a $1200 per month mortgage.  An audit of my client’s payment records indicated that the creditor had not applied two payments, had over billed him on taxes, over billed him on a line called “miscellaneous charges” and by doing so, he had been overcharged by nearly $13,200 before he fell behind on his mortgage.  Imagine the shock on the lawyer’s face when I proved in court that my client was actually ahead. Egg on their face doesn’t even begin to describe it.

So you’re thinking, this is great and all Jim, but I’m actually really behind on my mortgage and the bank’s numbers are probably right, what can I do?  Well the first thing you can do is pick up the phone and call my office at 484-661-2891 and set up a consultation.  There will be no charge for this appointment and I will explain your rights and obligations, and more importantly, I will show you the myriad of options you have to save your home… and most of them cost less than what it costs to move.

I do this because Lehigh Valley consumers suffer from a lack of valid information on options to resolve their debt problems.  I do this because the radio stations in Allentown, Bethlehem, Easton and Emmaus have advertisements running non-stop offering debt settlement and mortgage modification.

I do this because even two years after the FTC made mortgage modification by anyone other than an attorney illegal, I still have clients come to me after being ripped off by these shysters.

Today’s post is going to be different.  My New Year’s resolution was to let my reader get to know Jim the person, not just Jim the lawyer.  When I’m not wearing my lawyer suit, I’m a lot of things.  I’m a member of Calvary Baptist Church in Bethlehem, PA.  I’m a registered Democrat with a serious Libertarian bent.  I’m a fan of the New York Islanders and I probably have owned every one of PFR’s albums, including Goldie’s Last Day on cassette (for the under 25 crowd, the cassette played music on a… nevermind).

Above all that, I am a believer in Jesus Christ as my savior and that the Bible gives us our only true road map on how to live our lives.  While that may not be politically correct, I’m not worried about that because my savior wasn’t politically correct either.  I am the father of two little girls, one is almost 7 and the other just turned 5.  The Bible is clear in Proverbs 22:6 “Train a child in the way he should go, and when he is old he will not turn from it.”  Even if you are not a believer in my faith, this is still a logical statement about child rearing.

That’s why I need the C.E.O. of Go Daddy, Bob Parsons, to understand why I can no longer be a customer.

I watched the Super Bowl on Sunday.  I was thrilled to see fellow Ole Miss alum, Eli Manning, lead the Giants to another world title.  What I wasn’t happy with was the risque nature of some of the commercials, particularly Go Daddy’s commercials (no I will not dignify it with a link).

Mr. Parsons cannot reasonably expect that children were not going to be watching this game, and while the entirety of television content should not be determined on whether or not children could be watching, he made his decision to go over the line and I made the decision to no longer be his customer.

This is not a call to action, I’m not trying to start a boycott. This is a lesson in fatherhood.  I was a customer of Godaddy, the server transfer should be completed soon and then I will have no relationship with them at all.

I am raising my daughters to be first God-fearing and Bible believing, and secondly to believe in themselves and that their worth is not connected to their looks.  I simply will not support an organization that chooses to send an entirely opposite message.

The commercial you ran during the Super Bowl, Mr. Parsons, is an affront to any father raising daughters the way I am.  For an accomplished woman like NASCAR star Danica Patrick to be put on display as a sex object tells them that regardless of whatever they accomplish they will only be considered valuable if they parade on stage in next to no clothing.  This is a message that I and fathers of daughters around the United States summarily reject.

So Mr. Parsons, it gives me great regret to tell you that you and your company are fired.

You see, as that great philosopher Simon Wilder in the movie “With Honors” (One of my top-ten movies of all time) said, “Our ‘founding parents’ were pompous, white, middle-aged farmers, but they were also great men. Because they knew one thing that all great men should know: that they didn’t know everything.  Sure, they’d make mistakes, but they made sure to leave a way to correct them.”

As a lawyer, I’ve made some mistakes, and more importantly, its time to correct them.

