I’m generally not known for being able to give coping tactics on financial trauma, but there is one thing I know for certain, knowledge is power and the more you understand about your financial situation, the less uneasy you will be about it.  If after this article you still find yourself in need of some more help (there is nothing wrong with that, everyone needs to talk to someone at one point or another), check out my friend James Valeri’s web-site Jim Valeri, Counselor for more ways to cope with debt stress.

The focus of this article will be aimed towards the employed person or the person who works for themselves. My best suggestion to the person who finds himself unemployed is to treat his or her job search is a full time job. It’s cliché, but it works, and I’ve never been unemployed more than six weeks when I made looking for a job a full-time job.

For whatever reason, people find themselves under financial burden, and while a lot of the times these injuries were self-inflicted, the point here is not to assign blame, but to find simple, no-nonsense solutions to our financial problems.

Knowledge is power, so the first thing that you need to know, is exactly how much money are you bringing home from your job. Most people know that, but there are some people who get direct deposit and it’s to the point where they don’t even know what they make, that’s a bad position to be in.

Once you know how much you bring in each pay period, I want you to look at your 2008 tax return. Did you get a large tax return this year? If you did, that wasn’t the government’s benevolence, that was paying you back for overpaying your taxes during calendar year 2008. I routinely see people in my office who have $5000 – $6000 tax returns. If you’re getting a $6000 tax return, you essentially want the government $500 per month interest free for a year. That’s your money, don’t lend it to someone for free, especially an organization that spends $900 on a toilet seat.

If you’re overpaying significantly in taxes and getting a large tax refund every year, go see your HR person and have your holdings adjusted so that you’re getting more of your money each month when the government is getting less. Sometimes that simple move will get someone out of financial dire straits on their own.

If you all $1500 on your Discover card, and you’re struggling to find a way to pay, you fixed your tax withholding, you’ll have more money to pay that debt off, and the sooner you pay that debt off the less likely you will be to fall even further behind on your Discover card.

The next suggestion I have is to make a list of everything you spend money on for a week. That might seem silly but I did that in January, and I learned that I spent $30 at Starbucks, $18 at Joey Vento’s Gino’s Cheesteak’s, $120 at Merchant’s Square Mall, and almost $50 on various fast food (we have lots of health food in Philly). That was almost $200 a week on crap.

Rather than spend $30 at Starbucks, I bought an iced tea brewer for $25.  My iced tea costs around six dollars per month and it’s much healthier too.  I’m not going to say that I completely kicked the Starbucks habit, but it’s not a once a day thing anymore. I didn’t give up Gino’s completely either, but it’s become a once a month treat rather than a three times a week deal, and I didn’t give up fast food totally either, but the sandwiches I make are just about as good as what McDonald’s can come up with and for a fraction of the price.

I confess that the $120 I spent At Merchant Square Mall was just crap, I haven’t completely kicked that habit either, but definitely more aware of when I spend money at that place and now have the good sense not to go in just to say hello.

I’ve been able to lower the amount of money spent on crap per week from $200 to around $50, and the $150 savings per week is going towards paying my car off that much faster, and when this is paid off I’m going to knock out another car loan, I have a strategy for that as well, but that’ll be a subject of another post on another day.

The bottom line is most people would come see me don’t really need bankruptcy, they needed their financial house in order, the best way to do this is to figure out how much you make, how much you spend, and prioritize to determine whether you really do need the help of a bankruptcy lawyer were just a little bit of self control, because I assure you if you do not take control of your financial situation you will need my help and it will be sooner rather than later.

If you need help coping with your debt struggles and you don’t know where to turn to, please check out Jim Valeri’s site Jim Valeri, Counselor, and then when you are ready to get on the road to financial recovery, email me at jim@padebt911.com or call me at 484-661-2891 to schedule your free, no-obligation consultation.

