All posts by mikenorris

Mike has practiced law for 33 years, helping consumers and small businesses with debt problems, lawsuits, and creating good business practices. A small businessman himself, he is well familiar with the problems and growing pains that every business experiences. In addition, he is a strong proponent of budgeting and financial planning for consumers and businesses, as a way to maintain financial stability

Student Loans spotlight: Federal lawsuit claims Navient negligent

I last night appeared on WISH-TV (Channel 8), as the 11 o’clock news ran a segment on student loans, and a recent federal lawsuit.   I was interviewed, and you can view that segment here:  If you have student loans or your friends and relatives do, it is useful to review that segment.

Two days ago the federal government, through its Consumer Financial Protection Bureau (called hereafter “CFPB”) filed suit against Navient Corporation, a large local employer. This corporation is the former Sallie Mae/ USA Funds, which corporation has a significant presence just off of I-69 in Fishers.

The suit has significance to many student loan borrowers, because Navient is the largest student loan servicer in the United States. It services loans for more than 12 million student loan borrowers, including over 6 million customer accounts under a contract with the US Department of Education.  It is responsible for administration of more than $300 billion in federal and private student loans.

It seems the government lawyers wanted to get the case on file before the change of administration today. The lawsuit, filed two days ago, alleges that Navient is not handling department of education accounts properly, and can be viewed here:

Of course, most of us will not want to read all of that legalese.  The pertinent details are quoted in this article, so that student loan borrowers can discern “what the heck is going on”.  Please bear in mind that these quotes are allegations in a lawsuit, not proved facts which have resulted in a judgment in federal court.

Nevertheless, these statements are beyond mere suspicious fantasy, as they are based on Navient records of actual Navient transactions with student loan borrowers.  For purposes of this post (and to avoid confusion) I have listed the allegations by complaint paragraph as listed in that legal document, and have used a different type face (italic) to distinguish my thoughts from those of the federal government.

As the suit explains, most federal student borrowers have a right under federal law to set their monthly student loan payment as a share of their income, but the CFPB alleges:

  1. Navient has failed to perform its core duties in the servicing of student loans, violating Federal consumer financial laws as well as the trust that borrowers placed in the company. Most federal student borrowers have a right under federal law to set their monthly student loan payment as a share of their income, an arrangement that can offer borrowers extended payment relief and other significant benefits. Navient systematically deterred numerous borrowers from obtaining access to some or all of the benefits and protections associated with these plans. Despite assuring borrowers that it would help them find the right repayment option for their circumstances, Navient steered these borrowers experiencing financial hardship that was not short-term or temporary into costly payment relief designed for borrowers experiencing short-term financial problems, before or instead of affordable long-term repayment options that were more beneficial to them in light of their financial situation.
  2. For borrowers who did enroll in long-term repayment plans, Navient failed to disclose the annual deadline to renew those plans, misrepresented the consequences of non-renewal, and obscured its renewal notice to borrowers who were due for renewal. As a result, the affordable payment amount expired for hundreds of thousands of borrowers, resulting in an immediate increase in their monthly payment and other financial harm.
  3. Taken together, these practices prevented some of the most financially vulnerable borrowers from securing some or all of the benefits of plans that were intended to ease the burden of unaffordable student debt.
  4. Navient’s servicing failures, however, were not just limited to enrolling and renewing borrowers in affordable repayment plans. Navient also misreported information to consumer reporting agencies about thousands of borrowers who were totally and permanently disabled, including veterans whose total and permanent disability was connected to their military service, by making it appear as if those borrowers had defaulted on their student loans when they had not, damaging their credit; misrepresented one of its requirements for borrowers to release their cosigner from their private student loan, thereby denying or delaying access to an important feature on many cosigned private loans that relieves a cosigner of responsibility for the loan once the borrower meets certain eligibility criteria; and repeated the same errors in processing federal and private student loan borrowers’ payments month after month, even after borrowers complained to Navient about those errors.
  5. Since at least July 2011, tens of thousands of borrowers and cosigners have filed complaints with Navient, the Bureau, other governmental and regulatory agencies, and other entities about the difficulties and obstacles they have faced in the repayment of their federal and private student loans serviced by Navient.

Wow, that is some pretty language!  As to a subsidiary (Pioneer), the CFPB alleges:

  1. Much of Pioneer’s work relates to the federal loan rehabilitation program, which is a program that allows federal student loan borrowers who are in default to effectively “cure” one or more defaulted federal loans.
  2. In seeking to enroll consumers in the rehabilitation program, Pioneer systematically misled consumers about the effect of rehabilitation on the consumer’s credit report and overpromised the amount of collection fees that would be forgiven by enrolling in the program.

The CFPB further comments on Navient’s “steering” borrowers into high cost postponement of payment (forbearance) instead of enrollment into federally mandated income based repayment:

  1. Navient representatives sometimes initially responded to borrowers’ inability to make a payment by placing them in voluntary forbearance without adequately advising them about available income- driven repayment plans. This occurred even though it is likely that a large number of those borrowers would have qualified instead for a $0 payment in an income-driven repayment plan at that time. Indeed, over 50% of Navient borrowers who need payment relief, and meet the eligibility criteria for income-driven repayment plans, qualify for a $0 monthly payment.
  2. For example, between January 1, 2010 and March 31, 2015, nearly 25% of borrowers who ultimately enrolled in IBR with a $0 payment were enrolled in voluntary forbearance within the twelve-month period immediately preceding their enrollment in IBR. Similarly, during that same time period, nearly 16% of borrowers who ultimately enrolled in PAYE with a $0 payment were enrolled in voluntary forbearance within the twelve- month period immediately preceding their enrollment in PAYE. The majority of these borrowers were enrolled in voluntary forbearance more than three months prior to their enrollment in the income-driven repayment plan, which suggests that forbearance was not merely offered to these borrowers while their application in an income-driven repayment plan was pending. Because they were placed into forbearance before ultimately enrolling in an income-driven repayment plan with a $0 payment, these borrowers had delayed access to the benefits of the income- driven repayment plan. They were also subject to the negative consequences of forbearance, including the addition of interest to the principal balance of the loan, which they potentially could have avoided had they been enrolled in the income-driven repayment plan from the start.
  3. Navient also enrolled an immense number of borrowers in multiple consecutive forbearances, even though they had clearly demonstrated a long-term inability to repay their loans. For example, between January 1, 2010 and March 31, 2015, Navient enrolled over 1.5 million borrowers in two or more consecutive forbearances totaling twelve months or longer. More than 470,000 of these borrowers were enrolled in three consecutive forbearances, and more than 520,000 of them were enrolled in four or more consecutive forbearances. For borrowers enrolled in three or more consecutive forbearances, each forbearance period lasted, on average, six months. Therefore, hundreds of thousands of consumers were continuously enrolled in forbearance for a period of two or three years, or more. Regardless of why these borrowers did not enroll in an income-driven repayment plan from the start, their long-term inability to repay was increasingly clear as each forbearance period expired. Yet Navient representatives continued to enroll them in forbearance again and again, rather than an income-driven repayment plan that would have been beneficial for many of them.
  4. Enrollment in multiple consecutive forbearances imposed a staggering financial cost on this group of borrowers. At the conclusion of those forbearances, Navient had added nearly four billion dollars of unpaid interest to the principal balance of their loans. For many of these borrowers, had they been enrolled in an income-driven repayment plan, they would have avoided much or all of their additional charges because the government would have paid the unpaid interest on their subsidized loans in full during the first three years of consecutive enrollment.

The CFPB also showed concern about Navient’s practices in failing to counsel income based repayment (IBR) customers concerning how they could continue in the IBR process:

  1. A federal student loan borrower who is enrolled in an income- driven repayment plan must certify his/her income and family size to qualify for an affordable payment amount that is based on that income and family size. This affordable payment amount applies for a period of twelve months. At the end of this twelve-month period, the affordable payment amount will expire unless the borrower renews his/her enrollment in the plan before the expiration date….
  2. If the twelve-month period expires because the borrower has not timely recertified income and family size, several negative consequences are likely to occur. First, the borrower’s monthly payment amount may immediately increase from a low affordable amount to one that is typically in the hundreds or even thousands of dollars.
  3. Other significant consequences that will occur when the twelve- month period expires without a timely recertification include (1) the addition of any unpaid, accrued interest to the principal balance of the loan; (2) for subsidized loans in the first three years of enrollment in an income-driven repayment plan, the loss of an interest subsidy from the federal government for each month until the borrower renews his/her enrollment; and (3) for some borrowers who enroll in forbearance when the twelve-month period expires, delayed progress towards loan forgiveness because the borrower is no longer making qualifying payments that count towards loan forgiveness. These consequences are all irreversible.

The “failure to counsel” seems to be born out by the statistics Navient has maintained::

  1. Between at least July 2011 and March 2015, the percentage of borrowers who did not timely renew their enrollment in income-driven repayment plans regularly exceeded 60%. Those borrowers who did not timely renew experienced the significant consequences of nonrenewal, including a payment jump and the addition of any accrued, unpaid interest to the principal balance of the loan.

Later in the court filing, the CFPB concludes that consumer payments were not processed correctly::

  1. As described above, in numerous instances, Navient made errors, sometimes month after month, in misallocating and misapplying payments made by consumers. Moreover, Navient failed to implement adequate processes and procedures to prevent the same errors from recurring, or to prevent the same errors from impacting other consumers.

Abuses regarding releases of cosigners and false credit reporting payment are also alleged The complaint hyperlink above can be perused for details.

This lawsuit is quite troubling, as we attempt to safeguard the integrity of our educational system and the financing of it.  Certainly an objective and close examination of any problems is warranted.  If you have questions, I can be reached at

How the federal government can help student loan borrowers

Because of the structure of lending, the student today with a five year plan to graduate will spend up to a 1/3 of his life (25 years) paying for what he got, an education.  The economic value and quality of the education is, of course, important.

The federal government, through its Department of Education, has rigorous standards.  The Department of Education holds high schools, and even grade schools, accountable to these standards and reviews performance on a regular basis.  Insuring educational value is delivered to the American consumer is a clear and consistent federal goal.

But a breakdown has occurred on the college level: trade schools with inferior instruction and high pressure sales techniques have flooded the marketplace with high cost alternatives to public universities and institutions of higher learning.  These “for profit” colleges are fairly unregulated, and often not accredited by traditional sources.  Studies show their degrees are not given the same respect in the employment marketplace as those from publicly funded universities (such as Indiana University or Purdue) and “not for profit” universities (such as the University of Indianapolis or Butler University).

Sadly, trade schools promising a college education are often institutions of lower learning, less supervised in their access to federal funds than the average high school.  Yet in recent years they have received a large portion of the 1.3 trillion now owed on student loans. This is not small change.

That lack of federal supervision and oversight has been an opportunity for profiteers in the “education business”.  According to the business model many trade schools have endorsed, overpromising is just “good sales technique”.  Likewise, underdelivering is a way to “keep costs down” and profits up.  Unfortunately, this way of thinking is now pervasive: institutions of higher learning are thinking on a lower level, about profit achievement more than educational achievement.

Certainly the US Department of Education did not, and has not, endorsed such behavior.  But it has funded those schemes, using billions of dollars of federal student loan monies.  With all that money gone from the federal treasury, the student is expected to pay the US Department of Education regardless of high cost and little value.  Meanwhile, the student’s debt load has increased dramatically, but his earning power has not.

The trade school closures and bankruptcies, most recently ITT and Corinthian, create for the federal government a public relations nightmare:  the government must now collect from naive students the “ill gotten gains” which enriched institutions of lower learning in the billions of dollars from taxpayer funds.  As a former full time college professor for 6 years, I find this offensive.

