Transcript
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When it comes to bankruptcy.
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When should you start to consider talking to a lawyer about a Chapter 7 or Chapter 13?
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The answer is really the point in time in which you have debt that is unmanageable, using paper and pen and writing it all down and monitoring and budgeting.
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If you cannot do that in three years or less without borrowing more money, then you should probably be talking to a bankruptcy lawyer.
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That is my point of view Unmanageable, unsecured debt that you don't have a plan to pay off without borrowing more money in the next three years.
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That is when you should consider talking to a bankruptcy lawyer.
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Hey babe, what are we talking about today?
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Today we are talking about the B word, bankruptcy, and I know that's a word that might have some people tuning out because they're thinking bankruptcy.
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That's not for me.
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I don't need to learn about this, but I will tell you.
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I have learned so much about bankruptcy, and the fact is that Americans are carrying on, on average, over $100,000 of debt, and the household debt in America is more than $17 trillion right now.
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That's trillion with a T.
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So between a mix of student loan, mortgage, medical, car and credit card debt, it is ramping up for millions of Americans.
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And so bankruptcy is not always as far-fetched as many people believe.
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And since the pandemic, bankruptcy filings have actually soared by nearly 20%, according to debtorg.
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And we know that debt can be debilitating right, Especially depending on your income.
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It doesn't mean that you have to have hundreds of thousands of dollars worth of debt for it to feel heavy and like soul crushing.
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Get all the details on bankruptcy who it's for, why somebody would use it, when to start looking into it, what it costs.
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We're going to be really diving deep into bankruptcy today.
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So, Adrienne, thank you so much for being with us to talk all things bankruptcy Well, thank you guys so much.
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I really appreciate it.
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I'm really glad to be here talking to your followers today.
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I love that.
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We love having experts on.
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We have never claimed to be experts, so we like to bring on people who actually know what they're talking about and are experts in their field, and so that's why we're so excited to be speaking with you.
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So let's get into your bio so that people know just how amazing you are, and then we'll kick off in your first money memory just how amazing you are, and then we'll kick off in your first money memory.
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Adrienne Hines, known as the ladylike lawyer, is a beacon of trust in Ohio's legal landscape.
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With nearly three decades of experience in bankruptcy law, she has redefined bankruptcy from a feared concept to a strategic tool for financial recovery, providing clients with debt relief with dignity.
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I love that.
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I love that, in addition to her legal practice, adrienne is a pioneering advocate for financial literacy, utilizing TikTok to demystify bankruptcy and promote financial empowerment.
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Her innovative efforts have been recognized with the 2023 Best Bankruptcy Advice Award at the FinTalk Awards by Debtcom.
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Adrienne, we are so excited to speak with you today.
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Thank you so?
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much.
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We kick off all of our calls with our experts and guests with asking about your first money memory.
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That's a really interesting question and I have to say I think that's a very unique way to start off interviews and as I think about it I'm beginning to realize how truthful your statement actually is, because the very first money memory I actually have is my parents were divorced when I was very young and I remember spending some time with my dad with visitation, and I had some understanding that my dad did not have money.
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And I remember I developed an earache and I knew that going to the doctor would be expensive and I did not tell anybody about my earache and I ended up rupturing an eardrum because I was so afraid that my dad would have to pay money to take me to the doctor's office.
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And I have to say I haven't really thought of that memory in a really long time, but thinking about it kind of brings me, you know, kind of makes me a little emotional and I can see now that it was a genuine I mean, it obviously came from a able to access a doctor fear that somebody has of not speaking up because, you know, in order to, in order to advocate for themselves, because of money, that that that definitely impressed me and I I that's an amazing question and I hadn't really thought about that in a really long time, but I can see how it plays into what it is I do.
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Yeah, wow, that as a parent is so heartbreaking.
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I had a lot of different thoughts when you just said that, because, you know, the first thing I thought was kids pay attention.
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Sometimes we forget that they pay attention and they are very aware of what's going on around them and we don't give them nearly the credit that they should have.
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But then also that you would keep suffering in silence because you knew going to the doctor would cost something at such a young age.
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And we've been recently taking our kids to the doctor for all sorts of things.
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And we've been recently taking our kids to the doctor for all sorts of things and I can tell you they have never once wondered hey, am I?
