What do you recommend people do when facing a lot of collection calls and lots of financial stresss? How should they handle this situation?

There are two ways of handling debt. One is to just live in continuous fear of your creditors and live under stress all the time or the second way would be to do something about it. One of the ways I suggest is if you are qualified is to file a simple chapter 7 bankruptcy or a chapter 13 bankruptcy if you’re not qualified for a chapter 7. And of course there is  differences between the two bankruptcies, and I’ll be able to explain to you more when I meet with you. Chapter 7 for example is a very simple process from start to finish within 4 months it’s all over with. And then you can move on and rebuild your credit and do all the things that you have always wanted to do in terms of assets and finances. Chapter 13 is a streamlined but a little bit of lengthy procedure, however, as soon as you file your chapter 13, there will be no more harassment calls, and all collection and garnishments will stop immediately.  All the stress goes away in a moment’s notice. So, you have a choice. What do you want to do? Live in stress and destroy your family, your marriage,  and destroy your peace of mind or do something about it and get rid of those debts.

A lot of people hear on TV and radio about services that will help you with debt settlement or debt consolidation, what do you say about those type of services?

Debt settlement, debt consolidation, debt negotiation, these are all great, great things. They help certain people. And the kind of people they help is who are currently making a lot of money and have a disposable income at the end of each month. I just want to warn you. If you think that you can do a debt settlement and that is going to somehow magically improve your credit score, I can tell you “That is wrong.” Once you’re late, 30 days, 60 days, 90 days, your credit is already ruined. And just settling the debt with the creditor is not going to improve your score. In fact, they’re going to report on your credit report that the “debt was settled for less than full value” and that’s bad for your credit. So, if you are under the impression that, “Oh, if I pay something towards my debt, my credit is going to become better.” That is not correct. I suggest if you don’t have excess amount of money, if you’re not making a lot of money, file a chapter 7 or a chapter 13. A Chapter 7 or 13 does not affect your score any worse than a foreclosure, or a loan modification, or  being 30 days, 60 days, 90 days late. In fact once your score is low enough, nothing you do will lower the score any more.

What is your advice for people that are afraid of creditors garnishing their wages.

The only time a creditor can garnish your wages or take your car or try to garnish your bank account is if they have a judgment against you. Once they have a judgment against you, they have the right to do all kinds of bad things to you including sometimes intercepting your tax refunds, garnishing your wages, bank accounts, seizing your cars, etc.  You need to see me immediately if that happens to you because a bankruptcy filing will automatically stop all these kinds of bad things that a creditor can do to you. Let’s say for example you had an accident and there is a judgment against you because you didn’t have insurance to cover for the damage, if you cannot pay that judgment or make arrangements to pay their judgment, the DMV will suspend your driver’s license. We can file a bankruptcy, get that debt discharged and get back your driver’s license and you’ll not have to pay that debt at all. Many people don’t know that and they drive around with suspended license. But remember, if you get caught with a suspended license, you can actually go to jail. So don’t do that. If your drivers license is suspended because of a judgment due to a car accident, we can get your license back and get rid of the debt at the same time.  

So what’s happening in 2012 as far as the loan modifications with the banks? Are they more flexible? What is this current status?

Loan modifications are not working. Very few people are getting loan modifications and even when they get them, the payments are so high that people default within a few months. Again, you’re taking a chance. I would say you should apply for a loan modification as a delay tactic so that they can delay your foreclosure or they can delay the foreclosure or filing the foreclosure case against you. But if you’re depending on them giving you a good loan modification, it doesn’t happen many times. In the past 7 years, I have seen about 3 clients who have got principal reduction and that’s a very small percentage. I have some clients that have got loan modifications but they were not always affordable. So loan modifications are difficult to get, and even when you get them they are not affordable. Bank of America is probably the worst bank to deal with. They will just give you the run around for the next 8 months and then say, “Oh, we cannot approve your loan modification application.”

Any suggestions for people that want to get back on their feet after they go through these terrible times?

Immediately after your bankruptcy or during your chapter 13 bankruptcy, you should take steps to repair your credit because bad credit means you are going to pay higher interest rate on cars, on future mortgages, etc. etc. And that will cost you a lot of money throughout your lifetime. Immediately they should take steps to do something about their credit and I can give you many ideas on some things that you can do yourselves and some things I can do for you through our credit restoration services. Of course you have to always try to see if you can get a better job, make more money,  save more money. Those are important things that you need to start doing. Be a little bit more responsible. Don’t use your credit card for frivolous stuff and all those things that you want but don’t really need. Nobody needs a 2012 Mercedes E450, but yes, we all need a decent car to go to work.  There are other things that I can suggest that you need to do to get back on track. One thing for sure is just because you filed for bankruptcy it is not the end of your life. It is actually a beginning of a new fresh start for you. So, anybody that tells you, hey, if you file your bankruptcy that’s the end. Don’t believe them because they just don’t know better. Many times the people who are closest to us will tell you don’t ever file bankruptcy. It’s our mother or father or brother or sister or family members and our close friends. If you really want to know what bankruptcy can do to you and what it cannot to you, come and see me. I’ll explain to you in plain language how it affects you, what you can do and what you cannot do. My goal is not just to put people in bankruptcy but also to keep them out of bankruptcy if they are not qualified for one.

What happens when there is an increase of income while you are still in chapter 13? Is that going to jeopardize their chapter 13 payment plan?

In this district in Broward and Palm Beach, it has not mattered so far how much money you make after you file the chapter 13 bankruptcy. But I must say that with a caution and the reason is in the bankruptcy law itself says very clearly that if your income increases in the future, you have to modify your Plan to increase payments to your creditors. I know the chapter 13 trustee in Miami has filed motions to modify a debtor’s plan to increase plan payments. I have not seen the Broward and Palm Beach trustee doing so at this time. If something like that is about to happen to you, you need to come and talk to me. Maybe there are other alternatives that we can work on, maybe even convert your case to a chapter 7 right away and give up some of your assets to the Chapter 7 Trustee or buy them back from the Trustee with your new money. So, as long as you keep in touch with me about your financial situation, I can guide you every step of the way.