Bankruptcy 101: Clearing Finances

Meet Austin Bankruptcy Lawyers Team!

Those of you who have been following us for a while know Josh as Kate’s husband, but Josh is also the manager of our bankruptcy division at Austin Bankruptcy Lawyers which was a side practice that we launched last year in 2020.

After the pandemic hit, we started looking for financial resources for our Spanish-speaking clients on the immigration side and realized that there was really a lack of good information and representation and so we started thinking about bankruptcy.

What you already know in full disclosure, maybe our attorney Kate is not a bankruptcy lawyer, she doesn’t practice bankruptcy law, but at Austin Bankruptcy Lawyers we have to recognize the amazing lawyers we’ve had in our team to help as much as possible to every individual who might be in need of help.

At our firm the people who handle the bankruptcy cases are:

Amy Aaron, our paralegal, has been doing it for 20 years.

Josh, who’s devoted to the bankruptcy practice and helped Kate to learn more about this part of the law.

Covid Is Changing, Again

We all know that the Covid protections are really starting to go away and the things that have kept people financially secure through the pandemic are starting to disappear.

We’re noticing a lot of increase in phone calls and frantic and panicked people who are considering bankruptcy as a solution to their financial problems.

Here, in Austin Bankruptcy Lawyers, we think the thing to consider or think about is you know by calling us for a bankruptcy consultation it’s free, and it will give you access to know what your real options are.

What Happens During A Bankruptcy Consult?

Our consultations are virtual and it’s completely confidential to know whether you should even just explore it if you are at a place where your monthly expenses and bills are higher than your monthly income, and you just don’t know what to do.

A lot of our client’s concerns are waking up in the middle of the night in the morning when they’re feeling stressed. They just don’t know how they are going to get them out of this mess.

If this is currently happening to you, the moment when you pick up the phone and can just call us, you will explore that we’re not going to push you into something that’s not in your interest, we’re going to share the necessary information with you so that you can make an informed decision about whether bankruptcy is a solution.

Financial Struggles

Let’s talk first about someone in a position like this one. If someone is in a stage where they’re like: “I’ve got medical debt, credit card debt, (all of this debt that I can’t pay, it’s not like I can lower my expenses, I just have this debt that I can’t afford to pay on or I can’t afford my rent; I lost my job; I’m getting an eviction notice.”

They are in this place where they really need help and they reach out to us for a consultation.

“Sure it’s important that we get to know the potential client, the individual who’s contacting us not just as a matter of numbers but we need to know what their family situation is like.

How many people are in their household, who’s working, who’s not working, what are your sources of income, and most importantly, what are your goals?

Do you just need to be able to get rid of some credit card debt to be able to meet your other needs or are you trying to hold on to your house?

Have you fallen behind on your mortgage payments and are you getting bombed down by the IRS?

Do you know what is the crunch point?  What is really hurting right now, and what do you want out of it, and then we’ll ask some pretty detailed questions about the different kinds of debt in bankruptcy.

There is a secured debt which is anything that could be taken away if you don’t make those payments that would be like a car loan or a mortgage.

Sometimes it can be a title loan if you’ve put up anything as collateral for a personal loan.

Those are all secured debts.

There’s this special little carve out of kind of debt called priority debt, and that is if you owe taxes, recent taxes if you owe what’s called domestic support obligations, so spousal support or child support and if you’ve had a business and you owe your former employees any benefits or any wages.

Everything else is general unsecured debt. Those are treated differently student loans are general unsecured medical debt credit card personal loans friends or family loans all of those get treated a specific way.’’

We’ll ask a lot of detailed questions about those kinds of debts and see how bankruptcy can really achieve that goal that we talked about at the beginning.

Bankruptcy 101 For Immigrants

At Austin Bankruptcy Lawyers, we encourage people to immigrate to the United States and to engage in risk, like by starting businesses, by investing in things you know and love, by talking, by being brave.