One thing I have let slip is the returning phone calls in 24 hours rule.  Now I know there are a lot of lawyers in this county that take weeks to return phone calls, but that has never been me, but I had a rule to return calls in 24 hours unless it was a weekend or a holiday and I know I dropped the ball on that this year.  To remedy this, I’ve got a simple solution.  I will return all my phone messages at the same time every day, that way I know it hasn’t been 24 hours.  My office number is 610-400-3093 just in case you need it.

Another thing I fell into last year is something that gets debtors in a lot of trouble, and that is procrastination.  Documents are filed with the bankruptcy court every day, yet it seems that issues are only resolved the day before they are due.  That is crap, and I am as guilty of that as anyone.  No more.  I will be logging into my ECF mail program each day and getting right on top of things.  Now I do have some matters that I am behind on, but in a matter of a month that will solve itself and I will never, ever, fall this far behind again.

Finally I have been guilty of being robotic at times.  Everything on this blog is about law, and that is all good information, but some of this blog should be about me and about the city of Emmaus that I call home.  Beginning with my next post, I’m going to let you a little more into my life and know a little more about me.  What movies I like, what kind of hobbies I do, as well as some of the great places in Emmaus that I suggest you check out.

So from today and on, the old lawyer who fell behind on his work and took too long to return calls is officially fired.  The new attorney Kutkowski is here, ready and able to help you get through your financial woes, and occasionally play movie critic and irate sports fan as well.

So what about you?  What are your resolutions this year?  Everyone wants to lose weight or get in shape.  We all probably ate too much over the holidays, but what about your finances?  Are you ready to get the weight of your credit card debt or other aggravations off your back?  Are you ready to start your ride off into the sunset and leave your debt woes behind you.  If you are, please call 610-400-3093 and set up your free consultation.  Debt freedom can be yours.

Fair warning, let the rant begin!

Recently I was driving and heard an advertisement enticing the consumer to go into debt to go on vacation.

The ad goes something like this.

Wife: “Oh, I can’t believe it.”

Husband: “Yeah”

Wife: “Is this our vacation?”

Husband: “No, it’s the honeymoon we never took.”

So far, so good, but then here is the catch…  Wait for it…

Husband: (Thinking) “Finally I get to fulfill the promise I made, thank you Ivy (Name Changed to protect the guilty) Financial.”  Then the radio announcer guy says “Take out a loan against your house for new furniture or that vacation you’ve always wanted to go on.”

I thought we learned our lesson in 2008!

At this point I started yelling at the radio.  I stopped myself before I drove off the road and because I had woken up my daughter (sorry Mellie) with my rant.  I let loose a torrent of frustration usually reserved for my hapless New York Mets.

Did we learn anything in 2008?  You finally have SOME equity in your home and you are going to borrow against it to go on vacation?  Seriously?

Banks exist to make a profit.  They are not sending you on vacation for nothing.  Every additional dollar you borrow against your home is an additional dollar you will have to pay back later.  SO DON’T DO IT!!!

Lets pull this ad apart.  It said “take a loan against your house.”  A house is a thing, an object, something that is replaceable.  Your home is where your kids live!!! The bank is enticing you to borrow money against the place your kids live.

You can’t live in your vacation.

I can’t tell you how many people I see in my office that have awful second mortgages and can’t tell me where they spent the money.  I know where they spent the money, and so do the Ivy Financials of the world.

So what does this have to do with bankruptcy?  Very little actually.  Most lenders are being very careful about second mortgages these days.  They are being careful because with the value of real estate plummeting (it has dropped 35-40% and the biggest shoe hasn’t dropped yet) they have been subject to lien stripping even when they have tried to pull a dirty 80/20.  This means that a lot of second mortgage lenders are not getting paid on their loans.

Be assured that this time around, the second mortgages will be paid, every last penny, and if they are not, they are going to start foreclosure proceedings.

There is no free ride on the second mortgage these days.  I thought we learned our lesson in 2008.

Well the first step is to whine… well no, not really.  I’m not saying I didn’t let an expletive or two out after hearing that we lost, but I’m not not saying it either.

So after getting over the sting of losing a case that should have genuinely been won, what is the next step?

