Diamond Speaks His Mind on Bankruptcy and Related Topics

A NEW EVIL HAS EMERGED - DEBT RELIEF STOREFRONTS

Oh my God, today I spoke with a woman who was considering bankruptcy as a way to get out from under her credit card debt.  She like most people would rather pay off her debts than file for bankruptcy especially when you can wrap your arms around your debt total.  I applaud your ethics and values.  Sometimes, based on how much you owe in credit card debt it could take years and years and years to pay off especially due to mounting interest rates.  Some of these debt relief storefronts are no better in helping you than the exorbitant interest rates charged by the credit card companies.  Getting back to this woman I spoke to today, her debts today were approximately $6,000.  The company she was (at least I hope it's in the past now)  considering working with was going to charge her on top of her  monthly payment towards her credit card debt  - a service charge of $300 per month during the lifetime of the  payment schedule.  She was told that it would take approximately 24 months.  What is wrong with this picture?  A $6,000 debt without additional interest charges would cost this woman more than $13,000.  People do the math!!  I know how it feels to have bills you can't pay and to have creditors breathing down your neck.  I know how badly that can make you feel and so you think anyone that will work with you is a blessing.  NOT................  Read, read, read the fine print........... You're not buying a car ............. you're paying off debts.   DO THE MATH. 

If you choose to handle your credit card debt through a debt relief agency seek out a non- profit agency.  Or consider filing bankruptcy, Chapter 7 where you erase entirely your credit card debt as well as all unsecured debts if you qualify.

Not All Debt Relief Companies Are Created Equal

 

I want to make it clear that I have nothing against "Debt Relief Agencies".  Under the right circumstances they perform a service that avoids bankruptcy for many people.  Some of these companies are honest, charge reasonable fees and have a staff that is well trained.  A good example is the YWCA here in El Paso, Texas.  Over the past six months it appears that the number of companies that offer debt relief by making deals with your creditors has increased substantially.  You see their ads on TV, hear their ads on the radio and read their ads in the newspaper.  Unfortunately many of these companies charge large up-front fees and provide no meaningful service to their customers.  The bankruptcy judge has expressed deep concern over these companies and has said that there has been at least one indictment and conviction in San Antonio, Texas.  He has asked the bankruptcy bar (lawyers) and the Office of the United States Trustee to gather as much information as possible with the idea in mind of turning the information over to the Department of Justice for prosecution.  However, as with most things in life, you must protect yourself.  Before hiring a debt relief company ask for references and check them out carefully.  Beware of any company that wants large up-front fees (read the fine print) before they will do anything on your behalf.  Most importantly, remember if it sounds too good to be true - it usual is. 

 

 

Bankruptcy, The Answer For Your Business?

 

Have you ever wondered why doctors and lawyers ‘practice' their profession?  I have.  Today you have to be lucky to find a doctor that focuses on ‘healing' and an attorney that focuses on ‘selfless problem solving'.  It has been my experience that the word ‘practice' gives professionals the freedom to make choices that may not best serve our needs.  It's important to sift through the rhetoric and do your homework.

I 'm Sidney Diamond wife and I can often be his worst critic.  He leaves his clothes everywhere, almost never closes a cabinet door and is constantly misplacing his keys.  He's also brilliant and has more integrity than anyone I know. 

Case in Point:  I sat in on a free initial consultation with a potential client this week.  The gentleman was devastated about his state of affairs and at his wits end.  He started his business over 10 years ago, incorporated his business and now due to the economy his industry came to a screeching halt. I was impressed by how prepared he was for this meeting.  He wanted to know if he should consider filing a business Chapter 7 or a Small Business Chapter 13.  He had corporation papers, his lease, credit card statements, tax information; he knew the answers to all the questions asked and had all the documents that Sidney asked for.  He had several years left on his lease (which he did not personally guarantee), credit card debt and bank loans (which he did not guarantee).  Basically his business was in debt for almost $100,000 and the business had no assets to protect.  

Sidney recommended closing the business and walking away.  Bankruptcy was not recommended in his situation.  It was amazing to see the relief on his face.  His reality is still scary, he worries how he'll continue to feed his family, pay his mortgage and find employment.  Lucky for him he found sound legal advice.   

Lobbyists Win and Congress Screws Its Constituents

 

Parties in control of Congress change, politicians that control the parties change, but it appears regardless of which party has the upper hand, the one thing that never changes is the people behind the scenes controlling the show.   The bankruptcy  bill that would give some protection back to the consumer is now stalled in the Senate, on the other hand, provisions that give businesses additional rights in bankruptcy, especially against the average guy trying to hang on to his job and support his family, is quietly moving through Congress and will probably end up being approved.  There is also another law that received a great deal of publicity, when it passed Congress, dealing with the abusive tactics used by banks and other companies issuing credit cards.  There is now a new proposed law that has been introduced in Congress that would push back the time that the law goes into effect by several years. 
After you read this, I hope you are as angry as I am and you contact your representatives.

Credit After Bankruptcy?

 My general rule of thumb is a person will be able to obtain a credit card on reasonable terms after two (2) years of your bankruptcy discharge.  Now you can acquire an FHA loan to buy a house after two (2) years from your bankruptcy discharge. Take time in choosing your new credit card and mortgage because terms and conditions vary from company to company.  FICO scores are important to some while others value how long it's been since you were past due on any obligation.

Here are a few simple rules to follow to restore your credit:

• 1. Obtain a copy of your credit report within 90 days after your bankruptcy has been discharged. Make sure that all discharged debts have been removed from your credit report. If you don't want to do the required leg work - contact your bankruptcy attorney.
• 2. Be sure to keep your current debts (obligations) current and paid on time.
• 3. Start a savings program so that you can have a down payment available when you are ready to purchase a house.
• 4. New credit card charges should be paid in full each month.

These simple rules will allow you to improve your FICO score, prove you are responsible in paying your obligations, as well as demonstrate you are fiscally responsible by keeping your obligations low and finally have the ability to make a reasonable down payment on a house.

So, you can have credit cards and qualify for a mortgage to buy a house after discharged from your BANKRUPTCY.

Harassing Phone Calls From Creditors Can Be Stopped

A consumer being harassed by ‘Debt Collectors' has significant rights under federal law: including the right to demand that a Creditor stop communicating with you.   Under the "Debt Collection Practices Act", a federal statute, there are two (2) ways to stop those harassing phone calls or for that matter any form of communication to you. 

1- To inform the Creditor that you are being represented by an attorney and providing the Creditor with the name, address and telephone number of the attorney you have hired. The applicable provision can be found in Section 1692c(a)(2) of the Statute.

• 2- Write a letter to the Creditor informing the Creditor that you are not going to pay the debt and that you wish all forms of communication to stop. The applicable provision can be found in Section 1692c(c).