I contend that the debt collector threatens to sue you, and they are employee of the debt collection agency and not the creditor or the person who owns the debt at that time, that they are violating the Fair Debt Collection Practices Act (FDCPA) because they cannot possibly be certain that the creditor is in fact going to sue the debtor.  Threatening to file a lawsuit against a debtor if you have no intent to do so is a violation of the FDCPA.

Debt collection agencies have caught on to this, and while some are doing the right thing and instructing their collectors not to threaten legal action, others are allowing their collectors to say “If you don’t pay this today I’m going to send it to legal”, or “If we don’t get a payment today your account will be referred to the legal department”.

I think I can make a very good argument in court that if the debt collection agency itself doesn’t have lawyer on staff, they have no right to threaten to send your account to the legal department.  Think about it for a minute, telling someone your intentions to send them to the legal department implies that you are going to sue them, and that would be a threat.  If the collection agency doesn’t have an attorney working for them and there is no legal department, they had no intention of sending you to the legal department, and therefore they were threatening you with legal action that they could not take and they are violating the FDCPA.

I’m not sure if that argument would hold water in court, but I think it would.  Collection agencies are not in any hurry to find out either.

The bottom line is this, if a debt collection agency is threatening to sue you, you have a reasonable argument that they’re threatening you with legal action that they don’t intend to take.

This is just one of any number of the FDCPA violations that collection agencies routinely use as a collection tactic.  A letter from a good FDCPA attorney will make a collection agency shake in their shoes.

Think about what’s on the line for the collection agency.  If they go into court, they have to pay a lawyer to defend them, and if they are found liable for violating FDCPA they not only have to pay a fine but the debtor’s attorney’s fees.  If they’re found violating FDCPA, the fair Trade Commission will be monitoring the more, as will a lot of other gladhanding agencies in the US Federal Government.  I’m not a person who likes Federal intervention, but we don’t have debtor’s prisons country for a reason.

Don’t let yourself a imprisoned by a rogue debt collector.  If you have debt problems and you’re in over your head, or you have a debt collection agency calling you that just doesn’t get it, call me at 484-661-2891 or e-mail me at jim@padebt911.com and we can discuss your options together. How long should the collection agency be allowed to threaten to send you the legal before you send them to your own legal department?

Maybe you’ve heard it, it has something that sounds like gospel music playing in the background and the song has a lot to references to freedom.  I’m not against freedom, but it’s clear that they were targeting a demographic, and that demographic is African-American people, particularly women

I market to a specific demographic too, so there is nothing inherently wrong in targeting your audience to make sure your message reaches the right group of people who need your services, but this is more nefarious.

African-American women are being targeted by this company because they believe they are an easy mark for an inferior product at a lower price.  This debt settlement company’s product is inferior because they are not lawyers, in fact you will probably learn that their employees are in as much debt, if not more, than you are.

I have heard the Spanish language version of this ad.  This ad has Latin music playing in the background, so what?  As stated earlier, there is nothing wrong with demographic marketing.

What is wrong is the reason behind this target.  This company preys on these people because they are unlikely to fight back.  The Spanish speaking customer who is wronged will call in and suddenly they will not be able to find a Spanish speaking employee on site (by the way, I just hired my first bi-lingual employee today, his name is Manuel, and he will be converting this site into Spanish over the next few weeks).  Spanish speakers have less access to the courts because of the language barrier and if there is an immigration issue hanging over their head, they do not want to be noticed.  One immigration lawyer told me this company can market to Hispanics because “if they screw up and the customer tries to sue, they will get them deported!”

I suspect this company is targeting African-American women for similar reasons.  Most African-American women who go to a debt settlement company do not have extra money to hire a lawyer to chase this company if they fail to deliver.

I might be completely off-base.  There may not be any bad intention on this company’s part, but I’m pretty good at smelling a rat, and non-lawyer debt settlement is a lousy product.

If you are ready to resolve your debt problems and are ready to talk to a lawyer who will show you the respect you deserve, call me at 484-661-2891 or email me at jim@padebt911.com, and you can experience freedom from debt too.