Because the US Department of Education disbursed those funds without effective oversight, it now must find someone at fault.  Better late than never, as the old saying goes. If the US Department of Education can find someone to blame, so the reasoning goes, that federal agency can escape criticism of its role in this massive disbursement of federal funds without oversight.

The student loan debt is now owed to the federal government (through the Department of Education).  According to the debt arrangement, the federal government will now hold the student accountable for what was done.  For now, the federal government holds the student accountable for what was done by him, and likewise holds him accountable for what was done to him.

In this search for accountability, the US Department of Education has first pinned the blame on closed schools, but only to the extent the student was active in that time frame in seeking the degree.  As to the “real world economic value” of the product the student bought, this is not considered.  Nor is the cost considered, even if that cost is exorbitant for results obtained. Nevertheless, it is this undefined “price/earnings ratio” which will show the true value of the degree over time.

It would appear that the violations which the Department of Education has cited against ITT in recent years prove the point:  ITT was negligent.  But there is not yet an admission that all who supervised ITT and other schools were also negligent.  This would implicate the US Department of Education, the source of funds.  As to the student, that naïve student was the least effective or capable in supervising the trade school. The purse strings were held by the US Department of Education, without monitoring the use of those funds.

Nevertheless, the Department of Education has said in recent investigations that “the actions we are taking against ITT… are based on operational and financial risk…not on the finding that they (ITT) defrauded students”.  With this statement and policy on the part of the Department of Education, it would seem that erasing these student loans for those who have received modest benefit will not be easy, unless the school closed while they were enrolled currently.

A review of the Department of Education website indicates that the student loan discharge rules are numerous and restrictive. Nevertheless, it is the opinion of this author that those rules are arbitrary.  Federal judges can review such rules in bankruptcy proceedings creating “new rules” for discharge of student loan debt, on an individual basis.

For the time being, those rules are administered by collectors who receive a commission rate of 13 to 18% for collecting funds. They are not in the business of giving students a break.

Further review by the US Department of Education shows well documented abuses by student loan collectors, who do not discuss all options with students, as the collector hopes to funnel the former student into a profitable collection system. Thus, the US Department of Education makes it clear that they do not wish to deal with the issue of high debt and little value for the student.  The US Department of Education would rather delegate the task of considering the student’s dilemma to collectors working on commission.

Due to lack of oversight and abuse of federal funds, the United States Department of Education has issued “school fraud” rules for schools which accept federal student loan funds.  In short, these rules would limit, as of November 1st, 2016, the availability of these funds for schools which failed to demonstrate an educational benefit in line with the cost.  Of course this is the right rule for the future, regardless of whether the school is public or private, a “not for profit” or a school organized as a business.

But what about the past lending mistakes which have burdened low income students with high debt?  The bankruptcy in May, 2015 of the Corinthian Schools network caused the alarm bell to sound.  This publicly traded trade school/company had enrolled more than 70,000 students the year before, at more than 100 campuses.  This was becoming quite a massive problem, for more than just a few students. And trade schools are quite expensive, anywhere for 2 to 4 times the cost of public universities, with the vast majority of their funds coming from student loans.

On September 13th of this year, our own United States representative Luke Messer has filed a bill to restore the G.I. educational benefits for veterans who saw their moneys dissipated with closed trade schools. This could be a significant benefit to many.

Nevertheless, the future looks bleak for trade schools, and many bankruptcies beyond the ITT bankruptcy are anticipated. As to the student with unsustainable loan debt, there may be a silver lining to this dark cloud:  a student’s bankruptcy can adjust student loan debt, contrary to what most believe.

As to the future, the warning signs are clear.  Any college (public or private) which offers poor quality of education and low job placement, lack of transferability of credits, and high student debt can lead to financial ruin for all concerned.

It is time to clean up the mess.  Holding schools and accreditors accountable to the US Department of Education is a start.  The lack of accountability of the past is the next issue, shown in unsustainable student loan debt.  What can be done?  For now, the US Department of Education is of little help except after a school is closed, a fact that the federal courts will examine in adjusting that debt on an individual basis.

With hope for the future, we must look to productive solutions, even if in the courts.  It is important to insure education continues to be a meaningful goal for our youth.

Federal help for ITT students: discharge of student loans

In the light of the ITT technical Institute bankruptcy, many students are left with high student loan debt and no degree.  But there may be some relief available for those who have not yet graduated. It is the purpose of this post to explore those options that the reader might benefit, or pass the information along.

Perhaps a little explanation of the student dilemma in this typical “trade school” is in order. When a school such as ITT closes, the students can’t get the associates, bachelors, and master degrees hoped for;  thus, they are deprived of the “benefit of the bargain”.

For the student, the denial is more than just denial of ego satisfaction.  He has pinned his hopes  on the earning power that degree represents for him.  He anticipates that all will benefit from his efforts.  It will be wonderful for his family.

The school has a different idea:  it is called a profit model.  The measuring stick is the bottom line.  Product quality, marketing, and management are all expenses.  The less expenses the better.  This is what benefits the bottom line.  In this line of thinking, there is no value in educating the customer to become a well informed shopper. The prospective student doesn’t need to know about education cost & education value; such a concern would just interrupt the sales process.

But back to the end result:the school closes.  Now student loan debt is owed on a college degree that won’t be obtained at this institution, and may never be obtained at all.  Without a change of circumstance, the economic power that college degree represents will never materialize.  Some students lose hope, feeling themselves further behind, with more debt and less earning power than planned.

The “Closed school Discharge” is a mechanism put in place by the federal government, to allow the student who cannot complete his degree to seek relief from the student loan burden which he must carry. The information on that federal program can be found at  The form which needs to be filled out to apply for administrative discharge can be found at:  .

Of course, use of government websites is not always as simple as it looks.  There are certain “gotchas” in the administrative procedure, which do not allow the student who transfers his credits to another school (or has already received his degree) to seek forgiveness of his student loans.

As is true with many government programs, the “simple” process has become quite complex. The student who wants to transfer his credits to a new institution often finds most (if not all) of his credits will not transfer.  This is because of lack of accreditation for the trade school from which he is transferring.

ITT Educational Services has increasingly been the subject of state and federal investigations in recent years.  These actions have resulted often in sanctions against ITT and penalties.  Nevertheless,   the US Department of Education does not recognize the validity of their own investigations, when the student who has his diploma petitions for student loan relief .

In  essence, the Department of Education wants each student to prove that he was defrauded, that “what he got” was too expensive for the results obtained.  In short, the student must prove the price of the education far outweighed its real world earning potential.

This burden falls on the student, even though both federal and many state governments are currently investigating inadequate instruction in rogue schools taking federal student loan moies.  Many of these investigations show oversight of federal student loan lending has been lacking.  Most often, significant findings of neglect and abuse on the part of trade schools were left unwatched but then “discovered” by government agencies.

So it can be tough getting an administrative discharge.  If denied, an appeal can always be taken directly to the Department of Education.  This is where the counsel of an attorney experienced in this area can be quite useful.

If the Department of Education administrative discharge appeal is not effective, every student has access to the federal courts. The student may seek to address the student loan debt directly with the Department of Education in an “adversary complaint” in the bankruptcy courts.

Due to the fact that ITT and other schools have recently lost their entitlement to federal funds from student loans, the courts will be burdened more and more with these issues, as will the Department of Education in considering administrative discharges. At this point in time, it seems that many of the “trade schools” in all probability will be closing in the coming months.

The law on student loans is evolving, as new facts come to light about trade schools, quality of instruction, and quality of job placements.  The ITT bankruptcy does not bode well for the student who did not get the benefit of his bargain, either in quality of instruction or job placement: he will have no recourse against ITT. His only recourse will be against the federal Department of Education, a powerful adversary.

Nevertheless, it is the authors opinion that any student who has not been able to complete his degree due to school closure should apply for the administrative discharge.  If there are issues and complexities, as always seem to arise, competent legal counsel should be used to sort out the mess.

The hope of the next generation that an education will bring them to a satisfying adulthood hangs in the balance. We should not let these young folks down, and saddle them with debt which cannot be paid off.

Counting the Cost of Student Loans


Unlike borrowing for housing, transportation, and cash needs, the benefit of a student loan is intangible. Although it may assist in strengthening income over time, that gradual strengthening of income is contingent upon many factors such as type of degree, finishing the degree, health, aptitude for degree specific work, ability to market oneself at a job interview, and local market demand for that skill set.  Large debt for a house or a car gives an immediate tangible result, but  large debt for college does not give one a place to sleep or means to get to work. In that sense, its value cannot be measured in the immediate present.

Normally when a consumer makes mistakes and struggles with too much debt, he can use bankruptcy to adjust his lifestyle and debt. This is not so with student loans, unless a bankruptcy “adversary complaint” is used, which may be uncertain as to result. Thus this consumer debt does not allow for mistakes!

In the worst of nightmares, the student signs on for large private loans, while attending “for profit” schools, if he does not graduate money-dice.jpgand does not advance economically due to education/skills acquired in college, this is bad news.  Without the hoped for benefits of job advancement,  the financed education can assist in creating an onerous burden of debt perhaps too heavy to carry.  Credit report damage and economic pressures can lead to lifelong financial disorientation. Obviously, one is now hampered in other investments such as buying a home, starting a business, making a career change, having children, or marriage to a spouse who chooses to stay at home with the kids.

Regardless of the fact that education is always enriching and worthwhile, the student today is wise to “count the cost”. As a rule of thumb the prospective student loan borrower must ask: “will I make enough in the 10 years after graduation to amortize (and pay off completely in level payments) the entire student loan debt at 7% interest?

To “break it on down”, $50,000 of student loan debt would pay off at $580.54 per month, twice that amount will pay off at twice that amount, 1/2 of that amount will be paid off at 1/2 that amount.  See the chart below.  The big catch is, whatever that amount is, it must be paid every month (on time) for 120 months, no exceptions.  Of course this long term commitment does not take into account job loss or underemployment, divorce, sickness of children or spouse, or one’s own health issues.

And what will it take each month to pay off that $50,000 student loan?  The math says $580.54 per month AFTER that tax man is paid. That means the aftertax dollar must be “bulked up” by 1/3, or $193.51, to $774.06 to be earned each month, so the monies can be taxed by $193.51 and the student lender can be paid $580.54.  And this plan must be steadily carried out each month, on time, for 10 years.

Loan Amount Payment Income needed/month (before taxes) Income needed/year

(before taxes)

25,000 $290.27/mo.

x 10 years


x 10 years

$50,000 $580.54/mo.

x 10 years


x 10 years

$100,000 $1,161.08/mo.

x 10 years


x 10 years


So one must “count the cost”.  If not, student loans are a serious dilemma, and caution is advised.

When it comes to timely payment on any financial arrangement, the ability to pay is critical.  In coming months, I will be commenting on this thorny issue of student loans and the cost of college, in the hope of shedding some light on student loan pitfalls.  Of course, I am in the business of providing practical solutions in financial matters, and I welcome your questions as we explore this topic in coming updates.

How Indiana is dealing with student loan problems

student piggy bank

In practicing law for 38 years, I have thought a lot about money, as I frequently counsel small businesses and consumers who want to make and hold onto their money. I watch incomes and debt loads rise and fall. In the economics of our country and that of many individuals, a growing concern is the dramatic increase in student loan debt over recent years.

Many students borrow to finance their education, and it can be a great benefit for them. Nevertheless, national statistics show that students who borrow to finance an education are now graduating with an average of $35,000 in student loan debt. Here in the US, this is the largest consumer debt category, other than first mortgages. It is larger than credit card debt, second mortgages, and other consumer debt. At this point in time, $1,300,000,000 is owed on student loans.

