So David Lardner bought a 2005 Volvo Station Wagon for $3,900 at auction. Pretty good deal? Looks that way, but he didn’t know for sure until he brought his car past a trusted mechanic.
After spending $170, David saw that his car only needed an oil change and air filter, a pretty spectacular outcome, really, for a car bought practically sight unseen.
Turning this high mileage Volvo into his daily drive brought a little more adventure than he was really ready for. He was doing ok until the third day when the transmission would not move into park. This made David very nervous because that could have meant the transmission was bad or that the specific part that would not allow the car to shift to or from park without pressing on the brake could be bad. That’s not as expensive a repair as a transmission, but still costly.
Upon inspection David noticed that a broken piece of plastic was getting in the way of the shift lever. With just a little elbow grease and a pair of vice-grips, he was able to move the shifter freely for a huge relief.
This is an example of how frightening it can be to buy an auction vehicle. Had the transmission been bad, that would likely mean that this particular car could not survive on the road. Serious warning: had this happened to someone less mechanically inclined, this simple problem may have resulted in unnecessary towing and repair costs.
Here are David Lardner’s 6 tips to remember if you want to buy an auction vehicle:
Before embarking on this adventure, make sure you have the following items on your checklist:
Be very mechanically inclined (in regards to automobiles) or have someone who you trust with you.
Set a budget and remember to figure in buyer’s fees and tax/tag/title
If previews are online, look at them closely. Many times VINs are included so you can run a CarFax or AutoCheck well in advance.
Show up a few hours early so you can inspect the cars you decide to bid on.
Show discipline. Know ahead of time and stick to the maximum that you would pay for each of the cars you decide to bid on.
Be realistic. You are buying a car that will likely need, at very least, a complete servicing, and perhaps much more.
For David Lardner, he had low standards for his $5,000 car, but there were standards:
Find a car that was less than ten years old and
Had four matching tires with reasonable tread life left.
All the lights functioning and with
Little in the way of body damage
Having access to the vehicle identification number (VIN) allowed Clark to run reports like CarFax and AutoCheck on promising vehicles. But, just because the online reports might be clean doesn’t mean much if the car was damaged and fixed outside of using insurance. Self-pay repairs often don’t make it to those services.
After a couple of hours searching through the acres of available cars, Clark chose three cars that passed his tests, looked ok, and were likely to come in under his budget of $5,000. But that wasn’t his real number:
There were additional costs that auction buyers have to consider when going to an auction: fees, taxes, and tag and title charges, to name just a few. Plus, he intended to pay with a credit ccard for the protections offered by the credit card companies, and the auction houses add in a 2% up-charge. That meant his bid was capped at about $4,000.
By the time he was done, he found a car that matched his standards for about $3,900. But the big takeaway from his experience was that it’s critical to know what you’re doing or bring someone who does. If you don’t you could find yourself worse off than before.
Check back next time to see how David Lardner’s auction vehicle worked in the real world.
P.S. Did you know that sometimes you can sharply reduce the amount of your car payment in Chapter 13? To find out more take a look at my video,
Why Chapter 13? Part 4: Restructure Your Car Loan - YouTube
Hello everyone. Thank you so much for joining us today on This Needs To Be Said. We’re here with Attorney Ron Drescher and he’s going to talk with us about, basically bankruptcy is not a bad thing. Helping you to learn that good people find themselves in crisis situations and how he can help you. And not just people that are filing bankruptcy but also people who just may find themselves, I want to call it a broken plan situation. You intended to pay back a debt and you just weren’t able to stick to the plan. He’s here to help you with that. He wants to be on the frontline of your financial rehabilitation.
Welcome back to This Needs To Be Said. Ron, how are you?
Thanks Katherine, I’m doing great. How are you doing? Happy New Year.
Happy New Year to you as well. I’m doing wonderful and looking for great things to come out of 2018.
I am excited to get the information just at the consumers will be as they’re listening to us talk today. I got pen and paper out. I get excited every time I get the chance to talk with you, because you’re not just talking to someone who is at the end. You’re helping us along the way to look at our financial future.
You have published a book. I want you to mention that book before we get started today, because we’ve talked about it before and I want to ring the bell to the This Needs To Be Said audience, and remind them of that book. Then we’re going to go into what you’re wanting to help us with our financial rehabilitation on today.