Let me give you little bit of background, about three weeks ago my wife and I went to see a movie and at that theater they had one of those supposed deals where you get popcorn, candy, and soda for an ungodly amount of money.  I think it was 18 bucks total for all that good stuff.  My wife is a fan of Reese’s pieces, but the theater only had peanut butter M&Ms.  Me being the sensitive husband assumed that peanut butter M&Ms were just as good as Reese’s pieces, but my wife informed me otherwise, so I had a gigantic tub of popcorn and a bag of peanut butter M&Ms.  I put the candies in my coat pocket and stuck them in the freezer when I got home

A couple weeks passed and from time to time I looked in the fridge only to stare at those M&M’s in the fridge, but I never grabbed them until today.

I pulled the bag of the freezer quick and M&M’s started for crashing to on the kitchen floor.  Strewn across my floor were the beautiful colors of the M&M rainbow along with solid milk chocolate and some half-frozen peanut butter.  I knew that the 3 second rule wasn’t going to apply as the M&M’s were broken and spread out all across the kitchen floor.  I grabbed the paper towels and cleaned it up.

Disappointed, I grabbed the bag (more gently this time) and saw there were a few M&Ms left in it and I went back to the desk in my home office and started working again.  So what does this have to do with bankruptcy?

Like I learned Marine ROTC proper preparation prevents piss poor performance, but proper preparation also prevents piss poor results like M&Ms all over the floor,  or in the bankruptcy world of bankruptcy case being discharged without certain creditors included in the discharge.

In the bankruptcy world every attorney should be doing due diligence.  For me due diligence involves pulling credit report of my client and making certain that every creditor on the credit report is included in the bankruptcy filing, so that no creditor can come out after the case is over and continue their collection efforts.  For me due diligence is verifying, verifying, and then they are flying again at the information on the forms are correct before us to submit to the court.  If I had verified that the M&M bag was indeed open as opposed to assuming that it was still shut, there wouldn’t be M&M’s all over my floor.  If your attorney doesn’t verify that every single creditor listed on your credit report is included in your bankruptcy, that creditor will not be included in the bankruptcy and can come after you after the case is completed

If you have decided that bankruptcy is the way that you want to resolve your financial problems, make sure to ask your attorney what sort of due diligence that they use.  You need to know that your attorney is going to pull your credit report and include all your creditors in the bankruptcy documents.  You need to know that you are a name, not a number, your case matters, and your case is worth having your attorney double check before they submit documents to the court.

If you’re interested in talking about your financial situation feel free to call me at 484-661-2891 or e-mail me at Jim@PAdebt911.com, and we can discuss your specific situation.  If you ask I’ll even have a pack of M&Ms here for you.

Two of the highest rate filers are Discover Card and Capital One, with Discover Card probably outstripping Capital One at a rate of 5 to 1.

I’m not sure why they’re doing this.  In Pennsylvania, credit card companies are not able to garnish wages, however they are able to garnish bank accounts.  In my experience the average person being hauled into court for credit card debt doesn’t have more than a couple hundred dollars in a bank account at any given time, so I don’t really understand why these credit card companies are going to the expense of getting a judgment.

It can’t be to have priority in a bankruptcy proceeding because at the end of the day they still unsecured creditors in a Chapter 7 bankruptcy and are probably not going to get anything.  They can’t garnish wages because as mentioned above they are not allowed to.  So why are credit card companies now suing in the Magistrate and Court of Common Pleas courts the state of Pennsylvania?

I think it’s about intimidation.  The average consumer doesn’t know that a credit card company cannot garnish wages.  The average consumer doesn’t know the credit card company can garnish a bank account.  The average consumer who has a charged off a credit card probably has other credit card debts and other debts pressuring  them, and it might be that the credit card company wants to be the first on their list to be paid.

