Fail to Succeed

Hey Debtors- Got some bad news for you. It's Monday! So let's just do it, and get a fairly dry topic out of the way: what happens to community property in bankruptcy. I could record a very long episode and write an entire treatise on this one subject, but we'll keep it under eight minutes instead! Episode contents- 0:05 Hello! Introductions 0:46 Today's topic 6:08 It's a wrap; see you tomorrow A (very) brief introduction to community property Community property is a legal concept that comes up for those in most Western states, and two oddball states: Louisiana and Wisconsin. The general concept is as follows. Anything you owned before you were married is separate property, and anything you acquire during marriage is community property. If and when you separate, then anything you acquire becomes separate property. Similar rules apply to debt as well. (There are a lot of details here, but those are the general rules). What happens in bankruptcy? If you both file together, then community property may never come up as an issue since all your separate property AND your community property is going to become part of the bankruptcy estate. (Same with debts.) If you're filing separately, however, things get a little more interesting. The general rule is that all the community debts AND the community assets "come into" the bankruptcy, even if the other spouse doesn't file, which could mean a lot of things for how you might plan your bankruptcy case. Listen to today's episode to hear me bumble through the issue!

Hey Debtors- Today is Friday as I write this on the Fail to Succeed blog. We're talking about what happens to a realtor's license in a bankruptcy case, as well as some of the other things to think about that apply not just to realtors but other professionals as well. Podcast Contents: 0:05 - Introduction 👋 0:45 - Our topic of the day 6:28 - It's a wrap Realtors in bankruptcy You may never have heard this, but there are some parts of the bankruptcy law that actually say you can't be discriminated against just because you filed for bankruptcy. Now those laws aren't, you know, really comparable to the anti-discrimination laws over someone's race, gender, or religious background, but they do apply in bankruptcy to some situations. One is government licenses. In today's post, I talk about an answer I gave on Avvo to someone who said this: If I file for bankruptcy (Chapter 7) would it affect my NMLS license in real estate and are there any disclosure requirements with regards to renewal, to my broker, etc.?  So here, I think what the original poster meant was, "can I keep my license to sell real estate here in Los Angeles?" The other attorneys were largely correct to say, "yes, probably" and I just weighed in with a few additional points to consider since the person asking was a realtor. First, realtors are one of my heroes. They're out there grinding, living on commissions. Many of us dream of doing it; few follow through. Second, realtors have unique bankruptcy needs. Their debts are possibly different, and the might have open contracts that become part of the bankruptcy estate. Finally, they have the opportunity to pick and choose among the contracts they're under and which ones they want to assume or reject. This could be useful if they're under a brokerage contract they want to get out of to get a fresh start, for example.

Hey Debtors- Today we're going to talk about California's latest, refreshed lockdowns and what it might mean for the economy. We'll also talk about the forms and papers you need to deal with in bankruptcy, which a lot of people aren't quite prepared for and freaks them out a bit. Finally, I'll plug my law firm's new website! Audio contents: Introduction. Say hello 👋 (0:05) California lockdowns (0:46) Bankruptcy has a lot of forms (5:13) New website! (9:52) Seeya next time! (11:01) California locks down. Again. Our first topic is the latest round of California lock downs. It's well known that cases are going up, but are some economic considerations beyond the case counts too. First, the $600 additional federal unemployment runs out next week, July 25 I believe. Second, the eviction moratorium picture is a little unclear. Third, and most importantly, there isn't the national unity today that there was back in March. So I don't think there's anymore federal money coming anytime soon. Consequently, the economic effects of Governor Newsom's latest actions will fall most heavily on entrepreneurs and minimum wage works, without much help this time. Everywhere in the news you can read stories about the sick or unemployed, so I feel like I need to talk about the entrepreneurial spirit--since nobody else seems to tell that story. Bankruptcy has a lot of forms I raised something in this podcast that I'm not sure I've ever heard anyone explain: bankruptcy requires you to fill out a LOT of forms and provide a lot of paperwork. Forms aren't a big deal, but there's a psychological effect to it all. They catch a lot of people off guard (as it did with this one Redditor). Up until the time they decide to file, they've been thinking mostly about whether they should or shouldn't file. Once they've made the decision, they're faced with a huge number of forms and disclosures, which I think can be really unnerving. As I implore you in the podcast, don't worry about it. Nobody is trying to judge whether you're worthy with those forms. It's just a process to make everything clear in case there are any assets anywhere that might be available for creditors (and qualifying you for Chapter 7 over 13). It's one small substep in your bankruptcy process, which is, don't forget, a step in your process to success! New Website! This is a little indulgent, but I finally got a new website for my boutique bankruptcy law firm, Sidewalk Legal! I think it looks pretty sharp. Wanted to tell you about it in the podcast. Stop by and I'll get a little alert: say hi! I'll try to say hi back. Finally, my apologizes for taking a while to hit the record button on this podcast. I'm trying to pull together a lot of things all at once: family, work, podcasts, blogging, websites, social media. How do people find time for this stuff? Oh yeah, they make it a PRIORITY. This podcast is brought to you by Michael Rice, an attorney with the boutique bankruptcy law firm, Sidewalk Legal, where he can be contacted with questions. It's for information purposes only!