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You know, if anything, they fear the doctor because we're, like, we're going to the doctor, let's go.
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But they've never I don't think they've ever had the thought of we can't go to the doctor because mommy and daddy can't pay for it, so that, whew.
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You just brought up a lot of emotions, do you remember?
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I think a lot of people sorry, go ahead.
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I think a lot of people in today's um in today's world, have children who worry about things like this, and I I think that there are a lot of people out there who um are are are not able to hide it from their children, and I think our children are really suffering from the incredible amount of debt load that so many of Americans are in right now.
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Yeah, I would definitely say that there is a difference, even though obviously you were aware of it to a certain extent at a young age that now, with social media and just you know technology in general, that I think kids definitely have a more of an understanding of what's going on because you're you're introduced to it as such a young age in different aspects.
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I agree with that yeah.
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The exposure, right, even if they you know we talk about our kids not really having a sense of what's going on in the world, because what they see in our home, in their friends homes, it's all very similar, right, they open the fridge it's full.
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They open the pantry, they ask for snacks.
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They get them, right, like there's no.
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Of course, when we go to the store, you know, sometimes we have the chat of hey, we're not here to buy you something today.
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Today we're here to buy strawberries and lotion, right, and we share with them.
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This is also important.
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You know, we don't just always get a toy every time we go to the store, but in the grand scheme of, like, what does life look like for others?
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They see pretty much the same thing, right, everybody has nice clothes, a nice house, multiple cars.
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I will say it is starting to change because previously our daughter was in a private school and now has since transitioned to public school, and so you know when we were at the private school it was pretty much looking at the same person over and over again, as compared to now the public school.
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You are starting to see that variance and you know socioeconomic level and you know we try to have the conversations with our kids so they do understand how privileged they are and that this is not the scenario for honestly, most people.
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Yeah, I absolutely agree with that.
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I do the same thing, and I think it's just really important that if you, if you are people who have, who do not worry about taking your children to the doctor and what that's going to cost, is so important that those of us that are in those shoes today, we are making sure that our children understand that they are very fortunate and to make sure that they understand what empathy really is and what it is like to see somebody or to understand somebody whose life is completely different, whose entire world, whose entire friendship group.
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Nobody has groceries in their refrigerator, nobody has a parent who's keeping an eye on them.
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The problem begets itself and we have to be paying closer attention to the young people and we have to be paying closer attention to the young people and it really dovetails into what we're talking about here.
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We get our money, information from the people around us, and if the people around us aren't sophisticated enough or if they don't have the wherewithal to be able to convey this complicated information to us, then we just have an entirely new generation of people who are even less aware and less able to navigate themselves through the complicated economics in America.
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Quick question have you ever told your dad about that memory?
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I told my mother about the memory.
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My dad and I have a complicated relationship because because we're divorced but I am, I am not, I'm not.
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I have told my mother about it, um, and I'm.
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I think I've told my husband about it too, but I think I've just really learned from it.
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Right, like I never wanted my children to feel like they couldn't they couldn't go to the doctor, it was always very important to me to make sure that the things that I worried about financially as a child that I could provide for my children, and I was fortunate enough to be able to do that.
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But I was also very, very lucky, and that's something that I understand as well.
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So my goal here is to recognize that not everybody is as fortunate.
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Not everybody has the same tools as everyone else, so we have to meet people where they are and try to help them out of whatever situation they found themselves in.
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I think that's really what the goal is.
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I just want to point out one thing that you just said that I a hundred percent agree with is the luck aspect.
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Now, obviously, there is some effort and hard work that's put into any type of achievements that you've accomplished.
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However, I think sometimes people forget about the luck aspect where like, oh, if you just work hard, then it's all going to work out, and it's like there's a lot of working hard is not the issue.
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For most people that are, you know, suffering economically, working hard is not the issue.
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Working hard is not the issue.
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Questions, then it's time for you to reach out to Brandon to schedule your free yes, I said free 30-minute introduction conversation to see how his services could help make you the more confident moneymaker we know you could be.
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What are you waiting for?
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It's literally free and at the very least, you'll walk away feeling more empowered and confident about your financial future.
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Link is in our show notes.
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Go, schedule your call today.
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I absolutely agree with you and I think that it's really disingenuous when people like me you know I'm a successful lawyer partnership, happily married, doing well.
