Hello, everyone. Thank you so much for joining us again on “This needs to be said”, our friend, attorney, Christine Kingston is here, who will be Christine from this point on she’s here to help us talk more about bankruptcy and the economy. We’ve talked about several things. So if you’re listening for the first time to us, this is part four. I think it’s a part four of this conversation of COVID the economy. People are not filing bankruptcy, maybe not knowing that there are options available. So I want to, I want to begin again, welcome back, Christine. I want to start with options because I think the biggest thing that I’ve found to be magical, like in anything is when I thought I only had one way and I sit down and I’ll say, well, what if I could, what if, and then you come to find out many of the things that you said, what if about some kind of way it can be done.
Maybe not exactly down to the letter of what you’re wishing or hoping, but you got more than, that one option. So I want to go back and talk or actually pick up from there with options. Absolutely! Yeah, there’s really, it’s not rocket science, but I think I, I couldn’t agree with you more than most people believe that there are not, you know, there’s less options that are available and it’s because they’re not considering bankruptcy as an option. I want to preface the option conversation with, there is no stigma in bankruptcy, in a pandemic it’s perfectly acceptable in moments of disaster when all else fails. I think it’s a great solution, but let’s talk about all of those options, Katherine, right I think a lot of people right now, we’re starting with one of my favorite options calling do nothing. We can ignore the problem.
We can ignore the situation but there’s also a price to pay for that, right eventually creditors are going to call and come to Sue you they might garnish your wages when they get that judgment, you could lose your home. If they, you know, if we don’t deal with those, forbearances at some point and people get so far behind on those mortgages, they may never be able to recoup and recover from that. And so they might end up in foreclosure or repossession of a car. So doing nothing is great. If you’ve got nothing to lose and no assets, then sometimes doing nothing is the right thing and believe it or not. And I know, you know, people will be sitting there listening to this conversation going. I can’t believe she would recommend that. Well, some people, I do recommend that too, by the way.
And I would decline representation and I would recommend that they go out and do nothing for example, a person that’s solely on social security, social security income, it cannot be garnished. They cannot take that money. It’s creditor proof. And so those are the, about the only people that I would recommend that, or if they just have no income and no assets, maybe that’s the right thing to do for now you know, and that’s an option you could borrow more money and going into debt is right. Never a good idea when you’re trying to get out of debt, but that’s another option that we talk about, you know, borrowing more money, but what happens when the credit lines cut off now you need another plan. If you’re not able to get more credit and refinance or shuffle that, you know, play the shell game, like we used to do, then that won’t work forever and it’s not going to work for everybody.
But borrowing money is option. Number two, the only third option before bankruptcy is doing that credit counseling and debt settlement. These companies annoy me more than anything else because they got more marketing dollars than I do. And be a lot of people end up in bankruptcy even after working with them. Why because these debt settlement companies will not work with a creditor once they Sue you. And then they’ll drop that creditor. So let’s say for example, you owe a creditor $10,000, and you’re trying to do this debt settlement plan. These companies build up a cash reserve first. Well, what’s happening while you’re building up a cash reserve, you’re falling behind on your debt payments. These creditors then become, you know, they, they turn that over to a lawsuit and then these debt settlement companies said, well, we can’t help you. So there’s a lot of misrepresentation going on in that industry where they make promises and they don’t follow through on those.
And then people end up in bankruptcy anyway, because at one creditor falls off the plan. So it’s not a plan that handles that we’ll take care of all of the debt. And I think people don’t understand that there’s a, another way of making a payment plan. So if you’re looking at debt settlement, you might want to also consult with a bankruptcy attorney because there’s something called chapter 13 of, excuse me, chapter 13 of the bankruptcy code and, that is a payment plan, bankruptcy that stops the creditors from suing. It gives them a sum, certain of payments, and it stops interest from accruing. And if they’re not paying back all of their debt in a chapter 13 payment plan. Bankruptcy the rest of it will be included in the discharge. You know, there are certain deaths, obviously that will ride through the bankruptcy. That’s why working with an attorney is very important.