Hey Debtors, Today we're on our fourth episode, still experimenting with audio and whatnot. In today's episode we're going to talk some more about the trustee, the experience of talking to the trustee at a 341 meeting, who they are, and what their role is. In today's episode, we talk about one Redditor's experience with a "jerk" trustee. He or she said: The Trustee was a total jerk, I had joined the call about 10 minutes before mine was scheduled. The trustee was speaking to other people with so much hostility. When they were finished, I believe there was someone else that was supposed to join at the same time my call was scheduled. But I was unsure if they were referring to me due to a misunderstanding. So when I unmuted my phone to offer assistance, he barked at me. Hey look, this is just one stop on your way to success, so don't get too hung up on it. Some of the trustees are, shall we say, a little cold and maybe a little grumpy. But they aren't there to pass judgment on you or your bankruptcy case. That said, I get it. They can feel like jerks, however, I get it. This is the first "official" who's really looked at your case other than your lawyer. And you have to go to this meeting where all your financials are just laid out bare before the world. Maybe you feel a little guilty. Maybe you feel like this person is judging you. You're going to be paying a lot of attention to their body language, vocal tone, etc. They aren't actually judging you, however. Let's talk about their role for a second. The Chapter 7 trustee isn't there to think about whether you should or should not have filed. They aren't there to judge your situation. They are there to see if there are any assets they can "administer," which is to say, liquidate and give money to creditors. But, as I explain in the episode, there are a lot of financial hurdles that have to be crossed to get to that point: your exemptions, your secured creditors, the fees and costs of selling assets, their own fee, and the money that has to go to creditors. The trustee only gets a small, nominal fee per case unless they can find some assets that can cross those financial hurdles. This is why they call most cases "no asset" cases. It means there's nothing the trustee could find to give to creditors. So of course they might get a little grumpy from time to time. But that's not about you. It's about your assets, or a lack thereof. The meeting usually only lasts a few minutes. Just do it, and stay focused on your long term success. If they behave badly, that says more about them than it does about you anyway. To your future success!  