A recent article in the Indianapolis Business Journal gives us some insight into what innovative thinkers in Indiana are doing to address this growing problem. My thanks to Hayleigh Colombo for highlighting this issue in her article on the front page of the IBJ for May 9th, 2016. Many of her thoughts are echoed herein.

Credit can be given to Mitch Daniels and other serious thinkers on education policy. Purdue ((under Mitch Daniels) has frozen its tuition for a number of years. The student who enrolls for the 2017–18 academic year will pay $10,002 per year, just as he would have paid in the year 2012. This is good news for Indiana students.

Indiana University also understands the problem. IU now sends letters to all student loan borrowers regarding their future monthly loan payment, cautioning them about excess borrowing. This is also good news.

The reason for the concern here in Indiana is obvious. Student loan debt has been rising steadily in past years, as US Department of Education statistics show.

Indiana has not fared well in paying off its student loan debt. At this point in time, Indiana ranks 4th highest among states in student loan defaults. 14.7% of Indiana students who have graduated and are scheduled to pay their loans currently are defaulting, within three years or less.

Debt is used to finance a college education on a very broad basis, with 46% of the freshman at Indiana public universities financing college with student loan debt. On the bright side, both Purdue and IU main campuses have reduced to 36% the number of first year students taking out student loan debt, from a high in 2008 of 41-42% of first year students taking out student loan debt. Thus it seems that more Indiana college students at these institutions are becoming aware of the dangers of financing college.

Another practical step being taken here in Indiana is the use of “banded tuition”. This allows a “package price” for up to 18 credit hours, where the student is enrolled full-time (12 credit hours or more). Despite the obvious advantages, a troublesome report by the Indiana Commission for Higher Education mentions that approximately half of college students take enough credit to graduate on time, but 75% of them expect to graduate on time.
If we assume 120 hours of credit to graduate, the eager and penurious student can take six semesters (including summer school) of 18 hours, plus one more semester of 12 hours, and she can earn a degree in two years and four months. In other words, seven semesters of tuition could be paid, instead of eight semesters.

Further, the student can be out in less than three years, if she chooses to devote extensive time to her education, with few sideline interests to distract her in that period of time. For the student living with the relatives, this can be a way to keep expenses down while on the “educational fast track”. Of course, this can also mean less borrowing for living expenses.

The main problem with student loans is shown in the high default rates: often the payment, which the student has not calculated in his younger and tender years is not affordable in the first 10 years when he enters the workforce. Sometimes, due to unforeseen circumstances, it is not affordable during his entire work history.

In future blog posts, we will examine what to do with the “unaffordable” student loan.

Financing Issues and Workouts

One of the most common causes for failure in a small business is a lack of capitalization. Businesses often start up with too little cash. Over time, this lack of money becomes amplified, and ultimately those businesses fail. The reason why they fail is not that they don’t have a good product, lack integrity in the marketplace, or fail to perform. They fail simply because they have run out of cash, in the middle of a normal learning curve in servicing the marketplace. Of course, loans can be helpful, but they do not replace a good business model, which allows for mistakes along the way and sufficient time to perfect your business approach.

Even without the luxury of borrowed funds, entrepreneurs feel much stress once cash flow problems arise. It’s hard to pay loans, salaries, utilities, and all the other bills that become due. The pressure increases. Whether there are loans or not, the bills must be paid, and relatives, credit card lenders, and banks are insistent. Frequently, the issue becomes the “burn rate”. In other words, “how long can a business hold on?”

Often the bank or lender have no idea what their financial problems are: sound projections and presentation of a good business plan can do much to assist with the renegotiation of debt. In any event, when default on the loan occurs everyone loses. Neithe the bank nor the borrower obtain anything from insolvency proceedings.

For this reason, our office seeks to help entrepreneurs with planning procedures, before cash flow problems arise. Nevertheless, when these crises do arise, sound counsel is necessary to navigate the dangerous waters of default and reassure the bank that the storm can be weathered.

Sometimes assets need to be sold, lines of business need to be assessed for profitability, and real estate mortgages or personal guarantees need to be added to strengthen security of outstanding loans. Nevertheless, if the entrepreneur believes his value proposition is sound, he is wise to “bet the farm” on his expertise, and continue to plow ahead. In these cases, reassuring the bank, returning liquidity to the business model, and moving toward profitability is an immediate necessity many lawyers lack this kind of business experience, and cannot be of help in this area of business. When faced with the task, most human beings like easy work. Negotiation of loans can be hard work.

I still remember the entrepreneur who came to me to explain his business was not profitable, and he didn’t need the large amount of warehouse space that was under lease. In addition, he was in danger of defaulting on the lease, and having the goods warehoused subject to a landlord’s lien. While exploring his options, he realized as we talked that a competitor (who was a dear friend) might be willing to give him storage space, and even assist him with expanded lines of credit. Since moving his location he is much happier, and profitable too!

In another case the individual owned the real estate from which his business operated. By selling the real estate he was able to become current with suppliers, giving him enough time to sell additional customers, enhancing his profitability. Further, the cash received from selling the real estate allowed him to progress forward without financial worries.

Of course, there are a myriad number of options that a good business lawyer helps his clients explore every day. As a small business owner myself, I believe that the key is flexibility. When we listen to our clients, their needs can best be served by applying our experience to assist them in creating satisfactory legal results.

If you are in need of this kind of help, please do not hesitate to give us a call for a candid opinion as to whether we can help in your situation. We would be more than pleased to be of assistance to you. Call us today at (317) 266-8888. As an alternative, you can email me personally at any time:

The Impact of Credit Report Collection Accounts

When applying for a mortgage, everyone knows that your credit report rating is of great importance. If you can lower the interest rate the lender charges you, you can save thousands of dollars each year on hundreds of thousands of dollars borrowed for your home purchase. In addition, as most of us know, the credit report will show your payment history on cars (and other installment loans), and it will also show your credit history on credit cards (and other revolving accounts).

Many do not know that the credit report also picks up the docket from local courts, and reports any judgments that have been filed against you. In addition, one more matter is reported by the Bureau, which is of great significance to those who have borrowed money: their accounts which are in collection.

“In collection” simply means a collection agent is attempting to collect on the alleged debt. This does not mean the debt is owed, or that a judgment has been entered by a court allowing for garnishment of wages. It simply means that the collector is trying to collect money on a debt he says is owed.

You may be “in collections” and not even know it. Nevertheless the rest of the world knows, and the obvious inference is that you’re unwilling or unable to pay your debts. This little known secret of the credit reporting agencies can have great significance when you’re attempting to secure an apartment or job, get a loan, or even get utilities turned on.

Surprisingly, statistics show that 35% of Americans currently have unpaid bills reported to collection agencies, according to an Urban Institute study conducted in the last few months. And it’s not just hospital bills, auto loans, and student loans. Even past due gym membership fees or unpaid cell phone contracts can end up with a collection agency.

And the collectors are always ready. The Federal Reserve Philadelphia bank branch estimate that in 2013 the collections industry employed 140,000 workers, to recover $50 billion of debt that year. Oddly enough, delinquent debt is overwhelmingly concentrated in southern and western states. Texas cities have a large share of their populations reported to collection agencies: Dallas (43%), El Paso (44%), Houston (44%), McAllen (52%), and San Antonio (45%). And the blight is not limited just to Texas. Almost half of Las Vegas residents have debt in collections, and other southern cities a large number of their people facing debt collectors: Orlando, Jacksonville, and Memphis, among others. But some cities fare better, with some demographic populations have low collection rates, just around 20% for Minneapolis, Boston, Honolulu and San Jose (California).

How do these differences come about? Some say this can be blamed on income disparities, and a stagnant economy. US Labor Department statistics show wages have barely kept up with inflation during the five-year recovery starting in 2009, and after-tax income fell for the bottom 20% of earners during that same period.

So what is the morale of the story? The wise consumer will make sure his debts stay out of collection. This practice will reap rich rewards when it comes time to buy a home or car, secure a job or apartment, or secure the lowest loan rates.

Student Loan Debt: Does It Ever End?

I’ve always loved teaching. After working my way through law school in Detroit, I decided that I would try to secure a teaching job as a full-time occupation. In 1973, I taught my first class to a young group of students trying to get their real estate licenses.

When I moved to Colorado in 1976, I immediately looked for a job in education. I couldn’t find a full-time position immediately, so I taught at a number of community colleges. By the time 1978 rolled around, I had secured a full-time teaching job, and I retired from the University of Colorado (where I was a full-time college professor) after six years of teaching full-time. This was a very enjoyable time of my life. I believe that “knowledge is power” and found myself quite satisfied with life as an educator.

Back in the late ‘70s and early ‘80s, there was much less student loan debt. My mentor at the University of Colorado was amazed by the ever-rising cost of college tuition. The rapid increase of administrators and bureaucratic processes from his start in the 1950s was to him quite shocking. He like to fondly recall the “good old days” when the faculty in essence ran the school, set the budgets, and defined acceptable curriculum.

He cautioned me many a time that we did not need so many administrators, buildings, and miscellaneous programs unrelated to teaching and the process of learning itself. In his mind, a college (or a university of many colleges) was simply the faculty and staff absolutely necessary to keep the buildings open. There wasn’t a need for other “nonessential” personnel. I’m sure he would be quite shocked today, if he were alive, to note the many six-figure incomes found on the average college campus for administrators, deans, coaches, marketers, and others who are not full-time professors. The sports budget would have seemed to him most unusual, and the time spent by college alumni thinking about sports would have seemed to him completely unrelated to the primary purpose of the institution. Of course, his love of learning was intense, and it was simply that love of learning which he considered the “bottom line” or essence of a university.

From that point of view, the cost of college tuition needs to be kept down, and the number of services offered (other than the granting of degrees) needs to be modest. Of course, all would not subscribe to that way of thinking.

Nevertheless, the statistics tell a different story. The cost of a college education has increased significantly in the last 40 years, far outstripping the inflation rate in the nation. Even public institutions, which are funded by the state with the primary mission of educating that state’s citizens, have seen rises in tuition that are astronomical.

Of course, from my mentor’s point of view there’s no reason for this, due to the fact that those schools are funded and supported by state tax dollars. In his mind, those tax dollars should pay the entire cost of institutional attendance, other than a very modest and easily affordable tuition. From this point of view the elaborate sports programs, stadiums, and administrative staff (including marketing staff) are not necessary.

What we find today is that college is very expensive even at a state school, with very significant budgets supported by alumni donations, and various subscriptions and fees far in excess of the tax dollars contributed by the state.

The student who doesn’t have tens of thousands of dollars to spare for each year of college education find himself taking out student loans, hoping that the value of the education will help him pay back this significant loan debt.

Gaining relief from student loan debt is not easy, as it is not dischargeable in bankruptcy. Nevertheless, the federal government is now attempting to use a program called “income-based repayment” or IBR to address for students the significant burden they bear in paying back student loans when just out of college.

Although income-based repayment is an excellent solution in theory, many servicers are slow in processing the request for payment adjustment, and this can cause significant hardship. The cost of college tuition is still quite high, as governments (which once assumed almost all the risk of college by heavily subsidizing the cost), are now withdrawing a large portion of their support. One could easily ask the question: “is it wise for state and federal governments to ask the young and impecunious student to bear larger and larger portions of the cost with student loans to finance increasingly expensive college education?”

At this point in time, 40 million people hold student loans, and that debt has risen to $1.1 trillion, compared to $300 billion just a decade ago, according to research by the Federal Reserve Bank of New York. Student loans are now the third largest form of household debt in America today, and 7 million borrowers are in default, with many more behind on their payments. Young borrowers, fresh out of college, often do not realize that with a damaged credit record they face higher interest rates on all goods (including cars and homes), and could easily be rejected on apartment rental applications, or lose job opportunities where credit is evaluated. Indeed, the cost of college and the financing of it is one of the larger crises in the lives of young people today.