Sure. The book you’re talking about is called File Bankruptcy and Get Rich, which is certainly an ear catching title. But it is expressed in a very sincere way. The feeling for the book is, all right you’ve got these debts and the debts are dragging you down. They’re stopping you from getting ahead financially.
So what would happen if we took away the debts and then you were able to save the money that you were paying towards creditors and invest it in fairly conservative investment vehicles like a Vanguard S&T fund or something like that.
What would it look like at the end of a certain period of time, like five years, 10 years, 20 years, where instead of paying minimum balances on a credit card, you are now paying yourself in an IRA or a 410K or just a straight investment fund? What would that look like? Where would you be in those five, 10, 15, 20 years if you were able to get out from under the debt?
That’s the premise of File Bankruptcy and Get Rich. We had over 1500 people read that book, and get a lot of benefit from it. At a certain point I thought, “You know, my readers, my clients, people out there, they need more help.” They need some specific strategies for saving money so that they can then invest the money, and then get ahead.
There’s a great book called “Rich Dad, Poor Dad” by a fellow named Robert Kiyosaki, who basically said that it’s not how much money you make, it’s how much money you keep that dictates how well you will do over the course of your life. With that truth in mind. I felt like it was important that I tell the world that as a bankruptcy lawyer who’s in the middle of the world of financial rehabilitation, that there are sound, innovative, and unexpected strategies for saving money so that you can fulfill the promise of File Bankruptcy and Get Rich.
That’s a project that I’m going to start for 2018 as hopefully well into the future.
The first one Ron is, isn’t it a bad idea for a bankruptcy lawyer to keep people out of debt? I’m saying that tongue and cheek. I do really want to know what brought you to the point … You do work with a lot of people, like you said that are in financial crises. That is what they come to you for. I need help.
What triggered it for you and said, “You know, this is something I need to add to my business. This is another way for me to serve people?” What brought that to your attention?
What a wonderful question, because there is a story behind it.
I love stories.
Time after, time after time, I have clients that come in to me and they’ve got an expensive car loan. It’s not necessarily an expensive car, but it’s an expensive car loan. They’ve got bad credit, so they’re paying exorbitant interest, plus they’ve traded in a car that was already worth less than what they owed on the car.
So the new car company, the new car lender, rolls that old loan into the new car loan and they’re paying way more than the car that they just bought. That’s a trap that I see over and over again. Paying $500-$600-$800 a month for a car loan for people who really can’t afford that. What I advised them to do is a strategy of surrendering the car. Saving money, some cash. Then going to a car auction. There are car auctions in every city of every state around the country. And buying a car at auction.
As I give that advice, it dawned on me that I should really learn as much as I could about car auctions. I went out and I did a lot of research. There’s a lot of positives and a lot of negatives about buying cars at auction. I compiled all of the information of my research and I started writing articles and blogs about buying cars at auction.
I’ve been working on that and I said, “You know what? That’s really just the tip of the iceberg.” That’s just one strategy that my clients and other people in the situation like my clients, can use to save money so that they’re not behind the eight ball so much. And they’re not struggling so much from paycheck to paycheck, from month to month. They can actually get a little bit of relief in their lives.
I’ve taken on the mission to understand all of the different ways. There are all these websites out there that promise to save you money. Dealdash.com. Buying on eBay can really save money there. Is there a different in the retailers online? Do you really save money at Walmart? Is it worth it?
Is it worth going to Groupons? Is there a strategy to coupon clipping? That kind of thing. Then I decided, “You know what? I’m a bankruptcy lawyer. People know that I have experience consulting clients who are in financial distress and who have problems making their ends meet.”
Who’s better positioned than a bankruptcy lawyer to advise someone how to try to get ahead in their lives?” So I said, “You know what? Let’s have this series be the bankruptcy lawyer’s guide to saving money.” People who are searching for this information can know that I’m a trusted source, because I’ve been there, done that, seen all the horror stories, seen the success stories, and I have access to the information that they can really use.
I’m smiling and nodding my head. While this is a radio interview, you can’t see all of that. Of course, it’s hindsight for the person who’s filing bankruptcy. We could’ve done these things or I wouldn’t have known to do these things until I met with you.
My second question for you, because I told you I had two in the beginning. Good, honest people. Is this something that good, honest people will find themselves needing to use, or is this for people who are always looking to get away with something?
One out of every 50 people that meet with, are people who I call angles-guy. He’s an angles-guy. He’s always looking at the angles to try to get ahead. That’s one out of 50. That means that the other 49 people are good, honest, hardworking, well intentioned people, who like you said at the beginning of the show. People when they take on debt, they have a plan.