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I have the resources.
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I've built a very amazing life my husband and I have but I am not foolish enough to think that my husband and I did this all on our own.
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We are exceptionally fortunate.
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We were born into families where education was a priority.
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We were born into families that were not perfect by any means, but they definitely did a few things for us that truly helped us, and I would not be here today but for the help of.
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You know a myriad of people whom I could never even mention or even remember, and we are the culmination of all of the people around us, and none of us get to where we are on our complete own of us get to where we are on our complete own and I think that's the part that most people get very their egos get ahead of them and suggest to them they've done everything themselves and therefore it's harder to be empathetic and it's hard to imagine people who've worked just as hard as you and just aren't getting ahead is because they didn't have a stepfather who was a lawyer and they didn't have.
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You know, a mother who saved for a college education, and these things I've been very fortunate for, and that's where empathy begins.
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Absolutely Well and I love.
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Also, it's all over your social media but you talk about debt relief with dignity and there's so much around debt that is shameful.
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Right, society has made it shameful.
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Society as a whole, I think, is like don't talk about money, don't talk about debt, don't talk about what's in your bank account, what you're doing with it.
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And so then when you talk about debt, regardless of what kind of debt it is, it automatically makes people want to retreat.
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It automatically makes people want to say I'm not going to share this.
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This is embarrassing.
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You know, I should have known better, I should have done better, I should have X, y, z and, to your point, you know, if you didn't have the resources, if you didn't have the conversations, if you didn't have the tools around you, how are you supposed to know better, to do better, when nobody taught you?
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And so what I love about your social media account is you are breaking down really complex laws and what's the word I'm looking for Concepts into really easy to understand sentences.
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Clearly I'm struggling with my words today, but you make it so approachable, you take the shame out of it and you make it so that people can just learn without the guilt and the shame, and I think you know you're doing a really wonderful job with that.
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Thank you very much.
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It's what I've been trying to do.
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I've been a lawyer for 28 years at this point in my life and I have learned that being able to communicate with my clients and being able to convey information to them in ways they can understand is the fastest way to getting them to a place where they can start making safe choices for themselves and their families.
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And so it's.
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You know all legal concept.
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Anything can be complicated, right, but everything can be broken down and explained if somebody is willing to listen.
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And I think the thing that I'm trying to do is demystify the word bankruptcy and to allow people just enough space to come in and look around and see what it's in the runaway, and then come back and look a little bit more and then run away, because I know how terrifying the word bankruptcy is and it's ironic because bankruptcy.
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The reason why I am so comfortable in this space today is because I genuinely know how beneficial bankruptcy is to the regular average American who's carrying debt that they cannot manage.
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I know very solidly, without question, no matter what you say, no matter what anybody else would say to me, I know exactly why it's beneficial for most people who are dealing with unsecured debt, and that's going to be credit cards, medical bills, personal loans, that really dangerous type of stuff.
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So it is very easy for me to be on a crusade and be out here telling everybody what I actually think, and I began to realize a couple of years ago that being honest and just talking about the thing that scares everybody, that's how it becomes less scary.
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That's how we ended up talking about LGBTQ rights.
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It's how we ended up talking about sex.
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It's how we ended up talking about women going through menopause things we never used to discuss in public.
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And the more we talk about actual, real things everybody's dealing with, like debt, the more willing people are to listen to their options.
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Because the reality is that there's only a handful of ways to get out of debt, and most of them are pretty dangerous.
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Bankruptcy is the second least dangerous option available to you most of the time, and I know that and I know why.
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So it's very comfortable for me to explain to people why something could actually help them out of their misery if they just sit and listen.
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But that's what everybody else's job is to.
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You know, they got to get past the scary feelings, past what their grandmother's been telling them and they have to want to reach for the life raft.
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And if you want to get out of debt, there are very good legal ways to do it, and you should be talking to a bankruptcy lawyer first.
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I love the parallel between everything that you just said and then also what I see within the finance realm, because it's, I would say, on both ends historically has been seen as like elitist in some aspects, in the sense of where, you know, wealthy people think of bankruptcy.