One study by Brent Ambrose, a professor risk management at Pennsylvania State University, indicates that the burden of student loan debt may cause people to take different directions in their life choices. Those who are burdened by too much debt are less likely to start businesses, and have a much harder time shouldering the load of a house payment. As Ambrose puts it simply, “when students use up their debt capacity on student loans, they can’t get committed elsewhere”.

This sort of financial disruption shuts down the ability of the young entrepreneur to create a new business, and also affects career choices, such as working in a low-paying teaching job simply because you love to teach.

I seriously doubt that the cost of college tuition will be coming down dramatically in the near future. But we must find a way to finance college educations so that young people are not overly burdened with debt immediately after coming out of school, debt that frequently cannot be paid. Should the federal or state government take a greater hand in subsidizing college costs, and in restraining unrestricted growth of expenses on college campuses? Only time will tell, but the question is worth asking and considering.

Who Pays What and How? Confusion Between Insurers, Medical Providers, and Patients

As all of us know, medical debt is a growing problem in this country. People are living longer, and medical complications arise with age. Insurers have created a complex payment system, and medical providers often worry whether they’ll be paid or not. In the midst of all this, medical costs have skyrocketed, with many consumers unaware of what they’re being charged, or how they can afford to pay the bill. It’s been said that the country is going through a medical crisis; with a rapidly changing environment for care, cost, insurability, and long-term sustainability of our current medical care system.

In this blog post I’m not going to look at the role of medical insurance providers, nor the quality of care provided by our healthcare system. I want to discuss how the medical provider is paid by the patient, when insurance doesn’t apply, and the consumer has no quibble with the quality of services he was provided.

It often happens that consumers are taken by surprise when it comes to medical costs. An unexpected visit to the emergency room or a sudden medical crisis can cause costs to spiral out of control. Assuming insurance doesn’t cover the medical costs, what options does the patient have to negotiate the cost of medical services? Obviously, this situation is aggravated by the fact that many times a patient doesn’t have time to “shop around” in order to find the right price for comparable medical services.

Of course, it is a far more transparent transaction when the insurer isn’t involved. Third parties tend to make the negotiation between the first two parties more complex, and more difficult. When a patient can deal directly with the doctor or hospital, he or she has a greater awareness of what he’s committed to pay, and how best to move the transaction forward.

Aside from cost, a lawyer looks at the transaction as essentially a contractual one. The parties get together and agree on particular services to be provided, and those services have a particular market value. Regardless of what the parties have agreed on in terms of price, the contract is effectively completed by the performance of the services. But what happens when there is no agreement on price? Is the consumer cut off from the option to negotiate, when he didn’t know exactly what he was being charged, and the service was provided without discussion of cost?

This is the essence of the dilemma that patients face. Let’s say, for instance, that a patient receives emergency services (for which he is grateful). After he gets home from the hospital, he wants to pay the “fair market value” of the services, but was never told the cost. When he is confronted with the bill a number of months later, from a number of different providers to whom he has no relationship, what is the appropriate charge which should be paid? Is he bound to all of those providers for monies to be paid as stated in each invoice? What if he gave no consent to the provision of all of those individual services, and never met a number of those individual providers? As every consumer knows, these decisions can be a fairly exhausting set of concerns.

But the law looks at this type of situation in a much more straightforward manner. If there was no agreement on price, price being one of the essential terms of the agreement, there is no enforceable contractual arrangement. In essence, the consumer is free to negotiate with the provider as to the fair market value of the services after they have been provided, due to the fact the provider failed to secure agreement on the contract price. Failing to get the consumers agreement, there is no contract price, and the price is then open to negotiation by the parties.

This brings up the legal theory known as quantum meruit, which is a Latin phrase meaning, “how much has been earned”. Through comparing a particular medical service to other similar services in the marketplace, the consumer can bring a qualified expert opinion in to make the case as to an appropriate price. Obviously, medical providers don’t wish to squabble over the price they’ve stated is due. Nevertheless, the patient has the right to negotiate, and given competent evidence of the fair market value of the service, he has the right to pay what is deserved, not what is claimed.

Of course, all of this can become fairly tangled in the legal transaction, as medical providers do not wish to communicate on these issues, they simply wish to have the bill paid. If the bill they assert is due is not paid, typically they will send it to collectors and the collector will demand payment or put a negative reference on the credit report.

Moving further along, the medical provider may send the bill to an attorney who will seek a judgment, with the consumer totally unaware of the dangers involved until they eventually receive notice of garnishment. Once a judgment is obtained, the medical provider may issue a garnishment of wages, attachment on bank accounts or other property, or a lien on the consumer’s home. Of course, these are fairly harsh remedies, given the fact that there was no agreement on price when the service was performed. This type of process is often a one-sided transaction: “I billed you as I pleased, and now I’m going to take it out of your wages”.

Do you have a medical bill over $20,000 that you suspect is not in fact a “fair price” for the service performed? I’m happy to consult on these matters, and may be able to help you get some relief, if approximately 60 percent of the bill can be paid in cash. Quite often, the amount that’s owed to the medical provider, according to the Social Security reimbursement standards, is approximately half of the bill which the medical provider demands is due. Should you choose to investigate these matters, please do not hesitate to call our office, and ask to discuss these matters with me personally. Give us a call at (317) 266-8888, or email me directly at

Offers In Compromise To The Indiana Department of Revenue

In a procedure similar to the federal offer in compromise, the state of Indiana allows a taxpayer to be considered for a lesser payment, provided he makes full financial disclosure and is current on tax filings.  According to the rules of the Department of Revenue, an offer in compromise can settle a debt which is owed for a lesser amount in two ways:  1) with a “one time” lump sum payment, or 2) with a short payment plan starting with an immediate down payment.  If a payment plan is proposed, these offers are considered most favorably if they are for 24 months or less.

Of course, many taxpayers want to consider the offer in compromise after a levy of wages or a bank account freeze.  Most often, this is an attempt at settlement that is “too little too late”.  At this point, bankruptcy should be considered to stop the collection process.  Bankruptcy is normally quite effective here, and I have used it personally many times as a negotiation tool, or as a remedy of last resort.

Nevertheless, if income is fully disclosed (including past tax returns), and income and expenses are documented in detail, an offer in compromise will be considered.  At the time the offer is submitted, the  specific down payment should be forwarded, along with the taxpayer’s proposal for a monthly payment amount. Note that the down payment must be received with that offer before it can be considered.

The Department of Revenue reserves the right to review these cases periodically even after they have been accepted and payments commenced.  They may require updates on information previously submitted. However, if all future returns are filed on time and all amounts due are timely paid, the chances are good that a taxpayer who has had his offer in compromise accepted will be able to successfully complete the program.

Having reviewed a number of these situations with the Department of Revenue, it is my opinion that offers in compromise are difficult to achieve, through the Department of Revenue Taxpayer Advocate Office.  Nonetheless, working with the revenue officer at the government center in downtown Indianapolis frequently will lead to a settlement that is effective for all parties.

Questions?  Please don’t hesitate to call and talk to me personally, at (317) 266-8888.

How The IN Department Of Revenue Enforces Tax Collection

Once a demand is made, the Indiana Department of Revenue (“DOR”) expects a reply in 10 days.  DOR has very powerful options at that point: if the taxpayer has not responded, DOR can cause liens to be placed on the property of the corporation or  individual. Of course, this affects credit ratings and the ability to borrow money.  The ability to sell titled properties is also hampered.  In short, a bad situation will rapidly get worse.

Many interesting possibilities are provided for by Indiana laws, specifically Indiana Code 6–8.1–8 –1 and following sections up to 6–8.1– 8–17.  These are the collection provisions for “trust fund” taxes in the Indiana code.  The first enforcement action from the Indiana Department of Revenue is the issuance of a demand notice. If the demand is not paid within 10 days, the Department of Revenue may issue a tax warrant, and add 10% to the unpaid tax as a collection fee. That warrant may be filed with the circuit court clerk in the county where property is owned, 20 days after the demand is mailed to the taxpayer.  It becomes an enforceable judgment at that point.

These “automatic judgments” can be entered without a trial before the circuit court.  This is a streamlined procedure that allows the state to garner a judgment fairly quickly. And these judgments are valid for 10 years from the date that judgment is filed  The judgment may be “renewed” for an additional 10 years, simply by filing an “alias” tax warrant at the end of the initial judgment’s 10 year effective period.

These tax judgments may be enforced by ordinary means, such as foreclosure and sale of real or personal property, with that sale by the sheriff or an auctioneer. Further, the sheriff keeps a part of the additional collection fee of 10%.  Thus, he has an incentive to conduct sales of property where warrants have been issued.

In addition, the state will often employ a collection agency to collect on unsatisfied tax warrants. In these cases, additional penalties may be assessed against the taxpayer, for the cost of private collection.  A restraining order may be issued by the courts of the county where the taxpayer does business, to restrain him from conducting business. In addition, the state may ask that a receiver be appointed, to manage the business so that those taxes can be paid over to the state.

The most significant power that the state has regarding a tax assessment is the mentioned automatic enforcement.  Note that this is without the normal legal protections of serving a complaint, waiting for a trial before the Circuit Court judge, and then obtaining a judgment.  The “normal” process for collecting on debt takes a number of months, and allows a full hearing of the facts before an impartial judge, before any lien or garnishment.  DOR can bypass that normal process.

The department may, without judicial proceedings, place a lien on monies of the taxpayer which are held by a financial institution, and require that the financial institution place a 60 day hold on funds. This includes not only funds the taxpayer has on deposit at that time, but also those that he subsequently deposits. In addition, DOR can garnish his wages by sending notice to his employer, without judicial proceedings as are normally required for garnishment. Further, the DOR can lien and sell property, or take it to a storage facility and require a bond before returning the goods.  The DOR can initiate a debtor’s exam, to inquire (under oath) about all assets that the debtor owns. Obviously, all of these requirements under the law are very powerful investigation tools for the DOR.  Of course, as the situation becomes rather grave, the use of seasoned counsel is recommended.

Retail Merchant Employees Can Be Responsible To Collect Taxes!

Not everyone in a retail business realizes it, but whatever goods are sold, taxes must be collected for the state by the business.  This applies to both sales and payroll taxes. Of course, some in the middle of a cash flow pinch will choose to ignore this responsibility, or pay the taxes “when they get around to it”. What happens in these cases?

Many don’t realize that the individual who runs the corporation, and those who cut the payroll checks for the corporation, can also be liable for payment of the taxes. The theory is that the taxes are held “in trust”, which means that the individual working for the corporation, and the corporation itself, are holding funds for the state.

It’s similar to how the bank holds funds for an individual in an ordinary checking account.  In this way of looking at it, the “bank account” which the business holds for the benefit of the state (which is the 7% sales tax and employee state income taxes withheld) cannot be drained of funds. It is the duty of the business, and the chief financial officer, to make sure that “bank account” is maintained for the state, and that those funds are paid over to the state. If those funds are not maintained, it’s considered embezzlement.

This theory can result in significant problems for the retail merchant.  Officers of the corporation who are considered responsible for its money affairs, are often unaware that they can be held personally liable. Of course, if the corporation goes broke, the liability does not go away; responsible officers can and will be pursued by the state for the trust fund tax liabilities, including both sales tax and state payroll tax withholdings.  Even if those officers move on to other employment, they can find that they owe significant liabilities due to their activities as past corporate officers.