They’re working. They have started up a business. They are married and they’re a two income family. They’re healthy and the plan is to pay down this debt. But then something goes wrong. They get sick. Their business doesn’t perform as well. They get laid off. They get divorced.
Then the plan collapses and where are they? They are in crisis. They’re in crisis because their plan didn’t work out for reasons, pretty often outside of their control. That’s what I see
So yeah. I think that the strategies that I’m going to be exploring and the techniques that I already discussed with my clients for managing their crisis and getting out of debt, will work for good and honest people, and is really perfectly applicable for them.
Awesome. I wanted to definitely let our This Needs To Be Said audience know, when I asked that question of Attorney Drescher, we were in preparation for the show. In reading over some of a blog that he’s preparing, that’s what came up. Good, honest people, they just want to do the right thing. You made an agreement with someone and you want to pay them back, and it doesn’t happen. There’s shame and embarrassment. You feel bad that you can’t pay people back and it seems like you just don’t have a good enough story or reason to tell a person why I don’t have this money for you. Why I can’t give you back what I promised you.
He named a lot of the reasons, the big reasons why people aren’t able to keep that promise. Not because they don’t like you or they’re being malicious. Things changed in their lives since the beginning of their plan, which could happen. By following his advice, by working with him, you can now put yourself in a better position.
I would say, Ron, I would dare say, you’re putting people in a better position of keeping their promises, because they’re going to places like the car auction and they know how to do that and to get transportation., because that’s what we want. We want nice cars. We want transportation that is going to get us everywhere we want to go, not just point A to point B.
You teach us things like that, then it’s easier for me to keep a short term agreement than a long term one because life happens and sometimes we don’t have enough saved up to catch all of the storms that may come. That’s what I believe I’m hearing from you on today.
Am I following along correctly?
I think that’s exactly right.
All right. I’m looking forward to the series and what all you’re going to bring to me, my This Needs To Be Said audience, and all of your potential customers.
I do have another question for you, because I’ve read many articles. Step 1-2-3. How to do this. You can do it this way. It’s easy as, but the thing that I found that I have to have my mindset right in order to be able to receive and follow any step plan that someone puts out for me.
Talk to me about the mindset of the people that are going to receive the information that we share during the interview. How is it going to help them to really stick to the plan, because part of our problem, as consumers, is not sticking to the plan for whatever reason?
First of all, there are a few things.
One of the things that’s really important is to reduce your tasks to very, very small bites. Something that you can manage on a daily, weekly or monthly basis, so that you’re not overwhelmed by it.
I don’t like New Year’s resolutions. I’m always against them, because you get into February and you’ve abandoned the New Year’s resolution and end up feeling worse about yourself, which has defeated the whole point of the resolution. What I believe in is learning through very manageable habits, how to accomplish something.
Let’s say you want to go coupon hunting. You’ve got a big stack of coupons that arrive in your mail or that you pick up at the grocery store. You’re putting it aside and you say, “I’m going to spend two hours every week going through these coupons.”
I would say, “Don’t do that.” Don’t do that. Do five minutes every three days. That way you know … I mean five minutes. You can do five minutes. You can do five minutes while you’re sitting waiting for your hard boiled eggs to boil. Take five minute increments every three days and look through the stack.
Then when you go shopping you know you’re going to have 10 coupons, instead of putting everything aside for a week and then something’s going to come up and you’re not going to have those two hours. Then you’ve lost the week.
I think that’s the most important thing in the mindset of achievement, is to break your goal tasks down to very small, manageable bites. That’s a way to stay on plan, to stay on task.
Now, I know our time is running out, and we’ve been talking this entire time, but my last question for you is why should we listen to you, an attorney, who practices bankruptcy law?
Bankruptcy lawyers are on the frontline of financial rehabilitation. We help people who come to us in crisis, whose finances have collapsed or are in the process of collapsing. We help them through the difficult bankruptcy process, so that they emerge in a much better place.
We see people who are in crisis. We see and deal with people all the time, who need financial rehabilitation. So why wouldn’t you want to listen in to a person who is in that world, who is on the frontlines of that world, giving their best possible advice on how to succeed once they’ve emerged.