Go and chase the life that you want for yourself, and for your children. There is no shame in bankruptcy because it is a tool that encourages people to live full and complete lives.

But we also understand that for some people there is a lot of privacy around this and shame as well.

How Many Times Can You File For Bankruptcy?

Some people feel like it means that they have failed, and so a lot of people want to know if they file for bankruptcy, how private or public that information is. Today, everybody on our vlog is going to know that.

Our specialist in Bankruptcy said:

“Absolutely, I completely agree with you. There should be absolutely no shame around this. It’s a financial tool just like any other financial tool that you might use.

A retirement plan or anything else like a savings plan that you might have.

This is just something that’s afforded to you. It’s like you said it’s older than dirt, it’s thousands of years old, it’s in the constitution so it was considered at the founding of our country.

So as far as I’m concerned you will never hear shame from me and actually the bankruptcy court when you get through the system.

There’s not going to be anybody asking you to justify this decision, it’s really just nuts and bolts.

How are we going to manage this if nobody’s going to ask you why you decided to make this choice and as far as how private it is when you file your bankruptcy petition you’re filing it in federal court and court filings are considered public but in reality, you really have to go looking for it.

It has to be something you have to have access to what’s called a pacer account that’s the federal filing system. Your financial institutions will know but it’s not published in the newspaper if there’s no bat signal that goes over your house it can be very private.”

Debunking Stigmas Of Bankruptcy

Let’s talk about the stigmas of bankruptcy and what sort of some of the beliefs are around bankruptcy.

It means that someone you know got themselves in over their head or they were too risky or they were irresponsible.

These are the big ones that people here would like to know, and let’s debunk some of those stigmas and maybe you could talk to our lawyer  a little bit about it.

Not anyone in particular but in general knows who our clients are and what has happened in their lives to get them in the situation.

“Absolutely, statistically, 68% of bankruptcies are caused by medical debt so it’s not a personal failing, it’s not a moral referendum.

They’ve had some kind of medical event that happened and that’s not in their control so 68%, that’s a huge chunk two-thirds of bankruptcies are filed because there has been a medical event and bills that are out of control.

What I see is people have had some kind of life event that changed their trajectory so they lost a job or they had a parent who was sick or they had a baby who needed some extra care at home, something like that.

Usually, job loss is an interruption in their monthly income.

We also had a worldwide pandemic and erupted in their monthly income and while they may have taken out a credit card or paid for a car when everything looked fine, it was a perfectly reasonable decision when they did this.

All of a sudden there was some unforeseen issue.

They came down with cancer, they lost their jobs, something happened that interrupted their life trajectory and they grew behind on their bills.

The stigma often comes from the clients themselves. Nobody beats ourselves up worse than ourselves.

It’s not other people but it’s also the creditors they want you to feel bad they have a reason they want they want their money and so that’s where a lot of the shame comes from, and like I said at the beginning I just don’t think that it’s warranted, it is just something that needs to happen.”

Bankruptcy Improvements

During the session of today’s blog, we’ve had a lot of important questions and we would like to discuss them all with you, so you can have a better idea of this topic.

“We love what we do and I think I can speak for you Kate, this is a passion thing, this is something I mean you can tell that I do get technical with bankruptcy because it’s fascinating doesn’t everybody love talking about the bankruptcy code.

So yeah you all do contact us even if it’s just a quickie poo little question, happy to help.

That’s what we like to do for sure.

Special thanks to our attorney Josh who said this:

‘’Really glad you had me, thanks for including me here. I know I didn’t participate a whole bunch because we’ve got the smart lawyers here involved.

I think it’s just important to remember that Kate used these words a handful of times.”

It’s important that you don’t think of bankruptcy being as ending in a bad way.

Bankruptcy is something that is a financial tool and it’s a good thing and so remember these things, and if there are any other doubts any other preconceived notions that you want to clear up contact us let’s talk through it.