All of these unpleasant possibilities can be avoided, if the taxes are paid on time. Nevertheless, where this is not possible, it is appropriate to consider the effects of delinquent tax payment, and how the corporation’s business or the assets of the responsible officers may be affected.

It should be noted that one of the more harsh but frequently neglected provisions of the Indiana code regarding taxes concerns the priority of payment, or how payments are credited against monies owed. When a taxpayer is behind, the partial payment is first applied towards penalties, then to interest, and last to the tax liability. This means that partial payments do not have a strong effect to reduce the original tax liability, until penalties and interest are paid in full.

In addition, the corporation which is struggling but which has not yet gone out of business may find that its registered retail merchant certificate (RRMC) will be revoked. In this case, the Department of Revenue will place signs on the taxpayer’s place of business, informing customers that the corporation can no longer conduct retail sales at that location. If those signs are removed or retail sales are continued, there is a risk of additional fines (or even imprisonment) as these offenses are considered a class a misdemeanor according to Indiana Code 6–2.5–4.

Of course, as long as monthly tax reports are submitted, along with appropriate payments, there will be no problems. But if those reports are not submitted on a timely basis, the state will investigate, and issue a demand notice for payment.  My next blog post will explain the problems that can arise in such a situation.

All About Short Sales: Why They Can Be Beneficial to Both Lenders and Borrowers

The most frequent way used to work out a settlement between lenders and borrowers in real estate is the short sale. In this type of transaction, the borrower wants to sell the property, and satisfy the majority of debt to the lender. However, since his mortgage amount exceeds the amount that can be realized from the sale of the property, it is referred to as a “short” sale.

When property is in foreclosure and a loan modification isn’t on the horizon, a short sale may be the most efficient way to solve the problem. Often, federal regulations give the borrower a release of liability on the remainder of the debt, once the short sale is approved by the lender and a closing occurs. Of course, the lender has to accept less than the full amount of the debt; in this sense, the sale is “short” to him.

Here’s an example. Suppose you own a property worth $100,000 and the debt on the property is $120,000. In this case, if the property sells for $100,000 and selling expenses are 10%, only $90,000 will be realized to pay off the lender, who is owed $120,000. Of course, the practical lender will weigh his alternatives: is receiving $90,000 better than receiving nothing in the short-term and going into foreclosure? Clearly sometimes the best choice is to accept the short sale.

Just as is true with a deed in lieu of foreclosure, these transactions can be complicated by second mortgages, judgment liens, homeowner’s association liens, and other impediments to conveying a clear title. In addition, beyond the problems with liens, there may be repairs needed to the home, which means the property sells for even less. Still, in all of these cases, the lender will benefit from a short sale, as a “bird in the hand” is better than waiting for a very uncertain price at  a foreclosure sale down the road.

When clients want a mortgage modification, they are faced with an uncertain future: if the lender does not approve the modification, they may not be able to hold onto the property. It these cases, sometimes a short sale can be very useful. The property is sold, and the lender is paid something.  The debtor often gets a release on the debt.  In this way he can avoid having to file bankruptcy, with the ensuing credit report damage.

Short sales are becoming more and more popular in the current economy, as mortgage modifications do not always work to get relief for the borrower. In these cases, a short sale can be a great advantage to resolve the situation. Obviously, in working with an attorney for mortgage modification, you want to make sure that he is familiar with short sales, and works with them on a regular basis. I personally have found them to be a highly effective tool, giving more options to the overburdened borrower.

What is a “Deed in Lieu of Foreclosure”?

In the real estate world, when foreclosure is imminent, many real estate owners will consider the “deed in lieu of foreclosure”. Because of the complexity that often surrounds real estate transactions, let me explain exactly what a “deed in lieu of foreclosure” is.

Before the 1980s, a deed in lieu of foreclosure was often used to resolve a situation where the owner of real estate could not pay for the real estate. Because real estate loans were always made for only 4/5 of the value of the real estate, and prices were stable, a lender never lost money when accepting a deed back in place of a foreclosure.

But over the last 30 years, real estate transactions have involved far less money put down by fewer purchasers, and  lenders are often faced with taking back properties where they will have a loss. In these cases, when a lender has a property worth not much more than the loan amount, it’s easy for him to lose money.

Here’s an example. Suppose the borrower buys a property for $100,000 and puts $10,000 down. In this case, he has a “loan to value ratio” of 90%, and the amount of value in the property is 10%. This 10% is known as his “equity” in the property. In a case where he can no longer make payments, the property has not escalated in value, and there has been very little paid down on the loan, the lender who has to take the property back is in a difficult position.

While the foreclosure occurs, the lender will have carrying costs for at least six months (perhaps as long as a year), and will lose money. Further, if the property needs to be fixed up before it can be sold, the lender loses money again. In addition, the cost of a realtor and other miscellaneous closing costs can create another loss.

Obviously, lenders like to make real estate loans where 1) a substantial equity exists in the property, 2) the property does not lose value due to use or market conditions, and 3) the borrower will not impede the lender in moving forward to repossess the property. In a perfect world, this can be done. In the real world, unfortunately, it doesn’t happen all that often.

For these and other reasons (including federal regulations), lenders do not take back deeds in lieu of foreclosure very often nowadays. Problems such as judgment liens, second mortgages, homeowner’s association liens, and other miscellaneous title issues complicate the matter further. In addition, federal regulations often demand that the lender foreclose before attempting to collect from the debtor, in order to get as much value as possible out of the property.

And so we come to the principal advantage of the deed in lieu of foreclosure.  If and when a lender is willing to accept one, in most cases there is a release on the debt.  This is the reason the borrower seeks to have the lender take back the property: so that he can be get rid of his debt. However, these kinds of transactions have not been very frequent in the last few decades, due to lack of equity in properties being foreclosed.

If you can get a deed in lieu of foreclosure accepted when you wish to give the property back to the lender, it is often the quickest and most efficient way to resolve what can be substantial debt involved in owning real estate. If problems arise, a good lawyer can help sort them out.


Should Lawyers Be Polite with Opposing Counsel?

 Should Lawyers be Polite with Opposing Counsel and Parties?

Of course, the answer to this question is obvious. We should all be polite with all the folks we meet, in every circumstance. Nevertheless, human nature being what it is, we sometimes have lapses in our sense of decorum.

As a lawyer it is highly advantageous to have an appropriate sense of civility. Not only does it benefit the lawyer by polishing his professional reputation, and by easing the transaction, it’s also of great benefit to the lawyer’s client.

When everyone is more relaxed in their approach it eases the exchange of opinions and points of view. As officers of the law, attorneys should strive to be solution generators. Unfortunately, we’ve all heard the jokes involving attorneys creating problems instead of helping to solve them. Lawyers should avoid making the process more tedious, expensive, and emotional, if at all possible. Simple courtesy goes a long way in making this happen.

I recently had an exchange with an opposing party who was not represented by counsel. When we went before the judge in the trial he was somewhat disorganized in his presentation. Nevertheless, I encouraged him to take his time and present all the facts as best he understood them.  I could tell the judge appreciated this relaxed approach, and the opposing party felt that he had “been heard”. We both left the hearing with no bitter feelings.

Within a few days, a written decision came from the judge, and it was partially in favor of each party. Since there were details to be worked out beyond what the judge had decided, I called the opposing party. There was no return phone call after my first voicemail. Calling him a second time, I fully intended to leave a voicemail that I would be filing a motion to compel enforcement of the judge’s order, should I not get a return call.

As an attorney with decades of experience, I know how costly it is to force “agreement”, when a more pleasant demeanor could, perhaps, create a less expensive solution more pleasing to all parties. I had no desire to type up and file motions with the court, drive out to the courthouse, have a hearing, irritate the judge with our lack of cooperation, and create hostility and antipathy with the opposing party. Nevertheless, if my second phone call was not returned, I felt I had no choice.

Much to my delight, my adversary answered the phone when I placed that second call. We both agreed that the hearing had been without contention, and he indicated to me that I had been “a perfect gentleman” in allowing his side of the story to be heard, and helping him with the presentation of his exhibits before the court.

Since there were certain details that remained to be worked out, and he had to do some fact-finding before we could do so, I encouraged him to take 7-10 days, as he requested, after which we would talk again. As the judge has already ordered the sale of the asset (our main goal), and the adversary simply wanted to have it independently appraised, there was no harm in honoring his request.  He was most pleased, and we agreed that we will talk again within 10 days.

Since this matter is one that has dragged on for a number of years for my client, it was a pleasant surprise to me that we seem headed toward resolution, only a few short months after she retained my services. I’m looking forward to letting my client know we may be able to keep her bill down, achieving a more efficient result through gentlemanly conduct.

Certainly not every lawyer thinks this way.  I fully understand the various twists and turns of legal thinking and conduct.  However, the legal system should be a way to resolve disputes, not aggravate them. It’s a way to teach people respect for the law and each other, and teach good manners as a way of efficiently advancing  polite society.

Of course, this doesn’t always happen–sometimes matters can become contentious between two opposing parties. But it’s always a pleasant surprise when people can work out their differences in a mutually satisfactory (and pleasant) way.


When is Chapter 7 Bankruptcy the Best Option?

When  is Chapter 7 Bankruptcy the Best Option?

When the borrower doesn’t have assets that a trustee can liquidate, a Chapter 7 bankruptcy can be quite useful.

Of course, there’s no doubt that a Chapter 7 bankruptcy is a less expensive way to resolve large amounts of debt, and this is its primary advantage over Chapter 13 bankruptcy or debt settlement. However, Chapter 7 bankruptcy is not always an available option. For instance, if a debtor’s income exceeds federal government guidelines then they will not qualify for a Chapter 7.

Most of us know that too much income or equity in a home makes it difficult to file Chapter 7 bankruptcy. However, there are other qualifiers that are significant, although their importance is not usually readily apparent. Monies in a trust, the ability to liquidate life insurance policies, a personal injury lawsuit, the expectation that the inheritance will soon be paid, and other situations can create problems in a Chapter 7 bankruptcy.  This can be quite a disappointment to the filing individual, who had believed or been told that nothing would be taken from him in the Chapter 7 proceeding.

Since most creditors are apprehensive about bankruptcy, often the mention of the “B word” allows for a productive settlement discussion, so that everyone can get “half a loaf” rather than going away empty-handed. As an attorney with 35 years of experience, I think bankruptcy is, as a last resort, an excellent settlement tool. Most creditors understand that it is much more productive to dialogue towards a mutual solution (i.e., debt settlement), rather than force the borrower into bankruptcy.

I find bankruptcy to be a highly effective backstop, which encourages creditors and borrowers to come to the table and work out a mutually satisfactory solution.  Most of us just don’t want bankruptcy, whether we are borrowers or lenders.

Since both the creditor and the debtor have something to lose, they are mindful that perhaps it is best to compromise. Unfortunately, in many situations where lawyers are involved, the costs of a settlement are needlessly driven to exorbitant heights, with the lawyers charging far more in legal fees than is necessary without considering the practical alternatives. In our office we attempt to steer away from solutions that are not cost-effective.

My primary goal is to reduce agitation between parties, limit cost, and be able to move on to more productive matters more quickly.  Given the bad public reputation of the legal profession, I want to give my clients practical solutions, without too much aggravation.  Quite frankly, it is my opinion that it should be the goal of the law to come up with effective solutions that allow all parties involved to move on. Since law is primarily a settlement device, and not “trial by combat”, we want to make sure everyone receives a fair share of a solution’s benefits. Using this approach, I have time and time again learned that the opposing counsel and his client can be used as allies, in assisting me to keep my client’s fees down.

Chapter 7 bankruptcy is an essential tool to help resolve debt issues and restore a client’s peace of mind. For that reason, I’m glad we have a solution in the law that allows people to eliminate debt, and move on to matters that are more productive.