Well the next step is not to ignore it, and at least my client understood that.  In Pennsylvania, a magistrate’s decision is only final if the losing party does not decide to appeal the decision.  If the decision is appealed, the case is reviewed de novo (as if the first case never happened) at the Court of Common Pleas level, or as my client put it, “Big Boy Court.”

This is not to disparage the position of District Justice nor this particular judge’s decision (no matter how wrong it actually was), in my experience with District Justices, they have neither the time or capacity to understand every case that goes in front of them.

Once a District Justice has rendered his or her decision, the parties are notified in the mail of the result of that decision and are given thirty days to file an appeal.  The cost to file an appeal in Berks County is $215.50 (each county is different) and the appeal must be filed in 30 days.

The appeal is essentially a generic document that starts the process all over again, and because the hearing before the Magistrate is not a matter of record, your opposition is given twenty days to file their complaint or they could be subject to what is called a judgment non pros.  A judgment non pros basically says that you did not file your complaint so the Magistrate’s decision is overturned and you lost your case.

For the plaintiff all is not lost, unless the case is dismissed with prejudice, they can file the case again, but since they have already expended the money necessary to file the first case and have nothing to show for it, chances are they will go away.

So what should we do in this particular case.  Without giving information that would reveal my client’s identity (I would never violate privilege like that) here is the story.

My client, Steve (the name is changed to protect the innocent) is being sued by Discover (the name is not changed because we know Discover is a slimy company) for a credit card.  The balance they claim owed is $9500.  By all rights, they shouldn’t have even filed at the District Court level because the Magistrate is capped at $8000 in damages, however due to some sneaky maneuvering, Discover still managed to get a judgment for $9500.

Discover claims that Steve last paid this card in June 2010, but it is possible this card was taken out in his name by someone else, it is also possible that this is card from way in the past that his significant other (my father would have called it living in sin) had been using and paying.  Steve is one of those clients who can honestly say he doesn’t remember having an account.

We have what appears to be a potential statute of limitations case here.  The statute of limitations in Pennsylvania is four years on debt, but the statute starts at the date of last activity (payment).  You’re probably thinking, four years from 2010 gets you into 2013, why a statute of limitations issue.  The reason is that Discover says that the last payment was made in June 2010, it doesn’t mean they can prove it.  They had no canceled check, no payment confirmation, nothing but the integrity of the bank not to make a mistake or be deliberately underhanded.  Yeah me too, I’m not giving them the benefit of the doubt on this one.  Produce a canceled check or it didn’t happen.  Opposing counsel actually had the nerve to argue that these payments posting helped my client because it lowered his balance, I brought up the statute of limitation argument.

Opposing counsel also had the nerve to bring up the Fair Credit Reporting Act which requires a person to dispute something on their credit card within 60 days of receiving the statement, yet Discover did not have proof of mailing.

In any event, my strategy is going to be to file the appeal on day 29 to burn more of the statute of limitations.  If Discover loses the case, the statute of limitations will still be from the last legitimate payment date, furthermore by filing the appeal on day 29, there is a better chance that this appeal gets ignored and judgment non pros is entered.  By day 20, the winner at the magistrate level is usually pretty secure in their victory and may be counting their money in their head.  In my experience, a complaint in an appeal is more likely to be filed with a later appeal filing.

So in a few weeks, we will be filing our appeal and I am expecting Discover Card to put up a fight, but they’d better be better than they were Friday in Perkasie, because none of the crap they got away with in front of the magistrate is going to fly in Big Boy Court.

The ultimate solution to joblessness is getting a job, but while you are unemployed, there are some common sense things you can do to survive.  No, this isn’t going to be as much about bankruptcy as common sense, but sometimes when you are in the middle of the storm, common sense isn’t so common.  That’s OK, there will be a litany of people giving you advice, myself included, pick the advice that makes the best sense to you and discard the rest.  Don’t worry, I won’t hold a grudge if some of these tips don’t suit your fancy.