Absolutely. I think that you would be the perfect resource for someone. If the people in the This Needs To Be Said audience have not experienced anything, then we’re not talking to you, but for those who have, and I know that there’s somebody out there who has experienced some form of crisis, felt like you were alone, did not have anybody to turn to other than our friends who may have not had our similar situation, that were giving us well meaning, bad advice. This is the person that you want to have as a resource. And It’s not bad. Bankruptcy is not a bad word. We want you to be comfortable with looking at anything in your financial life that will lead you towards the road of bankruptcy, you want to listen to this guy, because he’s not only talking to those who need to pick up the phone right now, or shoot him an email and say, “Help me.” He’s talking to the people who are seeing things unravel. You’re seeing your situation get tricky.
We’re going to talk more in future conversations about the car buying at auctions, so if you are tied up in a bank loan or car loan right now, he may be sharing with you some tips on what to do to put yourself in a better position. As well as other things.
Yes, we touched on coupon shopping. For those who coupon shop, I know you gasped, “No. What do you mean? Don’t commit so much time?” We’re going to talk more about all of those things, because he wants to help you have a better financial future, believe it or not, coming from a bankruptcy attorney. And because he’s seen so many horror stories, he’s the best person to tell you what financial decisions to make that will keep you out of those horror stories for yourself.
Attorney Drescher, tell everyone how to get in touch with you, and also how to get a copy of your book.
The easiest way to get a copy of our book is to go on Drescherlaw.com. That’s www. D-R-E-S-C-H-E-R-L-A-W .com, or you can always call my office at 443-438-1966. You’ll speak to our office and we’ll be happy to send out a copy of the book.
Awesome. Until next time. Thank you so much for stopping by This Needs To Be Said.
Many of my clients are suffocating from enormous car payments, the result of trading in older cars worth less than what they owed and rolling those loans into the new cars. Then combine high interest rates with these inflated loans and you have a terrible recipe for a monthly (or, with some lenders, weekly) struggle to make the car payment. Bankruptcy can help get out from under the car loan, but then how do you replace the car that you need to get to work? Buying cars at auction is a possible solution, but you need to understand the possible pitfalls.
According to Clark, Dealer auctions are limited to those who hold dealer’s licenses so an average consumer can’t purchase there. The cars in these dealer auctions are usually in good enough condition where they can be placed in the used car inventories of new car dealers.
Meanwhile, public auctions are open for anyone to attend and buy from. There is a mix of lower-end buy here/pay here dealers and consumers milling about inspecting the cars. These are where the least expensive and the most potentially troublesome cars get sold.
Just about every metropolitan area has numerous auctions taking place every week. These auctions usually offer high mileage, heavily used and sometimes damaged cars.
Each auction has its own rules. There are some auctions where the rules allow you to preview the vehicles up for sale and test-drive them. There are some that don’t allow test drives, but will allow you to start the car and inspect them. Taking them to a mechanic for a proper inspection is pretty much impossible.
The Auction Goal
Clark’s goal was to find reliable transportation for less than $5,000 that he could put into service with less than $500 in repairs. He was hoping this car would be “decent looking” though reliability was of the utmost importance.
Because he was (and you are probably) not a dealer, Clark had to attend the public auctions to find suitable transportation. And, because auctions are generally the last time a car gets sold on the open market prior to going to the junk-yard, the risks of purchasing there are huge.
Check back next week to find out what Clark bought and what challenges he’ll face trying to make do with as inexpensive a car as possible.
P.S. While we’re on the subject of cars, many of my clients want to know if they can buy a car in Chapter 13. The short answer is “yes”, but the longer answer is always more complicated, as I discuss in this video, Can I Buy A New Car In Chapter 13?
When people ask me what I do for a living I tell them “I’m a bankruptcy lawyer.” The reactions I get back range from the judgmental to the practical: “Don’t people abuse the system?” (sometimes); “How do you get paid?” (it’s complicated); “Did you represent Donald Trump?” (no); “Can I discharge my student loans?” (almost certainly not.) After I give these answers I try to steer the discussion to a more important question, which is the role of forgiveness and rehabilitation that is at the core of bankruptcy law and philosophy.
Without getting too deep, I explain that most people, when they take on a debt, have a plan for repayment. They will work their job, or run their business, or develop their property, or combine incomes with their spouse, and every dollar they borrow will be repaid. Clients don’t reach out to me for help until after something goes wrong with their plan: they get laid off, their business does not perform as expected, they get sick, the zoning of their project changes, they go through a painful divorce. Good people, honest people, simply don’t have the cashflow they expected to manage their debt. The bankruptcy laws allow me to help them get past this crisis and put them back on the path to financial well being: improved credit, increased savings, normalcy. In thinking about this bigger picture, the act of resolving the crisis through a bankruptcy case is really only the first step in a longer term goal.