Hey debtors, This is episode number three. Do you depend on your cellular phone every day like I do? Like everyone does? These days our phones are really our primary computers. We depend on them for access to our digital lives. Everything from appointments at the DMV to staying connected with our friends on Insta, without our phones we'd almost disappear from our social and economic world. In today's episode, I'm exploring what happens to your phone, your cellular phone service, and the unpaid balance on that $1,099 Apple iPhone 11 Pro Max that you financed through your cell phone company when you file for bankruptcy. 0:20 Welcome to the podcast! 0:55 Our topic! 9:40 Outro Listen to the podcast for more episode (link below), but there are three things to consider. First, is the question of whether you can keep the phone at all. The answer probably is an easy yes. Even if you did drop over $1,000 on the phone, it's surely not worth nearly as much now. Even if it's an Apple device you just picked up a few months ago that's still fairly valuable eBay and, for some reason, your exemptions can't cover it, the trustee would still need to pay off any unpaid balance on the phone, find some money to send to creditors, and still earn a reasonable fee for doing so. Consequently, in the vast majority of cases, it's probably not going to be worth it for the Chapter 7 Trustee to give it much thought. Second, the contract for cellular service is worth exploring since your phone isn't all that valuable outside of a wifi hotspot without it. Since it's an ongoing contract, it's usually considered an "executory contract," which means you can choose to keep it active. This is key for a lot of us. But on the other hand, you might decide you've got a really lousy contract that you want out of. A lot of the cell phone companies lock us into multi year contracts in exchange for financing our devices (is that actually a deal?). So if you want out, bankruptcy might be your time. Remember, the idea behind bankruptcy is not just discharging debts but to get you a fresh start, which might also mean cancelling contracts that no longer make sense, whether they're apartment leases, car leases, cellular phones, or almost any other contract your in that's going to be a burden going forward. Finally, there's the question of any unpaid balance on the phone. Like a car, unless you paid cash for it, you probably financed the phone purchase, and you probably owe more than it's worth (just like a car). So, if you were to give the phone back to the company (assuming they'd take it), any difference between what it's worth and what you owe (called a deficiency) would be discharged in the bankruptcy. What prompted this podcast was a Reddit post that seemed to indicate that Verizon was charging a customer, after the bankruptcy, for the deficiency. This would have been a huge violation of the bankruptcy discharge and/or automatic stay laws, and I mentioned in the podcast. UPDATE: As it turns out, it seems that Verizon was actually just discharging any unpaid balance and letting the customer keep the phone "free and clear"--NOT charging the customer for the unpaid balance as it was originally presented. Who would expect a company like Verizon would want to contribute assets to your fresh start?

Episode number two! In today's episode of the Fail to Succeed podcast, we explore two real life situations. In the first, a realtor in New York racked up $217k in debt and is trying to figure out whether to file in New York or their hometown of Austin. In the second, someone who inherited a house is trying to figure out whether to sell it before filing for bankruptcy. Contents for today's episode: 0:20 Welcome to the podcast! 0:55 New York Realtor is $217 in debt. Where to file? 7:28 What to do with $50k in home equity? 14:46 Outro $217 in NYC Debt. "Helllppp" In 2017, a NYC realtor charged up $40k in credit card debt while she had a high paying job before she was a realtor and lived in Austin. She lost the job, and took a few lower paying gigs. She refinanced the $40k with personal loans that grew to $80k. Probably frustrated, she took a chance, moved to New York City in 2019 to start her real estate career. Seems her career was doing something over the past year, but it takes a long time to build a successful real estate practice. Then, a year into her new career, the government shut everything down for the coronavirus. Now, she's moving back to Austin and trying to figure out where to file for bankruptcy. First of all, I think it's amazing that she took the chance and went for it, as I posted on Reddit. I feel sad that her career got shut down before it really got started. One victim from the pandemic has been how these forced closures will damage the entrepreneurial spirit, but few tell that story. We take the entrepreneurial spirit for granted in America (and sales is bedrock to it). The Great Recession did a lot to damage it ten years ago. The recent government shut downs will cause yet more damage. There are many tragedies in this story, and this is an untold one. I desperately hope she'll restart her journey after the bankruptcy case. As for where to file, there's a 180 day rule about where you should file that has to do with residency and other factors, but it's a little complicated, and there might be some advantages to filing in New York now or waiting a few months and filing in Texas, but she's going to need to talk to a lawyer. Listen to the show for more details! What do to with $50k in equity? So here's an interesting story: a guy with a lot of debt (not sure how much) inherited a house, along with his brother, inherited his dad's house, which his dad owned free and clear of any mortgages. If they sell the house soon, they could each keep maybe $50k, which implies the house is worth about $100k, which isn't a lot in today's real estate market in most part of the country. According to the poster, $50k wouldn't "make much of a dent in the debt," so they must owe quite a bit. The question is whether he should file the bankruptcy case now, or wait until after they sell the house. In my response, I went on a fairly long description of the bankruptcy estate and how it works, but another commenter had the better point of view. That commenter suggested the $50k could be used, with careful and patient bankruptcy planning, to help create a much better future for him either through equity in his or her house or retirement, or something else that would contribute to his future success. That was pretty great! What do you want me to cover? What are you thinking about? Share Your Idea or Feedback  

