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In the midst of our
severe recession, we are receiving an unusually high
volume of calls from individuals and business owners
who are struggling with severe financial problems.
Before calling a lawyer, many have tried to go it
alone, with the result that they are at greater
financial risk than if they had talked to us
earlier.
If it is not too late,
in many cases we can help clients recover
financially without the need of filing bankruptcy.
However, even when we cannot, we can help with
pre-bankruptcy planning, as well file the bankruptcy
when the time comes.
The longer you wait to
get good legal advice, the fewer options you are
likely to have. Not surprisingly, even financially
sophisticated people often don’t know all of their
options; as a consequence, they cannot make educated
and informed decisions on their financial future.
Caution. One
option that financially distressed people should
pursue only with great caution is using a debt
relief agency. Debt relief agencies generally do not
have attorneys who work on your case; rather, they
will charge you a couple of thousand dollars, try to
obtain a mortgage and/or loan workout program, and
then, when they cannot obtain such a loan workout
agreement, will tell you to consult with an attorney
because you may need to file bankruptcy.
Even if these agencies
are successful in obtaining a loan workout
agreement, the agreements are usually very one-sided
(in favor of the lender), are poorly written, and
empower lenders even more than before. Frequently,
such loan workout agreements compel the client to
reaffirm the debt, which eliminates any chance of
contesting it.
Such agreements are
usually written by banks, and the banks are aware
that the person is likely to continue to have
problems in the future and will likely file
bankruptcy at some point. This is exactly what banks
want, since they get to keep all the money that was
paid under the terms of the loan workout agreement,
in addition to the collateral (in many cases) after
the person files for bankruptcy. Thus, all the money
that was paid under the terms of the loan workout
agreement is lost.
If you are in financial
distress, we can help you make an informed decision.
We can help you understand your options, develop a
pre-bankruptcy plan and, if necessary, file a
consumer bankruptcy. J. Phillip Glasscock, P.C., is a
debt relief agency. We provide assistance with respect to credit defaults,
mortgage foreclosures, eviction proceedings, excessive debt, debt collection
pressure or inability to pay any consumer debt. We help people file for
bankruptcy relief under the Bankruptcy Code. |
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Ten Common Mistakes Made By People and
Companies in Financial Distress
1. Failing
to involve your attorney from the beginning,
which leads to many of the following
problems.
2. Failing
to read and understand the documents
governing your obligations. Reading and
understanding the documents is critical.
Most people do not have the time, expertise
or experience to review and understand
concepts such as subrogation, joint and
several liability, non-recourse carve-outs
and the like. A good attorney can quickly
evaluate the documents and explain them to
you, along with your options, so that you
can decide how to deal with them.
3. Failing
to maintain periodic communication and a
good relationship with customers, vendors
and creditors. A good relationship can
mean the difference between lender
cooperation and a battle to the financial
death, in which the creditor has determined
to crush the debtor no matter what the cost.
Good attorneys know how to protect their
clients without needlessly antagonizing
opposing parties, and they know how to
respectfully disagree while keeping the
lines of communication open.
4. Focusing
on refinancing debt, thereby postponing
the day of reckoning but increasing the
problems instead of concentrating on
generating income and minimizing expenses.
You should be focusing on your business
affairs while your attorney works on your
legal problems. Don’t fool yourself into
thinking that your business will take care
of itself while you spend all of your time
struggling with legal issues.
5. Trusting
third parties who have adverse or secret
agendas, such as, creditor
representatives, commission salespeople, or
unlicensed up-front fee “consultants,” or
reliance on third parties without
substantial experience or legal
qualifications, and/or reliance on third
parties who have a conflict of interest.
Some of these third parties are either well
intentioned but misinformed, or they have an
agenda that may not be in your best
interests.
6. Failing
to recognize when the cause is hopeless
and bankruptcy alternatives should be
considered. You need competent and
experienced legal advice so that you will
know (a) when a cause is lost and (b) what
you can do to minimize your losses and
maximize your business going forward.
7. Failing to file for bankruptcy until all
the money is gone.
8. Using
exempt assets that could have been saved
to pay debts that could have been
discharged. Why mortgage your future for no
good reason? A good attorney can help you
preserve exempt assets from creditor claims.
9. Relying
on false assumptions. There is a lot of
incorrect information being spread by
well-meaning third parties, especially on
the internet. For example, there is a lot of
unreasonable excitement about short sales,
which many people think will relieve them of
their debt. However, short sales do not
include a forgiveness of the debt unless the
lender specifically agrees in writing to do
so. In the absence of the forgiveness of
debt, the lender can pursue the borrower for
the balance of the mortgage. A good attorney
knows this and knows what to ask for in a
short sale, loan modification, deed-in-lieu
or other solution.
10. Failing
to understand the legal and tax options
and consequences of past actions, future
actions or inaction. You can’t make good
decisions without good information. On these
important matters, having a good attorney
can make all the difference.
If you are experiencing financial or
business problems, make sure that you have a
good attorney working for you.
Call us today at
480-941-4359. |
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