So when I meet a prospective client for the first time, I’m not just thinking “how can I relieve this person’s crisis?” I’m thinking “How can I help this person have a better life?” That’s why I wrote File Bankruptcy and Get Rich, which is a guide to using the bankruptcy laws to improve your finances and get a running start on a better future. It’s also why I team with 720creditscore.com, so that my clients have a trusted source and a logical (and easy to follow) system for improving their credit score after bankruptcy. With this blog, I’m launching a third program to help clients fulfill the promise in File Bankruptcy and Get Rich: how to hold onto the money you make so you can invest in a better future for yourself and your family.
“Most people fail to realize that in life, it’s not how much money you make. It’s how much money you keep,” writes Robert Kiyosaki in the personal finance classic, Rich Dad Poor Dad. But dollars can slip through our fingers without us realizing it. Paying too much for food, rent, clothes, cars, mortgages, travel or anything else we want or need can defeat the value of the bankruptcy discharge and prevent us from moving forward those crucial squares in The Game of Life.
But it’s one thing to hear that we need to keep more of our money, but how do we actually do it? Every day we are bombarded with messages about how this or that brand, product or technique will save us money, but will it? How can we know without risking our own dollars (and precious time) to find out for ourselves? Helping answer this question will be the point of The Bankruptcy Lawyer’s Guide To Saving Money.
In this weekly series, I will explore such mundane but essential topics as clipping and finding the right coupons, or groupons; learning to spot a real bargain from a sales pitch; understanding online deals and discount websites; and much more. I’ll also spend some time with budgeting and financial management. My hope is that after only a short time you’ll be on your way to keeping the dollars you make and building real financial security.
To start, next week I’m going to begin a series about buying cars at auctions. Many of my clients are suffocating from enormous car payments, the result of trading in older cars worth less than what they owed and rolling those loans into the new cars. Then combine high interest rates with these inflated loans and you have a terrible recipe for a monthly (or, with some lenders, weekly) struggle to make the car payment. Bankruptcy can help get out from under the car loan, but then how do you replace the car that you need to get to work? Buying cars at auction is a possible solution, but you need to understand the possible pitfalls. I’ll explore the benefits and the dangers of automotive auction hunting starting next week.
Some day, I hope to tell someone that I’m a bankruptcy lawyer and they’ll ask “How do you help your clients lead better lives?” When they do, I’ll show them this blog.
Talk to you soon,
Can The IRS Offset Old Taxes Against My Tax Refund? - YouTube
My name is Ron Drescher; I’m an attorney practicing bankruptcy and creditor’s rights in Maryland, Delaware, Pennsylvania, and Virginia and today I want to correct a mistake that a made in a different video. I was on the streets of Paris and I was excited to talk about the five reasons that you might have to file a Chapter 13 case and I recently discovered at least a couple more reasons. There’s a sixth reason and that might be because you want to lien strip a completely unsecured junior mortgage against your property. You can do that if the property is not secured by even a dollar’s worth of value. What happens is you get a valuation for the property, it could be an appraisal, it could be a broker’s price opinion, it could even be just your own opinion of value and then you show how much you owe to the first priority senior mortgage or deed of trust and if the amount that you owe on that senior deed of trust is higher than the value of the property if you have a junior mortgage or junior lien you can strip that off, even if it’s a consensual mortgage. You can’t do that in Chapter 7, but you can do it in Chapter 13 and it is a reason why many of my clients do choose to file for Chapter 13. My name is Ron Drescher; I’m an attorney practicing bankruptcy and creditor’s rights and if you have a question about whether Chapter 13 is a good remedy for your problem please pick up the phone and call me. I would love to hear from you.
Hello everyone, thank you so much for joining us today on This Needs To Be Said. We’re being joined by our friend, attorney Ron Drescher, and he wants to talk with us about convenience bankruptcy.
How are you doing today? Welcome back to This Needs To Be Said.
I’m doing great, I always enjoy coming back here and speaking with you.
Awesome, did I get that name right, convenience bankruptcy?
Convenience bankruptcy. I was trying to think of a catchier phrase, but really, that says it all.
Tell us about this.