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The same, the way that you're trying to explain to everyone as a tool, and that's the same thing with, you know, financial literacy, investing everything of that nature has always been seen as an elitist thing and not something that the common person can benefit from or, you know, even just understand person can benefit from or, you know, even just understand and being able to simply provide the information that for so long they haven't had access to because it's been, you know, gatekept for the elite, and by providing the information and breaking it down into simple terms that people can understand, it's makes such a huge difference, like you said, especially when it comes to the bankruptcy aspect, that it takes away that shame and makes them understand how to properly use it in scenarios that can be extremely beneficial to them when other options are not available.
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I would also suggest to you that the lending industry has been.
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They have actively tried to.
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They have actively tried to encourage people to believe that if they carry debt, that they should be personally responsible, that it's their problem.
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And the important thing is, and the thing I really want to get out whenever I'm talking to somebody about bankruptcy and debt, is that I think most of us misunderstand or have assumptions about how people get into debt.
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And while it's, of course, overspending is a component, the reality here is that there's about eight major ways people end up in a situation where they are in unmanageable debt, and it's everything from the death of a spouse that's a big one A major medical event which is going to generate medical expenses, and it's going to pull you out of work.
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If you're the breadwinner for your family, that's going to have a cascading effect on your mortgage, your utilities, everything else.
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Divorce obviously Everybody's losing in a divorce.
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There's no way around it.
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You're supporting two households now on the same income.
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You used to support one.
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Something's going to have to give, things have to be given up and a lot of have bankruptcy.
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We wouldn't have Walt Disney, we wouldn't have Heinz ketchup and we wouldn't have cars, because Walt Disney and HJ Heinz and Henry Ford all filed bankruptcy before they became famous, because they had to learn how to be businessmen.
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And that is really what bankruptcy exists for.
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It's because we are risk takers and we want Americans to take risk.
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But when we have the death of a spouse or loss of a job, or a major medical event, or we have a child who's in rehab and we now have to take care of grandchildren, there are so many reasons for ending up in debt that people don't give any grace for.
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One of them is overspending, and it's usually in combination with some of these other things.
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I'm getting a divorce.
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I need a crib for my kid in this new house.
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I got to put it on a credit card.
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Yeah, that has to happen, and that is why bankruptcy is designed to deal with the lowest level, most dangerous category of debt.
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You don't get a free house in bankruptcy.
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You don't get a free house in bankruptcy.
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You don't get a free car in bankruptcy.
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You don't get to get rid of your child support obligations or usually your taxes or your student loans.
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There are things you can't get rid of.
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So the things you can get rid of everyone needs to understand those are the dangerous, predatory debts that are designed to go away in a bankruptcy.
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That's what it's here for you.
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Well, and a lot of this lending is predatory, what a lot of people don't really recognize.
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I mean, you have 28-day billing cycles on a lot of things and people don't understand that.
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They don't understand compound interest.
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They don't know the difference between interest on a car and interest on a credit card.
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A lot of people don't realize that historically there were laws in place that protected us against consumer lenders.
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They were laws called usury laws, and usury laws were put in place at the turn of the century, back in the 1900s, because, in response to organized crime were just off the boat in 1915, back in the day, and you wanted to start a little bread company in New York and you went to the bank and they wouldn't lend money to you because you're Italian.
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You'd go to the mafia to borrow money and they would charge you 100, 200, 300 percent interest.
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And so usury laws were actually enacted in order to protect people from organized crime.
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And so for so long and for many of our grandparents and parents, those laws were in place throughout the 60s and 70s and even into the 80s but it was in the 80s when they started to completely be dismantled and taken away, because we don't have, because we didn't have organized crime anymore.
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We had corporations and they had a lot more money and they began lobbying.
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And so, as we sit today, in the United States of America, there's only one group of people who have any consumer protections against interest in the United States and that is active military.
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Under the Military Lending Act, lenders cannot charge more than 38 percent interest to active military members.
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That's it.
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It doesn't apply to veterans, it doesn't apply to gold star families, it doesn't apply to literally anyone else, it doesn't apply to people on social security, it doesn't apply to anybody else.
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And that means a lot of people don't realize.
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I had, I just I had a great video a couple of weeks ago showing an actual loan where somebody had a 499% interest loan, and this is something that you and I don't even know.
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I mean, we don't see this, you don't just realize it's happening.
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You have no idea how many people have 500% consumer loans that they don't even understand these loans, and that's what I mean when I say it's predatory.
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We have the payday lenders on the on.
