I have been asked many times if I would go to law school if I had the chance to do it over again, and my answer has changed based upon how many years have passed since graduation.  My first year out of law school, I was a state supreme court law clerk and it was the happiest experience of my legal career.  My first two years practicing law (as an associate), I was furious because I felt that law school had not taught me anything practical and useful.  I was fortunate to work for an attorney who taught me so very much about practicing law, dealing with clients (as opposed to just reading cases in law school), and law office management.  I owe him a great debt.   Now, after 23 years,  I have a difficult time thinking of myself as anything other than an attorney.   I had other dreams, but I simply cannot conceive of whether I would have been happier going down a different road.

Nevertheless, I think that there are certain pieces of information that might have impacted my decision to go to law school if I had known them.   I share these with you now:

1.    Although I made many good friends in law school, it is not a place for the faint-of-heart, or people who are easily hurt or who cannot stand up for themselves or others.   If you are a quiet and soft-spoken person who dislikes conflict, law school will be three miserable years.  Additionally, you really need to think about whether the legal profession is your passion.   Too many people apply to law school because they simply cannot think of anything else to do.   If you fall into that category: keep thinking.

2.    Do not expect that you will graduate from law school with a complete knowledge of how to actually practice law.  Despite moot court, client counseling, legal aid, trial techniques, and all of the other activities and opportunities available in law school, it is simply not the same thing as having a real live client with real problems.   As an attorney, you are taking on a huge amount of responsibility.  That responsibility does not include winning an unwinable case, but it does include walking through the process with a client who may be sad, angry, delusional, depressed, unrealistic, or clingy.  Learning to navigate client relationships is the biggest challenge new attorneys face.

3.   Law school is law school is law school.   There are many people who shy away from applying to a small state law school.  They all teach the same basics, but the state schools are cheaper.  It is what you do with the education that counts.

I will write more about this topic again.

The flip side is that the debtor can only keep for him/herself those items of real and personal property that fit within either the federal or state exemptions.   Exemption means that the property is free from being taken by creditors (or the trustee on behalf of creditors).   Each state has decided whether they want to use their own state exemptions or the federal exemptions.   Exemptions vary widely from state to state.   Most states and the federal exemptions have an exemption for your home(stead) up to a certain amount, and then there are other exemptions for personal property, retirement pensions, etc.

If the debtor cannot fit all of his/her property into the allowed exemptions, then the value of what is left over must go to the Trustee assigned to the case.   The Trustee does not want your 1978 Pontiac, but if the $ 50 value is outside the exemptions, then you will have to “buy back” the property by paying the Trustee the $ 50.

The other issue in deciding if Chapter 7 is right for you, is whether or not you have disposable income.   If your take-home pay (and any other income) is more than your monthly living expenses (including yearly bills pro-rated to a monthly basis), then you have disposable income, and you may be required to file a Chapter 13.  More about Chapter 13 in a later post.

1.   Do I have to list (discharge) the debt to my uncle Pete/  My Hometown Bank / etc. ?: Yes!  You have to list ALL of your debts and ALL of your property and ALL of your income.  Why?  Because it is the law and you do not want to know all the things that can happen to you if you don’t list everything.

I do not believe it is shameful to need to file bankruptcy.  If you are caught in circumstances beyond your control:  huge medical bills (with or without health care insurance), post-divorce loss of income,  lost employment, and financial disasters, then there is no reason to blame yourself.   Wages in this country are stagnant and have been for some time.  Unemployment is high.  Many people are still struggling with mortgages that they were encouraged to take on even though they could not afford them.  None of these are situations that most people can plan and prepare to handle.

There is plenty of blame to throw around for the current economic situation, but blame, like shame, does not change much.  The authors and beneficiaries of the sub-prime mortgage debacle are already back making more money than ever, with increasingly slight chance that anyone is going to be held accountable.  So, what do shame and blame have to do with bankruptcy?   No more than with any other problem we face as humans:   when we make mistakes, we need to learn from them and then move forward.  Change what can be changed and let it go.

If you are considering bankruptcy, then look at why you are doing so.  If your financial situation is in whole or in part because of poor decisions that you made, then consider what you can do to change how you make financial decisions in the future if it is within your ability to do so.  If filing bankruptcy to obtain a fresh start is part of that change, then please do not let feelings of shame or blame prevent you from doing what you need to do.

For example, I know that I started off 2010 with a deep commitment to cooking evening meals that would be healthy, nutritious, and made from local vegetables and meats.   I did do some of that, but I know when I go through those receipts, I am going to find too many for meals out.  Painfully going through those receipts and seeing how much money we spent eating out is necessary to renewing my commitment to eating at home.

Reviewing the past year financially is also necessary to seeing where I placed importance.  I know that I spent TOO MUCH on my children for things that were not necessary.   Really, how many shoes does one 20 year old need? even if they are really cute shoes?   So, perhaps I need to find another way to relate to the college kid besides retail therapy.