In the old days, if you wanted legal help, you found an attorney, you took a half day off from work, you made an appointment at the attorney’s office, and you went in, saw the attorney. Then what happened is, you spent an hour deciding whether or not the attorney was going to be able to solve your problem. Then you had repeated visits to the attorney’s office to go through your paperwork, collect your facts and documents, sign legal matters and proceed. Then maybe you had another meeting at the attorney’s office to look at the final versions of the documents, to give them your blessing to execute them, and then the attorney does what the attorney is required to do, and that puts you in the position of filing a bankruptcy case.
So you’ve seen the attorney and been in his office three times. Now, these days you just can’t afford to do that. People are working hard, they’re occupied from 8 a.m. till 6 p.m. and it’s become a real burden for many people to go see the attorney when they have to work so hard. Another problem is, most people are looking for lawyers on the internet these days, and maybe you’re located in Anne Arundel county and you see an attorney in Pikesville, that’s got 113 five star reviews, and you really want to work with that attorney.
But for you to get up to Pikesville, from Anne Arundel county, it’s 45 minutes to an hour each way, and that’s a burden, so then you’re going to take your risk on another attorney that may or may not be qualified and give you the confidence that you would want in a lawyer, that’s a second problem. Or, maybe you’re disabled, maybe you work crazy hours, maybe you just can’t get out of the house, maybe you don’t have a car, maybe you’re too far from the lawyer’s office to see if you can have your financial problems resolved.
So for all of those people, I have a program, and that program is convenience bankruptcy. What we do in convenience bankruptcy is first, we do the initial consult over the phone, and I collect the data that I need, we find out what your goals are, we lay out options that I think will solve your problem and if you decide you want to move forward with our firm, we can collect the payments over the phone with a debit card, we can set you up if you want, with a payment plan that tracks automatically from your debit card. We mail out a binder, we do things either over email … What I’m discovering as we get deeper into the 21st century, is that more people yearn for pieces of paper that they can fill out, or even a better way to put it is, choice.
Some people want to have a binder with all their papers in it, that they can refer to and put on a shelf, other people are more than happy getting documents sent to them by fax or email, and then leaving them in a special folder in their Dropbox or their Google Drive. We work either way, however you want to work, we’re happy to work with you in that regard. Then what happens is, you work for the papers, we have five different ways for clients to send us documents. They can send them by email, they can send them by fax, they can drop them off at the office, they can upload them or we actually have returned, self-addressed stamp envelopes that they can dump their tax returns and their pay stubs and their bank statements and mail them into our office.
Then we work up their documents, we send them to them, they sign them, they can scan them, they can take a picture of them, they can fax them, so that we have their signatures on them. We upload them to the internet, and they have one public appearance. I wish there was a way that I could get them out of that, but you have to appear physically in front of your bankruptcy trustee, to answer that person’s questions about your finances. And of course, we send an attorney with you to protect you, and to make sure everything goes the way we expect it to go.
That’s the only time you need to leave your house as part of the entire bankruptcy process. We’re proud and excited about this program, because it’s enabling us to reach a lot more people than we used to be able to reach, and we’re offering a program that I think really helps people who just can’t get out of their house, or take the time off from work to meet with the bankruptcy lawyer.
That’s amazing, and you just said something that was very powerful. The person already has to go through this perceived difficult time, there’s definitely a lot of work to reset your course when things don’t seem to work out the way you want to, but then you’ve got to take time out from work, which would seem to add injury to insult, so amazing.
What did you see Ron, in your practice, or what did you see as you were reaching out to people, or people were contacting you about bankruptcy that made this process come about?
Well, we have a system in my office, we have wonderful compassionate women, who reach out to perspective clients who are in trouble, or who answer the phone when people call our office, and they try to gather as much of information as they can, and they schedule the appointments. They were having a hard time scheduling appointments for many people, because of the reasons that I laid out earlier. They were far away, or they were disabled, or they didn’t have a working vehicle, or their work hours just didn’t work. It was a little frustrating for us, and then I said, “Wait a second, instead of complaining about a problem, why don’t we re-orient ourselves so that we can serve this population and turn this problem into an opportunity?” And that’s really what spurred us on to offer this to our clients.