Tip #1, figure out your financial situation.  If you are newly laid off and collecting unemployment and you have some money saved in the bank, you may not be in a terrible situation at all.  Unemployment lasts a while these days, in some areas as long as 99 weeks, and while I would hope you’d find employment before that, at least there is that cushion.  If on the other hand you have nothing in the bank and you aren’t able to collect unemployment, you are definitely in some hotter water.  It is best to be armed with as much information as possible, and as painful as it may be to look at your account balances dwindle, you need to know where you stand.

Tip #2, coupons.  Coupons are very high on the list of awesomeness! Companies are giving you discounts on items you probably buy anyway, so clip away.  Our local newspaper the Morning Call advertises hundreds of dollars in savings every week.  I don’t know if that’s true or not, but I know a good deal when I see one and when I can routinely get $50 in savings on things I would buy anyway from a $1.25 Sunday newspaper, that’s a steal.

Tip #3, buying in bulk.  One of the best quotes from one of my favorite cult classic movies, Employee of the Month, is “Buying in bulk is our God-given right!”.  Well I didn’t see anything like that in a version of the Bible but even so its still a good idea if you can store food.  If you can’t and it rots, well you lose money, but if you can, it can be a Godsend, and I promise you I’ve gotten more mileage out of my Sam’s Club membership than what it cost.  Think about it.  If you spend $8 for 24 rolls of toilet paper, is that a better deal than $19 for 96 rolls of toilet paper?  No it isn’t, and since toilet paper doesn’t go bad, it makes perfect sense to buy this sort of thing in bulk.  As long as it can be stored safely and bought at a discount and it’s going to be used (bulk purchases of brussels sprouts are not a deal if they aren’t eaten), its worth it to buy more ahead of time.

Tip #4, The Best By Date on the Milk Carton was Created By Lawyers, the Sniff Test by God. God gave you a nose for a reason.  One of the big reasons for the olfactory sense is to know when we are about to eat something we shouldn’t.  While I’ve wondered who was the first person to look at a cow and think, “hmm, I bet that tastes great?”, the milk isn’t bad unless it smells bad.  You can’t always trust the best by date either.  As a teenager I poured some wonderfully sour milk into Cheerios and wow, you don’t forget that.  My wife will tell you that I will sniff the milk twice or three times, every time I pour my kids cereal.  Yeah, you don’t forget that.

Tip #5, a car burns gas faster with the air conditioner on.  It’s true.  I don’t know why it works like that but it does.  On days where it is 100 degrees out (like today), you probably need to have the air conditioner on (although I had a 1977 Chevy when I was in college and it didn’t have air conditioning and that was Missouri in the summer), but on a day where its in the high 70s to the low 80s, roll the window down, enjoy the fresh air.

Tip #6, when you have less money coming in, prioritize what you spend money on.  Power, water and food comes first.  Then transportation.  Don’t fall too far behind on your car loan, they will repossess it and then you will have to pay the whole balance to get the car back.  A mortgage you can fall further behind on, but don’t deliberately do it.  If you can’t afford your mortgage, you can usually stay in your house a year before it is foreclosed on in Pennsylvania.  Hopefully you will be back to work before then and can work something out with your bank, but if you can’t consider Chapter 13 bankruptcy, I know a lawyer who is pretty good at that.  Your credit cards are the last people who get paid.  They will hoot and holler and call you all sorts of nasty names, but if its between whether feeding your kid or having someone berate you on the phone, I choose feeding my kid every time.  Don’t let these jokers bully you, because if they do, they could find themselves being sued.  I stole one of my favorite lines from Dave Ramsey, “I’d sure like to own a collections company.”

Tip #7, cut the fat.  I’m not talking about your diet, however if money is scarce going on a diet might make things seem a little less oppressive.  I’m talking about the things we can’t live without that we probably can live without.  Cable TV is probably the first thing on my list.  Cable has become expensive, and frankly not worth it.  The cable/internet/phone deal costs almost $150 per month in my area, but you can get internet for $50 a month and Netflix for $8 per month.  Couple that with an antenna (used to be called rabbit ears) to get local programming and you will have almost everything you had anyway.  Do you really need an extra two food channels?  Is your life better because you get MSNBC or FOX News?  Do you really need a land line phone when everyone and their child has a cell phone?  No, you could cut your entertainment budget in a third and if you really need to see a TV show, most stations are streaming current TV shows on their web-site.