I think chapter 13 is a way better plan than those debt settlement plans, but the general public doesn’t see that because I don’t have the marketing dollars that these large nationwide debt relief companies have. And they’ll want to convince you that filing bankruptcy is worse. They’re the ones, probably the worst culprits now than anybody else. They don’t want you to file bankruptcy because they’re trying to get their money and get you to pay more. And so I think lack of knowledge is there’s a price to pay for that for the general public. If they went out and started asking a bunch of questions, they would probably pick up on a few of these tips and tricks that you and I are talking about. They could save time, they could save money and they could move on with their lives, which I think is what’s most important.
People want a house or they want to save for college. If anything, right now I think college tuition is even down you know, whatever the financial goals are, retirement, you know, we need to take action to get there as quickly as possible. And debt is not the way to get there, you know And that’s, well, I think that having those options, being able to lay them side to side, and then some of the things that you shared saying, okay, on the do nothing method, you may be in a situation because it’s not just, I don’t feel like doing anything. If I’m not going to have to worry about my money being garnished, then that may be fine for me to do nothing. But I, when I was listening to you with the free consultation, I think that that’s something that they would learn talking with you and kind of reversing near it.
Like you would be their absolute last, you know, move, but you could be their first call and they can say, okay, well what are my other options You know, sometimes we don’t know what to say, cause maybe that’s why they didn’t tell me because I didn’t ask what are my other options. I remember hearing about chapter seven and chapter 13, but I don’t know if there was anything I just, and maybe it just was the feeling they may have said exactly what you’ve said. Maybe they did tell me about life after bankruptcy. I don’t know. I don’t remember. I don’t remember any follow-up I just remember waiting for, I believe seven years for it to come off, but you had to wait there too. You know, bankruptcy may not be the first choice, but talking to a bankruptcy attorney should be on the list of first things to do.
And then because I’m setting up a strategy for them, I’m listening to their, their situation, right I’ve got to understand what are the assets we’re dealing with What is the income that we’re dealing with and then how much debt do you owe And then I sorted out by type of debt, right Is it a priority type of debt because I’m looking at it from, well, what is the best choice for them If they’re going to end up in a bankruptcy under chapter 13 of the bankruptcy code, and they’re going to be forced to pay up back a hundred percent of their debts because they’ve got assets to lose, well, then maybe they want to do that settlement. Maybe they want to talk about debt negotiations. Maybe they want to do something different other than bankruptcy. And I don’t sell bankruptcy. This is not like I’m pushing bankruptcy as a solution.
It’s a great solution. It is not a one size fits all. It is not for everyone. And I think the only way that people can find out whether or not it’s the right solution. And if there’s another option is to talk to a bankruptcy attorney and get that free consultation. I don’t know any one of my colleagues that would not give 30 minutes to a perspective client for free right in our bankruptcy world. And I know you’ve talked to, many of my colleagues, we would all do the same thing. It’s a brief pick up the phone, get some legal advice and set a strategy for yourself so that you, at least if you’re going to do nothing, you’re comfortable in that decision. And I think that’s the better part of it. Right! If you get that, yeah know what you’re doing. If you’re going to let things go, at least, you know, I know what I’m doing, nothing.
All I want is for the public to be well-informed because I know that the public, we don’t teach financial literacy in. And we don’t give that as part of the education, even in the higher, you know, the higher institutions of learning, you know, that they charge you extortion fee. Tuition is going up by 230% over 15 years don’t get yourself in a bind. You know, we sort of make better decisions. And I think it comes from revamping education, but we could go on, Oh wow. So quick people, people will go into debt one thing. And that’s what really is that what’s heartbreaking the most is people will pay more money for their choices without knowing that they might have another choice out there. I like to do what’s called cost benefit analysis with perspective clients. How much is it going to cost you to get out of debt And what’s your benefit How quickly can you get where you need to go And I think what if they take the emotional component out of it, bankruptcy is a business solution. It is available and people need to understand that it’s there for a reason. Yes. And you know what we are that we we’re at the end of our time. Again, that sounds sad.
That sounds sad. Christine, you tell them how to get in touch with you outside of “This needs to be said’, always Katherine, Christine Kingston here, Huntington Beach, California. I am in Orange County. The website is surf city lawyers, which is www.surfcitylawyers.com. You could give us a call at the office (714) 533-9210. We’re serving, LA Orange County and those surrounding areas. Thank you, Katherine. Thank you, Christine. And until next time have a super day.