Chapter 13 vs Debt Settlement: Which is More Cost-Effective?

 Chapter 13 versus Debt Settlement: Which is More


Often  clients are forced with a choice between Chapter 13 bankruptcy or debt settlement, because they cannot qualify for a Chapter 7 bankruptcy. This can happen for several reasons: possession of assets which prohibit them from filing a Chapter 7, or income that is too high to qualify for a Chapter 7 bankruptcy.

Of course, if you have cash assets, creditors prefer debt settlement, as “cash is king”.  Often this method is best in the eyes of both creditors and debtors.

In counseling clients about this dilemma, I like to break it down to one simple question: which is more expensive?  In answering this question we can come up with a simplified understanding of comparative benefit, and decide which approach should be taken.

To begin, it’s useful to understand that debt is always settled as a percentage of a face amount. Whether you owe $5,000 or $15,000, to the creditor it’s all the same: “What percentage can I collect?”  Creditors generally have a huge number of accounts, and their main goal is to see how much of the money owed they will be able to recover.

Generally, a 40% to 60% settlement is quite a good deal for the debtor. A settlement at 80% to 90% of the original debt is often more than the borrower feels he can afford. Obviously a 80% to 90% settlement is optimal for the creditor, preferably paid immediately.

For ease of the discussion, I’ll discuss this in terms of percentages, not dollars. In other words, when we talk about debt settlement versus Chapter 13 bankruptcy the primary question I wish to address for my client is: “what percentage of the debt must be repaid?”

In a Chapter 13 bankruptcy, where the borrower has an annual household income of $80,000-$90,000, it is most likely that he will have to pay back 100% of the debt. Because there are trustee fees and legal fees attached to the proceeding, it is not uncommon that he would pay 115% of the debt. The advantage to filing a Chapter 13 is that you’re given a period of five years to pay off your debts, under a payment plan.

On the other hand, debt settlement may confer a clear advantage, especially if it can be accomplished at 2/3 of the debt (including attorney fees). However, in debt settlement taxes must be considered. Assuming the borrower owes another 13% of the debt in taxes (which will have to be paid within the next year) this means the debt settlement would be the least expensive option. Specifically, that debt settlement would cost the borrower 80% of the original amount owed, after consideration of taxes in calculating the total cost.

In comparing Chapter 13, (which has a total cost of 115%), versus the total cost of debt settlement at 80%, it is clear there is a difference. Specifically, that difference is 35%. In other words, the consumer can often save more than a third of the debt amount, simply by doing debt settlement instead of Chapter 13 bankruptcy.

So looking at the cost-benefit analysis makes it very clear that debt settlement can often be less expensive for the borrower. However, debt settlement is not a good alternative  when the borrower doesn’t have the cash to settle in full at the time the deal is struck. For that reason, Chapter 13 bankruptcy can be an excellent way to arrange over many months the settlement of debt, allowing five years of payments to liquidate the entire debt interest-free, and without the danger of collection lawsuits.

Which one is right for you?  The best advice I can give to you: give us a call at (317) 266-8888. We are happy to answer your questions, and give you sound advice on what can become a very complex matter if not analyzed thoroughly.

What the Experts Say: Why Small Businesses Fail

Recently, the SBA published a report entitled “Financial Difficulties of Small Businesses and Reasons for Failure”. It is instructive to review these causes, in examining your own business. (Keep in mind that there can be more than one reason for a business to fail–the statistics indicate what percentage of the small businesses attributed a certain factor as contributing to their failure).

  • 39% of small business failures are due to outside business conditions, such as new competition rent increases insurance or other costs
  • 28% of small business failures are due to financing, whether it is high debt service, loss of financing, or inability to get financing
  • 27% of small business failures are due to inside business conditions, such as mismanagement, decline in production, a bad location, or loss of major clients
  • 20% of small business failures are due to tax problems, with either state or federal authorities
  • 19% of small business failures are due to disputes with a particular creditor
  • 17% of small business failures are due to personal divorce, or health problems
  • 10% of small business failures are due to calamities, such as loss of goods or equipment in a natural storm.
  • 6% of small business failures are due to some “other” cause

A quick glance at these percentages shows that the significant majority of business problems are issues which the entrepreneur can control. Although he cannot control health problems or divorce, weather conditions or outside business conditions, he has some significant control over financing, inside business conditions, tax issues, and disputes with other creditors. Often times the entrepreneur is not “focused on the obvious” as he deals with other problems which come up daily. Nevertheless, we all must make sure financing is in order, and that the business is run in a businesslike way, so that the taxes are paid, for example, or those debts negotiated. Small businessmen must also stay in communication with creditors to avoid lawsuits, liens, attachments, garnishments, etc.

In order to prevent these obvious problems from occurring, small businessmen should pay particular attention to business formation issues, especially when business partners are involved. The structure and organization of the business should emphasize efficiency, profitability, and good tax treatment. In addition, a solid business plan never hurts. When a solid business plan falls apart and the projections are wrong, at least we can tell which assumptions need to be corrected.

In addition, communications with employees, vendors, suppliers, and customers is critical. Good contract drafting and solid negotiation skills help in formulating stable processes for all of these individuals upon whom we rely.

Of course when significant problems such as disputes with the IRS arise, they must be dealt with quickly and honestly. Resolving these disputes in a cost-effective manner is a central concern, as every business (particularly when cash flow is bad) attempts to conserve cash.

Do you have questions or concerns regarding any of these issues? Please do not hesitate to call me at (317) 266-8888 for further discussion of these matters.

Debt Settlement Success Stories

Debt settlement can have fairly broad applications, as the examples below indicate. Whether in a divorce proceeding, a business workout, or an individual consumer’s return to solvency, debt settlement can be a very useful tool.

Recently an entrepreneur came to see us–the franchise he had purchased wasn’t making enough money to stay afloat. We negotiated with the franchisor, so that the franchise could be relinquished. In addition we negotiated with the landlord to make sure any claims he had were settled. The most difficult matter was the SBA loan: $220,000.

Fortunately, we were able to negotiate the SBA loan down, working with the bank and obtaining Small Business Administration consent, so that 11% of the debt was tendered in cash, after which the loan was considered paid in full. The entrepreneur is now back running a successful CPA practice, and much happier than he was trapped in a dying franchise operation.

In another case, an entrepreneur came to see us regarding his small business–again, his cash flow had dried up and he was going to be forced to shut down. After doing some cash flow analysis with us, he realized that although he was running three separate businesses, only one was profitable. He arranged to sell off the other two lines of business, and continue operations with the third. However, he had substantial lines of credit which were appropriate for debt settlement. These debt settlements were done on his behalf at approximately 40%.

When he first came to see us, this gentleman was in his mid 70s. He is now in a position to retire, as he preserved some retirement savings. He’s no longer burdened with unprofitable lines of business. As an added benefit, because his outstanding debt was significantly reduced, his credit score actually increased!

If you have these kinds of practical concerns please do not hesitate to call our office so that we can counsel you on the “ins and outs” of debt settlement. If you’re worried about these issues, call our offices now at (317) 266-8888.

Ownership Disputes

Ownership Disputes

It seems like a great idea to go into business with old friends or family–so much warmth and love spread all around. Unfortunately it doesn’t always seem like a great idea years later. This can be true whether or not a business is profitable, as the following cases will illustrate.

In one case that I handled, the shareholders were family, trapped in a situation lawyers are quite familiar with, called a “deadlock”. In a deadlock situation, none of the shareholders win, because no one has a majority of the shares. Of course, contractual provisions such as voting trust, proxies, dividing up the directors, or electing particular individuals as officers with specific powers, can all be used to move around a deadlock. But most people never consider these things. They move into a business, happy to be making a profit, without anticipating that loved ones or trusted friends can embezzle funds, take vacations on corporate time, or make poor business decisions for which all partners are liable.

Obviously, all partnerships and corporations, including LLCs, should have a detailed agreement to protect all parties concerned. In the case where this has not occurred, many people can be hurt and embittered. In addition, partners and shareholders can be driven into bankruptcy, with subsequent stress such as poor health and broken relationships.

In another case that I handled, the chief officers of the corporation embezzled funds to which they had no legitimate right. Of course, those who are dishonest will rarely admit that fact. These types of cases usually go before the court, with great expense for all concerned. In the event that a financial audit is done, often the dishonest party can be proved to be liable. Nevertheless, with significant bank loans against the business and the individuals, it can be a long painful struggle getting out of this financial quagmire.

For this reason, setting up, continuing, or dissolving business relationships should be done with counsel from attorneys with decades of experience in these matters. Otherwise things can get much too expensive and discouraging for all parties involved.

Does this sound familiar? If so, please do not hesitate to call and ask a few questions. I should be able, within a short phone consultation, to assess if I can be of service to you. Please call (317) 266-8888, and ask the receptionist to speak to Mike Norris personally. Or, you can email me at Looking forward to hearing from you soon.

Bank Workouts

While negotiating debt workouts with banks in the last few months, I’ve noticed a number of clients coming into my office with a significant financial problem: the bank has a lien on all of their assets, and they don’t have the cash flow to ensure that everyone gets paid, including the landlord, the bank, and other general creditors.

In these situations an old saying by Donald Trump seems appropriate: “When you owe the bank 1 million bucks and can’t pay it, you have a problem. When you own the bank 10 million bucks and you can’t pay it, the bank has a problem.” In other words, when cash flow is tight, the entrepreneur needs everyone involved to work with him.

Of course, if everyone can work together, the hard-working entrepreneur can pull his way out of a slump. However, sometimes in such a situation despair can set in, and the entrepreneur becomes filled with apathy, losing his drive. The obvious solution is to give the debtor a little breathing room, so that he can get back to focusing on what’s most important to resolving their financial issues: cash flow.

In a number of recent situations, my first approach was to sit with the bank, once learning they had collateral and all the assets of the business. This may seem like a precarious or risky position, but actually it is to the small businessman’s benefit. When the bank has the first claim on all the assets, there is nothing to fear from general creditors, who have no claim on assets due to the fact the debt is unsecured. As you can see, keeping the bank happy is critical.

But just because the bank is happy doesn’t mean the debtor’s problems are over. The debtor must continue to work hard, and work steadily. Creditors need to be alerted to the fact that bankruptcy is possible, if workout discussions are not productive for all parties. The debtor’s attorney will need to handle all lawsuits, and everyone involved needs to be given enough information to understand exactly what’s going on.

Are you worried about these kinds of issues? Call me on my small-business hotline, to discuss these matters, or schedule a consultation in the office by calling (317) 266-8888. We will try our best to get to the bottom of your issues, and help you to solve them quickly with minimal aggravation.

Top 10 Things Every Successful Business Owner Should Know

1) Every Business Must Make a Profit
This is the number one principle you must keep in mind as a small business owner. How can you maximize your profits? Which product or service makes a profit? Does it carry the other product lines?

2) Keep in Mind — Every Business Falls on Hard Times
No business is perfect, and every business will have its ups and downs. Just remember to keep in mind the fact that it’s not always the fault of the economy that your business is not doing well. It may be that the business man (you) may need to change his thinking.

3) Advertising Only Goes So Far
You can’t rely solely on advertising to bring a profit to your business. Examine your strategy: what product are you marketing? To whom, and at what price? What advantages can you offer, that set you apart for your customer?

4) Time and Money Are Limited
Both time and money are precious resources. Look at your sales vs. your production. Where can you best spend your time? In what areas is the money and investment really paying off?

5) Learn to Work Efficiently With Your Partners
Your customers, managers, employees, suppliers, consultants–these are all connected to the growth and profitability of your business. Learn to maximize your overall productivity by working efficiently with everyone involved in your business.

