Jen Lee – Page 7

January 10, 2019 By Jen Lee

The Most Important Part of Your New Year’s Resolution

Every year, we all vow to lose weight and pay off debt. We are very predictable creatures. Those are the top two resolutions for people who actually make resolutions. While it’s great to have a goal, many forget the most important part of reaching a goal:

Create a plan!

When it comes to debt, it’s very hard to pay off all of your debt if you don’t know how much you owe, what your options are, what you can do, and when you should do it. I often see people give up on their goals because the goal is so big that it becomes this overwhelming thing that you can’t even imagine.

So, what does a plan look like? Where should you start?

List out everything you owe, including balances and monthly payment amounts. This is the scariest step, but it really helps to figure out where to go next.
If the list looks overwhelming, commit to getting yourself some professional advice on your rights and options (schedule with Jen Lee Law).
Create a budget so you know how much you have to pay towards debt every month.
Decide on the order you want to tackle the accounts.
Develop a few milestone points where you celebrate what you’ve accomplished.

Finally, remember that your plan has to be based on what works for you. There is no one-size-fits-all approach to accomplishing any goal (see last week’s post about more than one way to skin a cat). If you know that you need someone to keep you accountable, find that person. If you know that you have a weakness for online shopping, delete your saved credit card information out of the shopping cart (Amazon, I’m looking at you). If you know that numbers are not your friend, ask for help. You can always schedule an appointment on our website to review your budget and your rights and options.

This is just a basic overview and is not legal advice specific to your situation. If you have questions about your rights when it comes to debt and credit, you should speak with an attorney in your area for legal advice. If you live in California or North Dakota and would like to speak with Jen Lee Law regarding your situation, please schedule an appointment.

January 3, 2019 By Jen Lee

Lies You Find on The Internet

Nothing makes me more frustrated than finding out someone read something on the internet that was wrong and then it influenced that person’s decision.

Last week, I had a colleague reach out to me regarding a company that his client hired to help him with some debt issues. The client thought he had done debt consolidation, but the company’s information on their website says that they only do debt settlement or debt negotiation. So, the first issue was the client likely did not fully understand what he had signed up for in the first place.

Then, I started looking at the company’s website. It gave wrong information about the benefits of their program and also very wrong information about the difference between debt settlement and bankruptcy. Here is the paragraph from their site that I am going to pick apart:

“Bankruptcy is an option that is generally treated as a last resort and if you need to protect appreciating assets. It will remain on your credit report for as long as 10 years & you can be denied employment, state licenses, insurance, as well as tenancy of an apartment. Most importantly, you can be denied virtually any type of credit with a bankruptcy on your report for several years. In addition, since the bankruptcy laws have changed recently, it is even more difficult to qualify for Chapter 7, the method of liquidating assets to eliminate your debt. You will not be allowed to discharge alimony, child support, taxes, student loans, judgments, or any loan on the bankruptcy petition. Under Chapter 13 bankruptcy, your debt payments are simply restructured meaning you will still have to pay a percentage of your debts while you suffer the consequences of bankruptcy. Debt negotiation is an alternative to bankruptcy.”

How is this wrong? Let me count the ways.

There are very specific situations where a bankruptcy can be used against you in employment and they are very few. I did an interview on this topic with Kira Feick of Ignite HR because it’s such a misconception.
For insurance, your credit score cannot be used to raise your rate or deny you insurance in California. If you consent to using your credit score, the only thing the insurance company can do with it is lower your rate.
You can be denied credit for anything at any time, whether you have a bankruptcy or not. However, you qualify for a mortgage a year after bankruptcy and a car loan immediately after bankruptcy. You will receive credit card offers BEFORE your bankruptcy is completed. If you are in a debt settlement program, you will not get credit because all of your accounts are in collections.
The bankruptcy laws have not recently changed. The last time there was a significant change in qualifying for bankruptcy was 2005 (14 years ago…). There are also a number of ways to qualify for Chapter 7 (and sometimes Chapter 13 is a better route – see last week’s post).
The list of things they say you cannot discharge is pretty much wrong. You can discharge taxes in many circumstances, judgments, and all personal loans.
Finally, they try to scare you by saying that in Chapter 13, you still have to pay your debts back. Shocking. You have to pay more back with “debt negotiation” than with Chapter 13 in most cases. Again, see my recent post on what’s so great about Chapter 13, because people generally recover much more quickly from filing Chapter 13 than trying a multi-year debt settlement program.

Researching online can be a good thing, but make sure that you make your final decision based on knowing all of your rights and options, not just the one they are trying to sell you.

December 27, 2018 By Jen Lee

There’s More Than One Way to Skin a Cat…and Other Bad Clichés.

We’re often talking about resolutions and fresh starts at this time of year. So, I’m going to go off on a little philosophical side-trip through a problem that I see happening a lot and it has more to do with mindset and misinformation than anything else. And, it doesn’t just happen in the debt and financial world, but I see it with almost every industry out there. The tendency for people to say things like:

“That’s not how things are done.”
“That’s not how we do things.”
“You can’t do that, no one else does it like that.”
“I can’t do anything about it because I don’t have any other choice.”

Many of our blog posts come from recent news or client experiences. This particular blog post comes from my own recent experience and the realization that there are a lot of people out there who do not realize that there is more than one way to do things, including dealing with debt and credit problems.