00:25:57.045 --> 00:26:05.313
You know, in strip malls, you know, telling people to just, you know with with dancing, dancing animals out front saying, come on in and get your money.
00:26:05.313 --> 00:26:15.261
It's very similar to what we were experiencing on college campuses back in the day, when they'd shoot the t-shirt out of a gun, you know, and if you caught it, you could sign up for a credit card.
00:26:15.261 --> 00:26:32.169
I mean, it's just different tactics, but it's all the same concept and it's a system that is designed to trap people, because the American economy needs us to be spending lots of money in order to operate, and they don't care if it's debt.
00:26:32.169 --> 00:26:39.548
And that's why bankruptcy exists, because we all know that these lenders are able to run roughshod completely over us.
00:26:39.548 --> 00:26:46.339
Our recourse, our safety valve, our net to catch us is bankruptcy.
00:26:46.339 --> 00:26:54.469
So if you don't understand how beneficial and safe bankruptcy can make you, then you are not flying with a parachute.
00:26:55.270 --> 00:27:00.028
Yeah, let's get into that, because there's a lot of details that go into bankruptcy.
00:27:00.028 --> 00:27:01.351
You've mentioned a couple, right.
00:27:01.351 --> 00:27:05.027
What does get taken care of, what doesn't?
00:27:05.027 --> 00:27:05.848
What are the risks?
00:27:05.848 --> 00:27:09.237
So, high level, what is bankruptcy, adrienne?
00:27:10.884 --> 00:27:43.218
Bankruptcy is a legal way by which corporations, small businesses or individuals and families can legally either reduce the amount of general unsecured non-priority debt they have and pay it off in an organized period of time, or, if they otherwise qualify, they can actually completely eliminate general unsecured non-priority debt by going through this legal process.
00:27:43.924 --> 00:27:49.298
Okay, and we're going to focus on the individuals, not the corporations and small businesses.
00:27:49.298 --> 00:27:58.078
But from my research, that would offer either Chapter 7 or Chapter 13 for an individual.
00:27:58.078 --> 00:27:58.819
Is that correct?
00:27:59.684 --> 00:28:03.359
That's correct and that is what I do as a consumer bankruptcy attorney.
00:28:03.359 --> 00:28:06.049
I'm not a corporate or business bankruptcy attorney.
00:28:06.049 --> 00:28:13.750
I'm a consumer attorney and I represent people who file chapter seven bankruptcies and chapter 13 bankruptcies.
00:28:13.750 --> 00:28:27.451
People would come to me for the exact same reason and whether or not they're filing a 7 or a 13 is going to depend a lot on some very detailed information about them specifically and the state they live in.
00:28:28.213 --> 00:28:36.805
Okay, Quick question Once we obviously get into the differences between the two of them, is there one that is generally used more than the other?
00:28:38.588 --> 00:28:52.567
The answer to that is that there is one that is easier, that everybody wants to be in, and there's one that is harder and is a gut check and people oftentimes aren't really sure if that's the one they want to do.
00:28:52.567 --> 00:28:57.377
But there's one that's easier and that is going to be the Chapter 7.
00:28:57.377 --> 00:29:01.055
The harder bankruptcy is Chapter 13.
00:29:01.055 --> 00:29:15.476
And I think that they're both equally as common to be filed, although I think a lot of people who could file a 13 choose not to because it sounds very complicated and difficult to them.
00:29:16.556 --> 00:29:19.198
Interesting, choose not to because it sounds very complicated and difficult to them.
00:29:19.198 --> 00:29:19.578
Interesting.
00:29:19.578 --> 00:29:23.201
Can we get into Chapter 7 and when and why that would be used?
00:29:23.261 --> 00:29:34.209
And to your point now why is it the easier one?
00:29:34.209 --> 00:29:37.805
Well, let me say that when it comes to bankruptcy, when should you start to consider talking to a lawyer about a Chapter 7 or Chapter 13?
00:29:37.805 --> 00:29:40.946
The answer is really the point in time in.
00:29:40.946 --> 00:30:04.377
If you cannot do that in three years or less without borrowing more money, then you should probably be talking to a bankruptcy lawyer.
00:30:04.377 --> 00:30:17.867
That is my point of view Unmanageable, unsecured debt that you don't have a plan to pay off without borrowing more money in the next three years that is when you should consider talking to a bankruptcy lawyer.