Tip #8, Never Surrender! Don’t give up.  When you get knocked down, get up and try again.  We’re Americans, it’s what we do.  The West would never have been won if the original settlers gave up the first time they encountered trouble.  If you want to live in a country that is going to coddle you from the day you are born until the day you die but you will never really get a chance to be successful, try France.  It may take a year, it may take longer to find a job.  You may never find another job.  When I got laid off , I start
ed this law practice because it was clear that the legal jobs that I was qualified to do were drying up and being sent overseas.  You may find something that you have always wanted to try but couldn’t because it would be too much of a pay decrease.  Now it won’t be.  One day, and maybe not to long from now, I’m going to try something new, something different.  For you, that day may be today, so go for it with all the gusto you have. But most of all don’t give up, don’t ever give up.

If you find yourself in a financial position that you can’t handle or you can’t get a handle on and you need to talk to a competent professional, call 610-400-3093 for a free consultation.  You don’t have to do this alone, and you may not even need legal advice, just friendly advice.  It would be my privilege to provide you with either.

Sadly, 50% of marriages end in divorce.  That means 1 out of every 2 marriages will end in failure.  So even though discussing divorce is as fun as rehashing the 1993 Mets season a game an inning at a time and seems to last as long as the last Jane Austin film I was forced to watch (the last thing I wanted to hear was this is the end of Act 1), it is important to know what a divorce decree can and cannot do regarding debt.

The most important thing to know is that a divorce decree cannot, on its own, change a contract.  If Jack and Diane had a credit card that they were jointly responsible for and when they divorced, Diane was to be responsible for paying that debt, Jack is still responsible for it contractually.  Divorce cannot change the terms of a contract with a non-related party! Think about it from a fairness perspective.  Suppose rather than Citibank lending Jack and Diane $20,000, it was their friend Fred.  Fred knew that Jack had a good job and Diane had always been good for the money, so he made a loan that made them both responsible.  Would it be fair to Fred if a divorce decree could cut his rights to collect that debt in half?  Of course not, and I dare say that banks would not make loans based on two incomes if a divorce decree could change their contractual rights.

So now Jack and Diane are divorced.  Jack has the kids and is moving on with his life.  Diane however is now realizing all that Jack contributed to her lifestyle and is hitting a cash crunch.  It happens, it doesn’t make you a bad person! Diane stops paying the Citibank bill.  It won’t take long before Jack, who has gotten his life back in order, starts getting collections calls from Citibank… unless Jack has changed his phone number, which is common in divorce.

Now Citibank doesn’t have good contact information from Jack and he doesn’t find out that Diane has stopped paying on her bill until a lawsuit is filed against him.

So you’re probably thinking, how do I avoid this?  One of the smartest things you can do is keep an eye on your credit report.  If you are a joint borrower, the card will appear on your credit report.  You will be able to see if the bill is being paid on time.  You should also keep a record of all accounts that your ex-spouse is supposed to be paying and check them on-line! Just about every credit card company has on-line access, it is more cost effective than having phone jockeys handling the phone calls or even an IVR giving electronic information.  By going on-line you can quickly see if your ex is doing what he/she is supposed to be doing.

Of course, Jack hasn’t done any of these things and now he is in pickle because he’s being sued for a debt he thought was gone because his divorce lawyer told him that he is no longer responsible for the debt.  Chances are if your ex isn’t paying one bill, they aren’t paying any of them! If you find yourself in this position, you need to speak to a competent professional who can help.  More than half of the people I see do not need bankruptcy, they just need to find a way out of the weeds.  If this is you, I’d be happy to help, call 610-400-3093 for a free consultation.  One think I tell my clients is Control the situation rather than have the situation control you!

As far as family law, I don’t do that, however if you are in the Lehigh Valley area and need a good family law attorney, I’d be happy to refer you to one.  Call 610-400-3093 for the referral.  Just remember that just because the divorce decree says you don’t have to pay it doesn’t mean you won’t eventually have to pay it.