That is great insight, it’s interesting. I want to ask … I did ask a business question. We talk with you a lot about bankruptcy when you come on the show, but even as a bankruptcy attorney, you’re in business, and you all did a bit of market research and now you’re able to offer a program that basically helps people say, “Yes,” to resetting their lives. So kudos for that, but I wanted to bring that out to the, This Needs To Be Said audience, because every business, no matter what kind of business you are, what kind of business you run, you need to be flexible and look at opportunities to better serve your audience, and you all did that.
How can people get in touch with you to find out more about convenience bankruptcy?
They can pick up the phone and call (443) 438-1966. They can go on our website www.drescherlaw.com, that’s D-R-E-S-C-H-E-R-L-A-W- dot com and if you’re not really sure if you’re quite ready to jump into the pool, and you just kind of want to dip your foot into the water to see how it feels, people can feel free to order a free copy of my book, File Bankruptcy and Get Rich. And if you call in, and say, “I want to get a copy of that book.” We’ll mail you a copy of it and give you the opportunity to get an idea about whether bankruptcy is the solution to your problem.
Awesome. Ron, thank you again for coming on This Needs To Be Said, and sharing with us what you do, and the compassion in which you do it with, and until next time, have a wonderful day.
Thank you so much for having me Katherine, I always enjoy it.
Hello everyone. Thank you so much for joining us today on This Needs To Be Said. We’re being joined by our friend; attorney Ron Drescher, and he’s going to talk with us about a concept that’s very unfamiliar to me and I am sure we’re going to learn a lot today. He’s going to talk about the flypaper concept when it comes to debt and bankruptcy. Welcome back, Attorney Drescher, how are you?
Thank you, I’m great, how are you doing?
I’m wonderful, and I was like, okay flypaper? And the first thing that came to my mind probably has nothing to do with what you said; I was thinking about fly fishing. Anyway, so…
Yes, I understand that.
That’s what popped into my head and it’s maybe totally random but tell us about this concept. What is it, of course, where did that name come from, and then, how do people benefit from it?
Well, flypaper is very sticky, it’s one of the stickiest things that people think about. It hangs from the ceiling and it’s there to catch flies that are flying around, usually like in a mountain cabin, or someplace like that.
So, I think of debt as flypaper. It sticks to you and when you have a debt that becomes a lien, like a judgment can become a lien on real estate, or like a car loan could be a lien, or a mortgage could be a lien. They stick like flypaper to property.
I got it.
Okay, so now, when you go into bankruptcy, the number one reason you go into bankruptcy is to peel that flypaper off of you, and that’s what the bankruptcy discharge does. You go through bankruptcy, you fill out your papers under penalty of perjury, you disclose everything to the trustee, you do your courses, and about 90 to 100 days later, at the end, you’ve gotten rid of all of your debt. The flypaper has been ripped off of you.
If you have property that you bring into bankruptcy that has a lien on it, it’s also got that flypaper. It’s got its own flypaper, you’ve got flypaper, and your property has flypaper. When you take your assets through bankruptcy, the bankruptcy does not strip off that flypaper. The flypaper stays on the asset unless you do something specific and affirmative in the bankruptcy case. See, as far as the flypaper that attaches to you, you don’t really have to do anything. You just go through the bankruptcy process, doing the thing you’re supposed to do and it peels the flypaper off of you. But, it doesn’t work the same way with property.
And that really mixes up a lot of people that think, well wait a second, I had a judgment against me, judgment became a lien against my home, I went through bankruptcy, flypaper got stripped off of me, why it didn’t get stripped off my home? The answer is; because it doesn’t work that way. The flypaper’s going to stick to your assets, if it’s there; when you bring it into bankruptcy, unless you do something affirmative to strip it off. And some things you just can’t strip off, but other things you can, and it’s really important that you not be caught off guard in your bankruptcy by just assuming that you go through bankruptcy and the flypaper comes off you, so it automatically comes off your assets. Doesn’t work that way.
Yeah, I can see how that would be confusing, because my mind would think; I think what you’re saying to us Attorney Drescher is that; I believe I filed bankruptcy so I have a clean slate, but there’s still something sticking there, that’s still holding me back? Am I understanding that right?
That’s exactly right. For example, you know what? If somebody sues you, let’s say you own a home, and somebody sues you and they get a judgment against you, and that judgment becomes a lien against your home.