It probably isn’t worth the day you will lose taking off from work to fight this suit.  You need a competent attorney to defend your rights, and you need one quickly.  If you owe Capital One, Discover or some other renegade credit card company$4000 and they get a judgment, and then they somehow grab it from your checking account in a garnishment, that money is gone forever.

The most important the thing about dealing with your debt problem is being in control.  It’s a roller coaster ride up and down from 0 to 150 mph in a second.  Scary eh?  What’s scarier is that you’re at the control of this roller coaster.  You can either let go a handle and let things fall the way they may, which will almost always result in your creditors taking advantage of you, or you can choose to control the situation yourself.

Before some rogue credit card company gets a judgment against you and pulls the last money you had saved out of your emergency fund, to pay for months of late fees finance charges inflated attorneys fees, you should contact an attorney who will help defend your rights.  Yes the credit card companies have rights, and they are not shy about defending them, but you have rights too, and you probably don’t have the time to defend them while you try to make it through to the end of this week.  The credit card companies have an army of attorneys to defend their rights, don’t you owe it to yourself and your family to take advantage of at least a free consultation?

When you are ready to defend yourself against rogue credit card companies, out-of-control debt collectors, and all the other financial creatures that go bump in the night, contact me at 484-661-2891 or e-mail me at Jim at padebt@911.com for your free no obligation consultation.

Recently I had a potential client in my office who in seven months had racked up $14,000 in credit card debt.  I have seen people pile debt up quickly before, but $14,000 in seven months is quite a feat.

Before I make recommendations to any client, there are some questions I ask to try to figure out what the root of their money problem is.  The last thing I want to do is recommend bankruptcy to someone who is just going to go back down the road that leads to debt problems.

I was going through my client’s credit card bills and one location kept coming up, AAA Veterinary Associates (name changed).  Upon further questioning, I learned that my client had bought a daschund for $900 from a local pet store and the dog had spine problems.  One surgery lead to another, and before she knew it, she had spent $12,000 on medical bills for the dog.

There was no way I was going to file a Chapter 7 case for this woman until I knew that the problem was resolved.  Medical problems with pets are among the most heart-wrenching there are, because every human has a line of what they cannot or will not pay for Fido or Sparky to be made well, and we always feel dirty when we decide it is better to put our pet to sleep rather than continue to pour our hard earned dollars into their medical issues.  It is doubly hard when it is a child’s pet, as this dog was.

I had to deliver some bad news.  I told my potential client that bankruptcy would not solve her problem unless she stopped the financial bleeding, and in her case the financial bleeding was this dog.  She had to be reasonably sure the dog wasn’t going to require much more medical care or she would need to put the dog up for adoption, or worse, put the dog to sleep.

Needless to say this wasn’t what she wanted to hear.  I got a little bit of the “shoot the messenger” effect, but that is OK, I can take it.  I have tried to keep touch with her, but she isn’t returning calls or emails.  I certainly hope that she resolves her money pet issue before she files for bankruptcy, even if she doesn’t file with me, because right now I will not file a case for her.

This is an extreme example of what a sick pet can do.  I have heard of pet insurance, and frankly I’m skeptical of it, because dogs and cats tend to live about 12 years, how is a company going to insure it?  I’m afraid I can’t advise you on that, but I do know that if you are in tough financial shape or your job is not on sure footing, now is not the time to get a pet, no matter how much your child or significant other wants one.

The average cost of keeping a dog in according to the 2005-2006 APPMA National Pet Owners Survey was $1,571.  That is not a large amount of money, but the trouble is that is an average.  Ear surgery can cost $800.  Spine surgery can cost $1500, and that is on the low end.  Bladder surgery can cost $1000.

If these costs keep adding up, you will have yourself in a money pet.

I don’t know if I can make it any clearer, if you are in a bad financial state, now is not the time to get a pet.

Most people don’t want to find themselves in my office discussing bankruptcy, but this economy has caused a lot of people who never thought it could happen to them to find out that it can happen to them.  Let’s be sure Fido isn’t leading you into my office on a leash known as a money pet.