6) Listen to the Engine
As a small business owner, you have the power to “listen to the engine”. Cash = gas to power your “engine”, which means that in order for your business to run smoothly, you need a steady cash flow.

7) Who Makes What Decisions?
Examine your personnel. Who is the most effective, with what kinds of decisions? Employ the help of others–they can often provide valuable insight.

8) What Do Your Customers Want?
Will customers pay for the service you are offering? How is your product useful to your customers, and what benefit s will they derive from it?

9) Lead From the Front
You are often the only one who can make the “big” decisions for your small business. You must control all the processes and personnel of your business. For a business to function as a well-oiled machine, all the parts must work seamlessly together.

10) In the End, You Need to Ask Yourself–What Do I Want?
Every small business owner wants the same basic thing: steady cash flow. Money = freedom. What steps will you take this week to accomplish your goals? This month? What can you do today to help improve your business?

Why Aren’t More Mortgage Modifications Done?

Lenders continue to stall, and refuse to cooperate in modifying mortgages, even where legally obligated to do so under federal law.  Law in the state of Indiana continues to allow foreclosure without meaningful discussion of other options.  The state run website, telling consumers “you can get help for free” is merely a forms gathering service for lenders, sending forms back and forth from consumer to lender.  Once the lender has the forms, all too often he tells the consumer he is not qualified for any help.  Thus there is no assistance, from any source, at any time, to tell the consumer what his rights are and how to get what he is entitled to receive in mortgage modification.

The Indiana statute was passed, effective July 1, 2009.  It provides for a “settlement conference” should the consumer elect to bargain with the lender instead of passively allowing foreclosure. The theory of the statute, on its face, is to give the homeowner a chance to ask and be educated on alternatives to foreclosure.

In practice, certain critical flaws have become apparent:  1) the government website is of no help to consumers in transmitting forms; 2) courts are not supervising settlement conferences and what actually takes place at those conferences; 3) lenders are refusing to obey the federal law on mortgage modifications and often do not attend settlement conferences or offer any alternatives to foreclosure.  These problems can be tracked back to the major flaw in the 2009 Indiana legislation:  it is permissive, not mandatory.  The statute says the lender may offer alternatives, but it does not say that he must offer alternatives to foreclosure.  The statute was created with the appearance of helping the consumer, but it was created “without teeth”.

Many of us don’t know it, but the federal government is by far the “biggest player” in the mortgage market, on a national basis.  Very few mortgages are made or paid today on a local basis, that is, the money doesn’t come from or go to Terre Haute or Kokomo, Indiana.  We have a variety of players now, in place of what used to the just one lender holding the loan he wrote; we now have lender correspondents, wholesalers, mortgage brokers, securitizers, investors, servicers, insurors, and packagers, all with a stake in the document, information, and payment stream of the American home mortgage.

It is not untrue to say that we have created even a global market in US home mortgages; but who is in charge?  The federal government owns, buys, sells, and insures the vast majority of US residential mortgages.  As such, the power of the federal government to affect foreclosure over time is immense.

But federal regulation is tricky; one rule conflicts with another, complex procedures and paperwork rule.  How to wade through the swamp of authorities and paper?

Fortunately in the mortgage market, two federal buyers and traders of mortgages are preeminent: the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac).  Since they process a majority of American home loans, the government picked these two entities to be “point men” in the initiative to stop foreclosure, lowering mortgage payments if necessary to keep homeowners in their homes. Since “Fannie and Freddie” have become involved, loan modifications are happening on their loans, even though the pace is slow.

Mortgage Modifications Are Good For Everyone

A few years ago, I decided to put my thoughts in writing regarding “the mortgage mess”.  It seemed to me then, as it does now, that the solution was simple: make mortgage payments affordable so that fewer homes are foreclosed.  So I started to write an article which was on point, showing how a matrix/chart/interest table could explain in financial terms what was required.  That article I have included here, and I suggest you read it for background on the issue of mortgage modification.  See The Mortgage Crisis

The question I pose in that article is quite simple:  why are we forcing foreclosure to be the “one size fits all” solution, when both parties essentially want the same thing? Homeowners want to stay in their home, and lenders want to keep being paid?  What are the creative ways we can use to slow down the foreclosure crisis?  Is there a way to stop the loss of neighborhoods, investments and homes?

Why should lenders go to the trouble of modifying mortgages?  What’s in it for them? Why bother?  The answer is quite simple: lenders modify mortgages to make money, and to avoid losses that are certain in foreclosure.  Yes, that’s right…to make money.  Studies by lenders, the American Bankers Association, and mortgage servicers show that foreclosure is no way to a quick profit. It is actually a dead loss, with the lender losing 50% or more of the loan value, as a result of deteriorating real estate, legal and realtor fees, and loss of mortgage payments.  All commentators agree: foreclosing on homes will not make a profit.

Many lenders blame the current mortgage crisis on foolish consumers borrowing too much money.  They are quick to forget the lender’s role, and the huge sums made in the structuring of loans for 125% of equity, thousands of dollars in hidden charges, floating rates of interest, misrepresented payment structures, false appraisals, prepayment penalties, and making loans beyond the ability of the consumer to pay with no proof of income.  Much lending activity has been subject to investigations by state and federal authorities and condemned as less than honest.  Truly, the mortgage community has talked consumers into many a foolish loan for excessive short term profit on their end.  As a primal cause of the current mortgage crisis, the lending community can see that their mistakes have created a bad result.  Of course, the consumer is also to blame, but which came first, the chicken or the egg?

Lenders and bankers can be a cynical lot, with little willingness to take blame for their own mistakes, and little trust that the homeowner will pay.  Many are like adolescent “sore losers”, disheartened and threatening to “take my ball and go home”.  The assumption was that they should have been able to profit handsomely from bad loans to more consumers, with no downside risk.  But it didn’t work out that way, and now bad loans must be adjusted to more reasonable terms in the present circumstances.  The times have changed, and they call for a change in approach.

Both parties are to blame, and both must “give a little to get a little”.  Even while acknowledging that some real estate deals will never work out, lenders and borrowers all profit when a homeowner pays consistently and foreclosure is avoided.

Of course, workouts don’t work in every situation.  Some homeowners just can’t stay caught up with mortgage payments.  But when loans are adjusted to levels where they can and do perform, everybody wins.  Adjusting mortgages is good for the lender, the investor, the servicer, the homeowner, neighbors, businesses nearby, and the town where the neighborhood is situated.  When homeowners do not pay mortgage payments steadily, everyone loses.  And most importantly, the economic picture becomes bleak: depression sets in. When that happens, it’s bad for the entire country.

The economy runs on consumption, and consumer spending is 70% of that consumption.  If the consumer is evicted from his home, he spends less, works less, and gets disoriented and detached from community and friends.  His job performance may suffer, as he works through his personal crisis.

Do we want to save the economy? Then save the consumer’s peace of mind, and his home.


The first step in budgeting is to create a spending plan. Using a spreadsheet program, such as Excel, is an excellent way to plan expenses and spending. It allows “what if” analysis; by simply changing the expense number, we can see immediately the impact on our finances.

Take a good hard look at your “discretionary” expenses. These are the only expenses which can be cut without strong lifestyle changes. The following expenses are easy to adjust: excess tax withholding, life insurance, 401(k) deductions which are not mandatory, clubs and recreational activities, cable TV expense, dining out, gambling, etc…

We must be careful to distinguish needs and wants. We all want many things, but need far less. Keep in mind that Money = Time, and Time = Money. The more you ‘want’, the more you will spend. The more you spend, the more time you must use to acquire, maintain, and pay for possessions.

Impulse buyers have more bills than they can pay, and have to spend more and more time working, just to stay afloat financially. They have little time for themselves or family. Health and relationships break down, just as possessions do if they are not maintained. The impulse buyer ends up tired and broke.

Don’t get distracted from your spending plan by retirement concerns or worries about health, rising expenses, changes in family situations, etc. A good plan is a good plan, no matter whatever else happens.

Realize that a spending plan is ultimately what you want, and what would be best for you and your finances. As we live in an imperfect world, it may take a while to get reality to match your plan. The plan can also be adjusted, as it merely establishes a target rate for spending. When in doubt, estimate income low, and expenses high.

How can we budget for variable expenses such as utilities? Use an average from the last year, and don’t forget to establish an emergency fund with a spending plan that allows a little bit of savings each month.

If you want a free excel budget spreadsheet, please do not hesitate to contact us. Take the time to create a budget…you’ll end up worrying less.

Recently I have posted on my blog a series of 6 videos which address the mechanics of budgeting. Interested? Watch the following: Planning part 1. If you feel that it’s helpful to you, go on to the next: Planning part 2. After, go on to part 3, part 4, part 5, and part 6.

Credit Reports (Part 2)

This is my second post on credit reporting, to explain how it works.  The attached clip explains “how it used to be”, in contrast to the numbers oriented style in vogue for the last 2 decades.  Often we wish:  “Why can’t it be just like it used to be”?  This series will explain how our modern system of credit reporting (and granting loans) started.

In understanding how our system evolved, we have a better understanding of why and how we got to the point where we stand today.




Download This Episode

Credit Reports (Part 1)

Years ago, it occurred to me that we all need to know something about credit, and how credit reports are made.  I put together a CD for clients explaining credit reports.  Now with advances in the web, I can get it to you without a CD! I hope this 12 part series is of use to you. Immediately thereafter, I will publish my 11 part series on credit report correction.

Here is the first audio clip.  Hope you can find the time to listen to the whole series.  There is a lot of good information in these old CDs from several years ago, still relevant today.

Download This Episode

Planning the use of money (Part 6)

By now, if you have reviewed the five videos in previous blog posts, you should have a fair idea of where your money is going, and where it needs to go. Now comes the hard part: actually making the necessary decisions.  Some expenses will definitely have to be modified.

Remember: every dollar saved is a dollar earned.  Indeed, the dollar saved is an “after tax” dollar, all of which you get to keep.  The dollar earned is a “before tax” dollar, and you will only get to keep 70 cents of it, at most.  So we can see that keeping expenses down definitely helps in money terms.

In personal terms, the stress that comes from unpaid bills is removed.  Family life is easier, and there is time for exercise and good diet.  Medical bills are less in the long term.  Although this is not true in every case, a simple budget can often help to organize and reduce stress in many other areas of life.

So make your life easier with a budget!  If you want the sample file I used to create these videos in MS Excel, just email me at
and I will be happy to send it with a reply.

I suggest you download the video file below, as viewing is easier due to a bigger screen size.  Or you can just click on the icon and the video will play immediately.  As always, please call if you have questions.


Download This Episode


Planning the use of money (Part 5)

This is the video that shows a full month of expenses for our sample consumer, who can now see how the month’s spending all adds up.  Is more income needed?  Can some expenses be cut?  Which expenses?  How much?

All of these questions are the ones a prudent consumer or small businessman must ask himself, in any case where he is late on paying bills.  There is an obvious reason he is late on paying bills:  he did not have the money!

When the money is just not there, go through a three step process.  First, track expenses.  Second, ask yourself: can I make more income?  If not, step three comes into play: expenses must be cut.

Hopefully, this series puts it in perspective for you.  As always, we are here to help, just call (317) 266-8888.

I suggest you download the video file below, as viewing is easier due to a bigger screen size.  Or you can just click on the icon and the video will play immediately.  As always, please call if you have questions.

Download This Episode


Planning the use of money (Part 4)

This is the fourth of six videos detailing how to keep track of the expenses, so you know when you are on “safe ground” with your spending.  In this video, we look at the daily and weekly expenses which occur, and which can be added up to get an overall picture of monthly income and expenses.  With this information, you can finally get an accurate picture of what is going on in your financial life.  With these tips, you can control the “ebb and flow” of your cash, as you gather enough information to predict with confidence.  When you find yourself able to predict that money will be left over at the end of the month, and that money is put into a modest savings account, you’re really getting the hang of it!

