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Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
Use LegalMatch to Find a Local Trustworthy Lawyer in Your Area.
In my quest for legal
representation to assist me in my current financial distress, I
have found a great deal of disparity in the quality of legal
resources available. This should be no surprise when you think
about it. Lawyers and attorneys all have varying educational
backgrounds and varying real world experience. Plus, they are
only people and will inevitably let their own personal morals
and natural tendencies influence their professional character (i.e.
certain lawyers will find a successful business one way and
promote that business model wherever possible). Also, keep in
mind that lawyers and attorneys are people that have to feed
themselves and their families; and they are working to make
money and pay their own bills.
To demonstrate this, look
at the following email that I sent out to various Florida
lawyers and see the varying responses that I got:
Letter from me to the lawyers:
I am looking into my options for
bankruptcy. I am in a house that I am unable to pay for.
I still make about $###,### a year; but I have other
real estate properties that will not rent for enough
money and I have been unable to sell them.
I am possibly interested in
bankruptcy only if it will allow me to keep my current
residency. If I cannot keep my current residency, I may
be better off moving into a rental property and seeing
if the banks ever pursue deficiency judgments against me
(which is likely as the values are all now cut in half).
I have very little unsecured debts.
Student loans are my biggest at $##,###; but I do not
think bankruptcy will erase them, but that is fine as
the only debt I am behind on are the real estate debts.
I travel a lot so email is best for
me, but I could schedule a phone conference if needed or
office visit.
I appreciate any information that
you can provide; and hopefully, this down real estate
market will recover before I am forced into either
foreclosure or bankruptcy.
Thank you, and I look forward to
hearing from you.
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Now, these are the three responses that I received from
the lawyers:
Letter from First Lawyer:
Dear Sir;
I do not need too much more business. However I
would be happy to meet with you for a free consultation.
Not everybody needs to file bankruptcy because of their
rental houses go into foreclosure and you can keep your
current residence as long as you continue to pay the
mortgage on it. Student loans cannot be discharged in
bankruptcy so you have to still pay them. You may be
over the median income to file chapter 7 bankruptcy
since you make $###,###. It depends on if you have
dependents like wife and children and how many. You can
let the rental houses go into foreclosure without
bankruptcy and continue to pay your other debts. If the
rental properties do go after you for deficiencies you
can either settle with them for a discounted amount or
file bankruptcy at that time.
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Letter from Second Lawyer:
Dear Sir;
Assuming that
you are a resident of Florida for the last 180 days and
that your $###,### income is your only income - there is
no spouse who is also making an income, your only option
is Chapter 13. You can keep your residence
and surrender all of the rentals. The catch is
that you are going to have to pay all of your net
disposable income (net income after taxes less living
expense budget set by the court) to a Chapter 13 trustee
for five years. You will also have to surrender
any and all tax refunds. The benefit is that you
get a discharge of all your debt (the student loans can
be paid though the 5 year plan).
Doing nothing
an forcing deficiency judgments is not a good choice.
A judgment on a credit report is worse than the stigma
of bankruptcy because it represents a possible and
probable interruption of your income stream. You
will find it difficult, if not impossible to secure new
loans for motor vehicles or even credit cards.
Once the judgment's hit you may see your credit card
rate of interest go to the maximum allowed by law.
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Letter from Third Lawyer:
Dear Sir;
You must vacate.
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Funny, huh, how the three responses differ.
Considering that I am making life-changing decisions based on
legal counsel, consistency would be fantastic; but I think it is
clear that I will not be getting that. As a result, I will have
to chose whichever one in which I feel most confident and make
my life-changing decisions based on those answers.
The best advice that I can give to all of you out
there in similar situations is to
NOT
just go to ONE lawyer. Go to as MANY
lawyers as you can to get a feel for the variety of their
experience and education and positions. After that, pick the one
in whom you have the most confidence and go from there.
Remember: This is Your Life. Only you can
really make the decision, but make sure you get as much
information as possible from as many reputable sources as
possible before you jump and make the decision.
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