This is my time to make the budget for the next year and readjust certain line items.   If hubby and I want to take a trip together this year, that money needs to be saved now.   If the old station wagon is going to need two new tires, then I better put in an auto repair and maintenance line in the budget.   I can’t foresee all that we need to plan for, but a thoughtful review will help me get most of it.

Too many of my clients who come in do not know where their money goes.  Many of them have bills that far exceed their monthly income, but not all of those bills were necessary expenditures –  much like those last pair of really cute shoes that I bought Daughter No. 2.   She wanted them and liked them, but she didn’t really need them.   Being able to distinguish between needs and wants is an important first step in gaining control of your finances.

Best wishes for a new year of healthy financial decision-making!

If you borrow money from a bank and they take a “blanket” lien on all of your property, and proceeds, this means that you have to account to the bank for money that you have come in.  Yes, even that small inheritance from Aunt Jane is not really your money to spend if you have signed an agreement with a bank that gives them rights to all the money you receive.   Maybe they will agree to only take part of that inheritance, but you OWE the bank and you AGREED to the lien.

You are presumed to know what you have in your bank account and failure to balance your checkbook is not going to get you very far if you bounce a check without overdraft protection.

I could go on and on, but the point it:  every adult in this country has a duty to be aware of what they are agreeing to do — what they are legally committing themselves to do.   If a person agrees to an adjustable rate mortgage, then that person has to be prepared for their mortgage interest rate to change.  If a person signs up for a credit card that charges 28 % interest, then that person has to be prepared to pay that much interest in addition to repaying the amount borrowed.

So, one tip to avoiding having to file for bankruptcy:  be aware of your legal obligations and read before you sign.

Obviously, you want someone who is licensed to practice.  That document should be hanging on some wall somewhere in their offices, and if you have any questions, ask them.   Second, you need to decide how important it is to you to have an attorney with lots of experience.  It might seem obvious that you would, but attorneys who have practiced for many years can fall into ruts and start to see cases as falling into the same, old categories, and the same, old responses.   Younger and/or less experienced attorneys can bring energy and interest to a case, but may be hampered by not recognizing pit-falls or problems that a more experienced attorney would.   Which is best?  Depends upon the case and the difficulty of both the facts and law.   You would probably not hire a brand new attorney to represent you in a murder defense, but that same new attorney might do as well or better in representing you in a drunk-driving charge.    Bankruptcy law is a complicated combination of federal law (and sometimes state law) and federal process which is not for either the faint-of-heart, nor the inexperienced.   It is an area that requires hard work and tenacity and problem-solving.

The other recommendation I would make to anyone seeking an attorney might sound contradictory at first, but it isn’t.   I have been represented by an attorney twice in my life and while their experience and ability was very important, what I most remember about them was their objectivity and their understanding.   The objectivity is necessary to help the client see and understand the other positions involved in the matter.  Unless you understand the pros and cons of the other people and entities involved, you cannot hope to help your attorney with your case.   And the understanding is necessary for the attorney to understand your case … not always agree with your position, but understand you and your positions and beliefs.   I have heard from too many clients about previous attorneys who clearly could not or would not identify with their own client, even on a human level.  You don’t need your own attorney making you feel inferior.

So, who are the good guys?  Like beauty, it is in the eye of the beholder, but the beholder should decide what is most important to them when they start looking.

try and extend their impossible financial situation through the Christmas season in order to give their families

a “good” Christmas.  What they really mean is an expensive Christmas.   Not only is it NOT in your best interests

to charge on your credit cards in the three months prior to filing, it is not a good start in  how you

change spending habits.    Even before a debtor files, he or she or they can begin to make changes to how

they budget their income and expenses.   As an ordained minister, I would add that Christmas, which still is

considered a religious holiday, is not about money or gifts, it is about love.  Even if you consider yourself more

of a secular Christmas person, you should consider whether expending money (or credit) that would be better

used for basic living expenses is the lesson you want to teach your family about this holiday.

his wages are being garnished.  Unfortunately for him, he did not even know he was being garnished

until money started being taken out of his paycheck.  How could he not know?  Because he never picked

up the certified letter the creditor sent to him that had the garnishment notice inside.

               Many people are under the wrong impression that refusing to pick up a certified letter will somehow

make legal problems go away.  It won’t.   In certain legal proceedings, one party may serve legal papers

upon the other party by certified letter.   If the party receiving the letter just refuses to sign for it, or just

ignores the postal service notice, all they do is insure that they don’t know what is in the letter, and possibly

increase the costs of service for the other party.   A creditor who can serve you by registered letter, can also

serve you by personal delivery of that same letter by the local Sheriff.   In some cases, the other party does

not even have to do anything more than show that they tried to serve you, and that is all they ever have to

prove.   Ignorance is not bliss, and can even reduce or remove your opportunities to respond or object to

whatever the other party (or the creditor) is trying to do.    So, even though it may be unpleasant to get that

notice that you have a certified letter, and even if you are worried about the contents, DON’T ignore the notice.