You go into bankruptcy, your obligations, your personal obligations under that judgment are going to become stripped off like flypaper, and that means that after the bankruptcy is over they can never sue you for that, they can’t garnish your wages, they can’t seize your bank account they can’t go and take other assets that they don’t already have rights to, where that flypaper debt isn’t already sticking to. But, let’s say it sticks to your house and you go into the bankruptcy, it’s still going to be sticking to your house when you get out of the bankruptcy, and if you don’t do anything, you’re going to have a very nasty surprise if you go to sell that house years later, or you go to refinance that house years later, and that judgment lien is still sticking to the house.
So, you have to be very careful. What you have to do then, is you have to reopen the bankruptcy case, sometimes years later, and you have to ask the judge to strip off that judgment lien, which under the right circumstances, you can do in bankruptcy. But, the judge doesn’t have to let you do it years later. The judge could say, no I will not allow it because it’s unfair, because we don’t know if all of the circumstances that have to be in place for you to strip off that judgment lien are still in place. And it’s not fair to the creditor now to have to reconstruct what the situation was years ago because you, Mr. Debtor, didn’t do what you were supposed to do at the time. So, it’s a real gotcha if you’re not careful and if you’re not aware of that quality of debt as it relates to your assets.
That’s why I call it the flypaper concept. Because you’re going to peel the flypaper off yourself, without having to do anything special, but it won’t peel off your assets unless you do something special. And you know what? Sometimes you can’t peel it off at all. I mean a home mortgage; you can’t peel that off most of the time in a Chapter 7, but sometimes you can peel off or you can affect the flypaper of a car loan in a Chapter 13, under the right circumstances.
Your ability to peel off the flypaper from your assets in a Chapter 7, a straight liquidation, is limited. You have more right to affect it in a Chapter 13. So, that’s the flypaper theory of debt and bankruptcy.
Attorney Drescher, while we would love for everybody to come and have their bankruptcies discharged with you, if someone decides not to come and work with you, is there a possibility that their attorney would not know about this flypaper concept? Is this a question that they need to be asking?
It is a question that must be asked because first of all, not every lawyer finds out if you’ve got a judgment lien, because you may not even know, and a lot of lawyers just… Bankruptcy is one of those things that not everybody is an expert, and so some people will do a little criminal, they’ll do personal injury, they’ll do disability, and they’ll do bankruptcy. And those lawyers, in particular, usually do not understand this.
Okay. I’m glad I did ask that question because I was wondering how would I come to a bankruptcy attorney and they not know this, but if they’re doing a little of this and that, that could be concerning. And that’s with any industry, I have to just bring this point out; if you work with someone who doesn’t specialize in something it does make it hard for them to know everything about everything that they’re dabbling in, because that’s what it becomes, because you can never fully know all the changes at all the times, of any particular thing, and in this case, what’s allowed for bankruptcy, or how to research it, if you’re dabbling in those things. Your mind is just too busy to if someone’s in this situation, which, I would find delicate, first of all I would find people who are considering bankruptcy are feeling bad about themselves until they realize that this is a way to reset their lives, they’re already feeling bad about themselves, so they’re already going through a bunch of emotional stuff. Go to someone who, this is what they study, this is what they do, this is what they specialize in.
We’re talking about resetting your life, this is, to me, to make it very dramatic, it’s life or death, because you are drowning in a financial situation, not being able to move forward in life and you say, okay I’m going to hit the reset button, and I’m going to file bankruptcy, and get with an attorney and figure out which chapter works best for me, and I want to be able to be able to move forward in life. But, you’re telling us today if we’re not careful, if we’re not with an attorney who understands the flypaper concept, we still are not being reset. We still have some residue from things that are dragging us down, and it doesn’t sound like it’s 100% guarantee that some things will get unstuck, but at least know about it. Don’t be blind about it. Am I understanding you right?
You know what? A 100% Katherine; and you can’t always peel off the flypaper from the assets, but sometimes it’s worth filing that bankruptcy anyway. It’s important, just as you said, to know what you’re getting into so that you can do the correct planning.
Mm-hmm (affirmative). I know that when we’re talking that we’re covering a broad stroke here in the information, and no two situations are going to be alike, so people need to be able to get in touch you themselves and say, hey Attorney Drescher, this is my situation, or they need to be able to visit you at your website, or however you prefer. So, at this time I’d like for you to share with the This Needs To Be Said audience, how they can get in touch with you outside of this interview.
Well, you can always give us a call at 443-438-1966 or you can go to Drescherlaw.com, D-R-E-S-C-H-E-R-L-A-W.com, those are the two best ways to find us.
Awesome, until next time, Attorney Drescher, have a wonderful day.