Have you ever posted something on Facebook that you thought was a great thing and just wanted to share it with your friends? Then, someone comes in and tells you whatever great thing you posted was not the way things should be done and there is nothing you can do to convince him otherwise? At first, I wanted to be annoyed with the comment, but then realized that I deal with this every day. I hear all day, every day, that there are no options, no one to help, and that even if there is an option, it’s the end of the world.

What if there are other ways to do things? What if there are other options? Would you want to know about them? Here are a few tips when your mind tells you something is impossible or can’t be done because blah blah blah:

Stop. Pause for a second. Stop jumping to “this won’t work.” This is one of the hardest things to do. I still catch myself immediately trying to come up with reasons something won’t work and have to stop my brain from running away with reasons.
For each suggestion or idea, try to come up with a way to make it work, even if it feels a little silly. Instead of making excuses for why something won’t work, try to think of any possible way it could work.
Look for others with ideas and solutions. Don’t look for others who are making the same excuses or avoiding trying new things. To be a bit blunter, get out of your bubble. I know it’s comfy there, but the tendency to fall back into the notion that things have to be done a certain way is much higher in the bubble.
Finally, when you do find out your options and realize that there is more than one way to do something, keep moving forward and make decisions. It’s easy to try and hide from difficult situations, but the stress of not doing anything about the problem is way worse than the hope you feel when you start acting on your options.

So, I realize this post has very little to do with the technical aspects of solving debt and credit problems, but what if? What if there is someone out there who can help you? What if thinking about doing something differently would help your business succeed? What if finding others who don’t think things have to be done the way they’ve always been done helps you move forward?

December 20, 2018 By Jen Lee

What’s So Special About Chapter 13?

Whenever I mention Chapter 13, I get looks of horror from clients and people listening to talks I give about financial stress. Chapter 13 is a repayment plan of 3-5 years and many seem to think that it is the end of the world, so I decided to do a blog post about how powerful Chapter 13 really can be in the right situation.

Why declare bankruptcy if I have to pay it back??

The first thing that is totally misunderstood or misrepresented about Chapter 13 is that you have to pay back everything you owe. While that may be true if you have a lot of equity in your house or other assets, Chapter 13 often results in a very low payment to unsecured debts like credit cards. In fact, many cases pay back 0% to credit cards. However, Chapter 13’s power comes in being able to pay back other debts (like taxes or mortgage arrears), relieving the pressure of minimum payments, and restructuring what you have so that you come out of the payment plan with a fresh start.

Isn’t debt settlement a better option?

Yes, debt settlement is a better option…for debt settlement companies. I always explain to clients that Chapter 13 IS debt settlement, but with a court order. There is little to no negotiation and the court reviews everything to make sure that creditors are getting what they are legally entitled to under the bankruptcy law. Again, that often means that your credit card companies get a small percentage of what they would under a debt settlement agreement.

But, my credit is ruined for 10 years and I can’t buy a house for 10 years!

Wrong. You can actually buy a house while in Chapter 13. If someone offered you a deal that you could be out of debt in 5 years, buy a new house, and have a 700 credit score (or higher) if you agree to make a monthly payment on time each month, would you say no or that it is a horrible idea? Not that Chapter 13 is all fun and games, but it’s a viable tool for getting a fresh start, clearing debt, and restructuring.

Aren’t the only people filing for Chapter 13 bad with finances?

Nope. One of the analogies I often use is that business owners and successful individuals do not have a problem using the laws as needed to get the best deal, whether it is tax planning, estate planning, or yes, even bankruptcy. There seems to be this idea in more middle-class populations that using laws to our advantage is somehow taboo and even unethical. Whether you are bad at finances or not, understanding the rights and options available to you is a smart move. Please note that I’m not encouraging people to run out and file bankruptcy for the fun of it. My point is that sometimes the smartest move is to get back on track and avoid the possibility of being homeless before the financial stress of the situation causes bigger problems.

So, this post was written a little tongue-in-cheek. I find that there is so much misinformation about what Chapter 13 is, what it can do, and why it’s often a good thing, that I tend to get a bit sarcastic. However, while Chapter 13 isn’t always a fun idea, it can often be life-saving, marriage-saving, and the fresh start that people need to move forward.

January 17, 2018 By Jen Lee

Identity Theft and Tax Returns

If you are not expecting a nice big refund on your tax return, you still want to file your taxes as soon as possible. This time of year, we start getting a lot of phone calls regarding identity theft, rejected tax returns, and missing refunds. The general story is almost always the same:

Jane files her tax return on April 1st. She gets a response back from the IRS that her tax return has been rejected because it has already been filed. Jane knows that she hasn’t already filed her tax return and starts investigating.

She finds out that someone else has filed using her social security number and likely bogus income/deduction numbers that resulted in a mid-size refund back to the scammer’s bank account. Before the whole thing can be tracked down, the scammers are gone with the refund and Jane is left with a mess to resolve with the IRS.

There’s a second part to these stories. Once we find out that the tax return is rejected, we recommend that the victim get a credit report for all family members. At that point, there is often identity theft involving new lines of credit, new car loans, or other accounts that family members have no idea existed.

Another reason to worry this year: Equifax.

I’ve done some writing on the Equifax data breach over the past few months. One big reason to especially worry this year is because of the Equifax data breach. We have no idea who has access to social security numbers and other identifying information. Filing your tax return as soon as you are able cuts off some of the risk of falling victim to this scam.

The Most Important Part of Your New Year’s Resolution

Lies You Find on The Internet

There’s More Than One Way to Skin a Cat…and Other Bad Clichés.

What’s So Special About Chapter 13?

Identity Theft and Tax Returns

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