00:30:17.867 --> 00:30:27.638
And when you go to a bankruptcy lawyer, it's at that point that we're going to try to figure out if we can get you into a Chapter 7 or if we have to talk to you about a 13.
00:30:27.638 --> 00:30:30.489
So, a Chapter 7 and a Chapter 13,.
00:30:30.489 --> 00:30:34.154
You'd come to the lawyer at the same time because you don't know what you're going to be in.
00:30:34.154 --> 00:31:00.448
But the answer is before you want to talk to a lawyer, before you do something like borrow against your 401k or borrow against the equity in your home or take out a consolidation loan or go into debt settlement or debt repair, because all of those things are more dangerous than filing bankruptcy would probably be for you.
00:31:00.448 --> 00:31:02.673
So you should get that information first.
00:31:03.815 --> 00:31:11.786
I think most people think that bankruptcy is so bad that it's the last thing that they consider, when in fact it should be the thing you consider.
00:31:11.786 --> 00:31:22.175
Before you do anything like borrowing more money or risking your future retirement or risking the home that you live in, you should always be talking to a bankruptcy lawyer.
00:31:22.175 --> 00:31:29.130
So that's really the turning point that I think for most people, when they have that aha moment that they are not going to be able to get out of this.
00:31:29.130 --> 00:31:32.026
And it doesn't mean that you've fallen behind on your debt.
00:31:32.026 --> 00:31:36.758
Half the people who come to me are still completely current on all their payments.
00:31:36.758 --> 00:31:39.209
That's not the determining factor.
00:31:39.209 --> 00:31:43.258
It's the moment you know that there's no end game.
00:31:43.258 --> 00:31:50.209
That moment is the moment you have to do a gut check and say I need to change something now, because doing nothing doesn't help you.
00:31:50.990 --> 00:32:02.718
That's a very insightful and very different way than, I say, majority of people view it, because even myself, you know I would have I would be leaning towards the side of it's kind of the last option.
00:32:02.718 --> 00:32:04.469
You may have started.
00:32:04.469 --> 00:32:10.113
You're not necessarily behind on your payments, but maybe there's a potential for it, or you've already started to be behind on some of them.
00:32:10.113 --> 00:32:16.116
I never would have necessarily thought, hey, let me go ahead and map out the timeframe, especially the timeframe.
00:32:16.116 --> 00:32:20.747
That was actually very helpful.
00:32:20.747 --> 00:32:28.251
The three years was very helpful in the sense of mapping out, and if you cannot do that without, like you said, borrowing more money, then let's go ahead and explore the options that are available to us through bankruptcy.
00:32:28.251 --> 00:32:29.675
That is very interesting.
00:32:34.515 --> 00:32:37.142
I think it's really important to understand that.
00:32:37.142 --> 00:32:53.789
A very big component of my personal point of view on this matter is that the longer you have debt, the longer you're servicing unsecured, non-priority debt, the longer it is you're going to have to wait before you can robustly save for your own retirement.
00:32:53.789 --> 00:32:57.018
Number one start that business, build wealth.
00:32:57.018 --> 00:33:03.906
You've got to get through it fast and quickly, and the sooner you can, the more robust your future can be.
00:33:03.906 --> 00:33:11.892
And I think people just sit in the misery so long, spinning in circles, borrowing money from here, taking a consolidation loan here.
00:33:11.892 --> 00:33:13.998
It's all still compounding interest.
00:33:13.998 --> 00:33:17.446
You still don't have all the extra money to make these payments.
00:33:17.446 --> 00:33:19.531
You're just moving the payments around.
00:33:19.531 --> 00:33:31.077
And we got to get down to the real, real crux of the problem, because if we don't figure out a solution, then you're going to keep doing this forever and you will never build wealth.
00:33:31.077 --> 00:33:40.838
And the entire goal here, the entire purpose of bankruptcy, is to move you through a difficult time financially and get you back right.
00:33:40.838 --> 00:33:42.972
And that's the thing people don't understand.
00:33:43.144 --> 00:33:44.309
Bankruptcy is not the end.
00:33:44.309 --> 00:33:46.613
It's not that you're not crashing the car.
00:33:46.613 --> 00:33:51.317
You're pulling it off the highway and letting AAA fix it and getting back on.
