It’s morally wrong to file for Bankruptcy?

Many people facing bankruptcy feel a strong sense of failure and embarrassment. The banks and even the media would like you to feel it is your fault. The truth is my clients are good people who want to pay their debts but find themselves in a bad situation. Many have found themselves drowning in debt due to no fault of their own. You have a legal right to seek real debt relief under the U. S. Bankruptcy Code. My best advice is to hold off on any moral judgment until you have all the information.  If you would like more information on filing for bankruptcy click HERE to visit my website.

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How Do I Get Personalized Bankruptcy Service?

I was recently asked this question by a lady who called my office.  She had been getting the run around from a Bankruptcy Mill.  These are places that try and do as many bankruptcy cases as they can to turn a profit – some of these places are not even lawyers they are paperwork prepares.

You Deserve Personalized Bankruptcy Service!

It is important to realize that filing Bankruptcy is a lot like a dating, if you do not choose the right person it is destined for failure. That is not to say that you won’t get your Bankruptcy discharge if you use a Bankruptcy Mill, but rather that the Bankruptcy Process will be a lot more stressful than it should be. If you work with a bankruptcy attorney that you trust and that you know is there with you every step of the way, the Bankruptcy Process is a lot less stressful! If you are filing for Bankruptcy, you already have enough stress in your life, why add to it? You deserve personalized service during this stressful time! You deserve a Bankruptcy Attorney who limits the number of clients taken on each month so that you can be provided with personalized service!

Schedule Your Free Personalized Bankruptcy Strategy Session Today!

If you are ready to file for Bankruptcy and want the personalized service that you deserve, contact me today for your FREE Bankruptcy Strategy Session, by calling me at (801) 221-9911. I limit the number of clients I take on each month so that I can give each of them the personalized service you deserve.

You Can You Declare Bankruptcy by Saying It in Public?

In an episode of The Office, when Michael Scott’s finances are tight, he screams, “I declare bankruptcy!” His accountant Oscar says, “Hey, I just want you to know that you can’t just say the word bankruptcy and expect anything to happen.” Michael replies, “I didn’t say it, I Declared It.” Of course, Oscar is right. Filing for bankruptcy requires preparing numerous documents, taking classes and paying a filing fee.  Sometime I wonder if congress purposefully created so many requirements just to limit the number of bankruptcies that are filed.  I know there are a lot of people who should file a bankruptcy but do not choose to do so because it seems overwhelming.  It does not need to be that way – a competent bankruptcy attorney can help you make the process doable and the right step for you.  In Utah visit us on the web at www.dlblaw.com

Did Bankruptcy Reform Increase Financial Distress?

Interesting article on the effect of 2005 Bankruptcy reform:

“The number of personal bankruptcy filings in the United States increased more than fivefold between 1980 and 2004. By then, more Americans were filing for bankruptcy than were graduating from college or getting divorced.”
The number of personal bankruptcy filings in the United States increased more than fivefold between 1980 and 2004. By then, more Americans were filing for bankruptcy than were graduating from college or getting divorced. When Congress reformed bankruptcy laws two years ago, its aim was to crack down on those who were using bankruptcy as an easy way to escape their debts. The reform made filing for bankruptcy more difficult by requiring debtors with higher incomes to repay more, by making it much more complicated and expensive for all debtors to file, and by increasing the number of debtors who are ineligible for bankruptcy. These reforms caused the number of filings to drop dramatically – from 2 million in 2005 to 600,000 in 2006.
But the reforms had an unintended effect, contends Michelle J. White in Bankruptcy Reform and Credit Cards (NBER Working Paper No. 13265). While bankruptcy filings dropped, financial distress increased. How did this happen?
The answer is that by making it harder for consumers to escape their debts, the new law dramatically reduced lenders’ losses from default and bankruptcy. As a result, they started lending more, even to consumers with bad credit. Credit card debt increased more quickly during the past two years than at any time during the previous five years.
Consumers should have responded to the new harsher bankruptcy law by borrowing less, which would have lowered their risk of getting into financial distress. But not all consumers behaved in this rational way. Instead, many behaved shortsightedly and took advantage of the greater availability of credit to borrow more than they could easily handle — ignoring the risk of financial distress. (Economists refer to this shortsighted behavior as “hyperbolic discounting” – consumers who are hyperbolic discounters intend to start paying off their debts immediately, but each month they consume too much and end up postponing repayment until the following month. So their debts steadily increase.)
The new bankruptcy law exacerbated the problem of shortsighted consumers borrowing too much, because it prevented many of them from using bankruptcy to limit their financial distress. Many consumers in financial distress are unable to file for bankruptcy under the new law, because they cannot afford the costs of filing, cannot meet the new paperwork requirements, or are ineligible. This means that their debts will not be discharged and they will remain vulnerable to creditors’ collection calls and to wage garnishment that may take funds they need for basic necessities. Because of the new bankruptcy law, consumers can end up in deeper financial distress than would have been possible before 2005.
Survey evidence presented by White supports the idea that most debtors get into financial distress because of shortsighted behavior, rather than because they behave rationally but experience adverse events. In one survey of bankruptcy filers, 43 percent pointed to “high debt/misuse of credit cards” as their primary or secondary reason for filing. Another survey in 2006 found that two-thirds of those who sought credit counseling before filing for bankruptcy cited “poor money management/excessive spending” as the reason for their predicament, compared to only 31 percent who pointed to loss of income or medical bills.
White argues that lowering the costs of filing for bankruptcy would help debtors who are in the worst financial distress by making it easier for them to file. But changes in bankruptcy law cannot solve the basic problem of shortsighted consumers borrowing too much, since these consumers generally ignore the provisions of bankruptcy law until after they are in financial distress. Instead, White argues that changes in credit market and truth-in-lending regulation are more likely to work because they motivate lenders to lend less to the most vulnerable consumers.
— Laurent Belsie

PERSONAL BUDGET: The Envelope Accounting System

In my bankruptcy law practice I have realized that many of my clients have never taken the time to make and live on a budget. Many times the first time my clients have ever made a budget is when they sit down with me to file for bankruptcy. The other day I ran across this personal budget idea that I thought mat be helpful:
The Envelope Accounting System is a method of budgeting where on a regular basis (i.e. monthly, biweekly, etc.) a certain amount of money is set aside for a specific purpose, or category, in an envelope marked for that purpose. Then anytime you make a purchase you look in the envelope for the type of purchase being considered to see if there are sufficient funds to make the purchase. If the money is there, all is well. Otherwise, you have three options: 1) you do not make the purchase; 2) you wait until you can allocate more money to that envelope; 3) you sacrifice another category by moving money from its associated envelope. The flip side is true as well, if you do not spend everything in the envelope this month then the next allocation adds to what is already there resulting in more money for the next month. With envelope budgeting, the amount of money left to spend in a given category can be calculated at any time by counting the money in the envelope.

CAN MY UTILITY COMPANY CUT OFF SERVICES IF I FILE BANKRUPTCY?

Public utilities, such as the electric company, cannot refuse or cut off service because you have filed for bankruptcy in Utah. However, the utility can require a deposit for future service and you do have to pay bills which arise after your bankruptcy is filed. More information regarding Utah bankruptcy can be found HERE.