Released! 🎉 I've got some audio issues, to be sure, but I think it should (hopefully) be easy enough to listen to. It's episode one!! In today's first issue, I'm talking about a few things. First, three cases from the pages of Reddit (so it's all public information), and then a short rank on why bankruptcy matters to your success. The first case I talk about is a great case to introduce the podcast because it encapsulates so much of what I talk about in the bankruptcy system. A poster on Reddit said he or she was "planning to file, [but] terrified of being treated like a criminal." Specifically, the debtor said: Reading and reading and reading and from what I am able to discern is that filing for Chapter 7 is akin to some sort of criminal proceeding. That the few folks that are trying to abuse the system have basically made it a nightmare for folks that are honest and want to file. I am terrified the trustee will find something I missed (I have gone over my petition info to the point I am not sleeping trying to recall any and everything I can think of... I commented on the thread, but in retrospect, I wish I had done a lot more to acknowledge the emotions in the post. This person, I think, is putting all their emotions about the bankruptcy, how they got here, some of the morality or guilt in the process, and, since the trustee is really the first (likely the only) official in the bankruptcy process they'll ever talk to, is putting all that emotion into that one meeting. I did say the following, but I wish I had said more: What I do sense (could be wrong) is that you’re mixing all the stress, anxiety, and confusion about your debts, the morality of it all, what people are saying to you, what you’re reading on the internet, and, most importantly, your uncertainty about the process and what happens on the other side. The point is not to focus on the past and how you got here. I hope the poster will walk into the trustee meeting and proudly look forward to the future and how he or she is going to be more successful than ever. Guilt and pride don't coexist happily together. The next case involves something called a 2004 examination. The debtor in this case said that years ago... When I got married, we bought a small house from a family member of mine. I got divorced in 2017 and we sold the house back to the same family member together after the divorce. Neither of us could come to the conclusion of who wanted it and it isn't exactly worth anything so that was the easiest and quickest option. So in this case, the creditor is looking for some more information. That's what a 2004 examination is all about. But no decisions get made during that process, and it's a super unusual one for the vast majority of people in bankruptcy. Given what he said about the nature of the transfer, I wouldn't be too concerned right now. The third case was someone who finished a bankruptcy case and was looking for some ideas about how long it would take for a credit report to get updated. I was curious why he or she was so interested in getting it updated so quickly (as in, I really was curious and not judgmental at all) and got some interesting responses. One person said they got really interested in monitoring their credit stared out just being curious about how easy/hard the rebuilding process would be, then after a few positive jumps in points I researched more and became more proactive. I ended up with about a 200 point jump before our discharge was complete, which was very surprising. It’s been pretty steady since our discharge in January, but we’ve been able to obtain unsecured credit, get increases in that credit and start to show immediate positive behavior on our reports beginning from the day after discharge, which hopefully will help getting back to 750-800 sooner. Finally, I end with a rant about why bankruptcy is so important to success, but you'll have to listen to the episode, which you can do here:

The trailer for the upcoming show! We're going to talk about the worst case financial scenario in depth: bankruptcy. The more you know about it, the less scary bankruptcy becomes, and the more successful you can be.  I believe that the more you know about the worst case scenario, the bolder you'll be. To learn more about our mission: https://failtosucceed.net/mission Please send us some feedback: https://failtosucceed.net/feedback Even negative feedback is a gift. Here's to your success!