I suggest you download the video file below, as viewing is easier due to a bigger screen size.  Or you can just click on the icon and the video will play immediately.  As always, please call if you have questions.

Download This Episode


Planning the use of money (Part 3)

What does it take to live nowadays?  This question is hard to answer for today’s expenses, unless you know the answer already (and have been tracking your spending for the last six months).  So start the process now:  start saving cash and card receipts.  As you learn more and more on how to track income and expenses, you will have the records ready to plug into a worksheet.  And keep watching this series of videos as you learn how to track down dollars and cents.

I suggest you download the video file below, as viewing is easier due to a bigger screen size.  Or you can just click on the icon and the video will play immediately.  As always, please call if you have questions.

Download This Episode


Planning the use of money (Part 2)

So just how hard is it to be safe with money?  A plan will go a long way in creating security.  If you are wrong, you will know that “things did not go according to plan”.  If the plan is working, then you were right!  Remember, it’s just math.

What will the math tell you?  It answers the question:  “What are your habits?”  Once you know that answer, you can proceed to ask: “What do I want to be my money habits?”  Then a plan can be formed and carried out.  But first, observe what you are doing with your money every month.  Awareness of your habits is the most powerful tool you can use to change them.

I suggest you download the video file below, as viewing is easier due to a bigger screen size.  Or you can just click on the icon and the video will play immediately.  As always, please call if you have questions.


Planning the use of money (Part 1)

Does it make sense to plan the use of money?  All the experts say it does.  But how do we do it?  Simply put, tracking our spending allows us to predict how fast it our money will “go out the door”.  This short video is the first of 6, showing how to be aware of your use of money.  Remember: if you can track where your money has gone, you can predict where it will need to go in the future.  In addition, planning helps to distinguish between needs and wants, so you can sort the necessities from the luxuries.

I hope this video helps you to a prosperous future, free of financial worries!

I suggest you download the video file below, as viewing is easier due to a bigger screen size.  Or you can just click on the icon and the video will play immediately.  As always, please call if you have questions.


Will picking the right college help control your budget?

One of the greatest expenses for parents is college tuition for their young ones.  Of course, the older student also feels the pinch.

Of course, we all know that private colleges cost more, and for profit colleges suffer from two problems: high cost, and credits that do not transfer to obtain a college degree from an accredited university.  For these reasons, state funded colleges (such as IU or Purdue) offer a “bigger bang for your buck”, giving lower cost and coursework that is accepted at any other institution of higher education.

Likewise, Ivy Tech is an excellent value, as it offers accredited courses at even lower tuition rates.  But how about distance learning?  Can a Indiana resident attend a state school with accredited courses, lower tuition cost, and learn off campus via the internet?

Now there is an alternative.  Western Governors University Indiana, or WGU, offers transferable credits, full time tuition of $6,000 per year, and course work measured by papers and exams, with all instruction online.  What a great idea for the busy mom or dad who is trying to advance their career!  In addition, all courses transfer from Ivy Tech associate degree programs into relevant WGU programs.

If you are a beleaguered wage earner too busy to spend nights on campus, this may be a great opportunity for you.  The attached article explains further, and is recommended reading:  WGU Indiana .

Of course, if more expensive options in time and money are practical, they are advised.  Nevertheless, internet learning can be a great advantage for those determined to take it seriously.



Is budgeting really worth it?

Quite simply in the opinion of this writer and most financial experts, it is always worth it.  Ask any college kid with student loans:  do they create a burden in his/her life?  The “buy now, pay later” mindset ends up leaving us exhausted.

What is the solution?  People need to start saving, as has begun to trend in recent years in the U.S.  We need to watch what we spend, and “make do” without always desiring more.  As we have learned in the last few years, a new trophy home is not always necessary.  

Do you want more control over your life?  BUDGET!  A good article on this topic by the President of the Sagamore Institute is attached, and I wish to give credit to Jay Hein for the clarity of his thoughts.  See the attached:   Jay Hein on Budgeting

Just think about it.  Every dollar saved is one more you don’t have to work for.  Just remember what Ben Franklin said:  A penny saved is a penny earned!

Does it all add up?

Can inaccurate credit reports be corrected?

Yes, they can.  The Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act (FACTA), allows the consumer to question accuracy of reports, and furnish proofs to be considered in making corrections.  Several years ago, I taught a seminar just after a change in the law.  You can examine those seminar materials here:  Fair Credit Reporting and mortgage reporting, bky issues .  If you want to read the law yourself, you can access it here:  FCRA as amended by FACTA

In essence, those rules provide that you have the right to one free report each year, and you can apply for that report from each of the three credit reporting agencies (CRAs): Experian, Equifax, and TransUnion.  If you would like the form to use, you will find it here:  Annual Credit Report Request Form .  If you are turned down for a loan, you can get the credit report which was used to evaluate your credit, and it is also at no cost.

In order to dispute inaccurate (including incomplete) credit entries, you must contact the CRA with information showing the inaccuracy, and they have 30 days to investigate.  Hopefully, they will make the correction with no further effort on your part.

Review my attached writing to consider all the myriad ways a credit report can get inaccurate.  Frankly, it is amazing we have accurate reports.  A number of years ago, it was estimated that 40% of the reports have errors which will lead to denial of credit, and 80% of reports have errors in general.  With that in mind, looking at your report once a year is a good idea.

One common area of inaccuracy is the listing of debt discharged in  bankruptcy.  Often, the report is not updated after bankruptcy.  Even though debt is washed out in bankruptcy, the credit report is silent as to that issue, giving the impression that the debt is still owed!  Thus, it is always wise to review the credit report 6 months after a bankruptcy discharge.  If you continue to pay on debt after a bankruptcy, the creditor must continue to report your payments after bankruptcy, in order for the report to be accurate.

Why do credit counselors insist on bloated debt payments in consumer budgets?

So often, people come into my office to talk about debt, after talking to a “consumer credit counselor”.  The counselor has recommended a budget to them, lean on basics but heavy on consumer debt payments.  After a few months, the budget collapses under the strain of unrealistic expectations.  Why are these “counselors” so unrealistic about budgets?

This entire industry was studied in a Senate Report in 2005.  The title of that report is: “Profiteering in a non-profit industry: abusive practices in credit counseling”.  The U.S. Senate Homeland Security Committee was up in arms over “the marketing of debt management plans”, and the practices of the industry as a whole were examined.  See the Senate Report:   Credit Counseling, Senate report.

That report reviews that “credit counseling” was first started and funded by credit card companies in the mid-60s to stem losses from customers who did not pay.  The theory was that a “kinder, gentler” collector might increase yields for credit card lenders.  By encouraging the consumer to “tighten his belt” and use the lender’s “counseling service” to collect monies for credit card and debt payments, more money could be collected.

Of course, referrals to any third party source of information, such as attorneys, are actively discouraged, (which I’ve found in my experience).  The lender doesn’t want his collection agent to lose control over the consumer’s cash flow.

The arrangement is quite cozy.  The consumer is charged an extremely modest amount for the “credit counseling” service, say $15 per month.  Of course, the goal is not to raise funds from consumer fees.  The goal is to get as much of the consumer’s income as possible, for debt payments.  Modest changes in interest rate and payment are made with some lenders who use the collection service, other lenders refuse to alter any payment terms but will still pay the “counseling service” for collecting payments for them.  All the while, the consumer is told that this collection agent is “in his corner”.

And this is the key:  As long as the debtor doesn’t know that the credit counselor is actually a collector working on a percentage, then any payment plan seems to make sense.  But what the counselor rarely reveals, and the consumer who trusts his counselor doesn’t know:  the counselor is a collector working on commission, to be paid a percentage of what he collects.  Lenders who pay these collection fees understand that this is just another business expense, a cost of collection.  Why lower interest rates or payments? The more the counselor/collector collects, the bigger the payoff for all.

What are the percentage fees collected as a kickback?  See on page 33 of the report, footnote 164:  up to 30% of the monies collected is the kickback.  At this rate, everybody makes money…except the consumer.

It is no stretch of the imagination to believe that lenders have controlled the “credit counselors” they fund, and that they have done it for years.  See footnote 166:  “Some creditors also began issuing more detailed…standards, in effect becoming a regulator of credit counseling practices”.  Clearly, with the majority of credit counseling monies coming from lenders, this is an industry that has been “bought and paid for”.  Footnote 177 makes it clear that the credit counselor get the majority of his revenue from kickbacks, and is “obligated to comply with creditor standards”.

Wisely, the Senate Report insists in its’ last page on full disclosure of the “existence and nature of any financial relationship with a creditor of the consumer”.  Armed with information on kickbacks, any consumer would be well advised to steer clear of the conflicted consumer credit collector who portrays himself as a counselor.

Are collectors obliged to be polite?

From time to time, we get questions about the Fair Debt Collection Practices Act, and so I have posted it to this blog entry.  In essence, this federal law protects the consumer from harsh and abusive collection practices, allowing him/her to discuss debt issues without being threatened, harassed or humiliated.

This brief outline is hoped to be, for most consumers, a sufficient summary of the most relevant points.  Please bear in mind that I have not covered all of the law in its context; I am merely suggesting answers and statutory references for the questions I am most frequently asked in my practice.  For your reference, I have placed a highlighted copy of the statute here: Fair Debt Collection Practices Act

The first thing to remember is that only the debt collector is regulated.  The full time employee of a creditor does not have to pay attention to this set of restrictions.  See Section 803(6).

Collectors must call during normal hours, 8am to 9pm.  In addition, they may not call a consumer when they know he is represented by an attorney, or at the consumer’s place of business when such calls are prohibited.  See Section 805(a).

Further, all communication must cease if the consumer writes the collector, unless the communication is to notify the consumer of an impending lawsuit.  See Section 805(c).  These measures allow common sense structure to the phone contact with the consumer.  This is, in my opinion, good for everyone.

Certain obviously deceptive practices are forbidden, such as threats of violence, profanity, repeated calls to harass, and the failure to identify oneself.  See Section 806.

In addition, false and misleading representations are banned. Among those commonly  used statements are: exaggerating the amount or status of a debt, misrepresenting oneself as an attorney, threatening arrest, threatening a false credit report, or any other “deceptive means of collection”.  All of these misstatements are violations of the law.  See Section 807.

The collector cannot collect more than is owed, per Section 808.  The same section also puts some restrictions on postdated checks.  Read that section to become more acquainted with your rights.

Damages under the statute at Section 813 are realistically limited to $1,000 per occurrence plus attorney fees.  And the collector who can prove an innocent mistake will be absolved of fault, with no damages awarded to the consumer.  Nevertheless, this federal statute places significant limits on the abusive collector, who now must “mind his manners”.

Does this automatically curb all collection abuses?  Of course not.  But a polite reminder that you are aware of the statute will often lead to a more civil conversation.  A more polite conversation is often a more productive one.  Ultimately, this is often the best way to save time and money for all parties concerned.

Does Debt Settlement really work?

Lately, I have done a fair amount of lecturing to CPAs and others about debt settlement, illustrating the techniques used for handling debt with this bankruptcy alternative.  For a description of the relative advantages in comparison t0 Chapter 13 bankruptcy, I have composed a summary:Chapter 13 compared to Debt Settlement.

Of course, some will worry about tax issues in debt settlement, as well they should.  The good news is that an insolvent debtor can escape taxation on debt forgiveness, using the IRS insolvency rules.  Want to calculate if you qualify?  Use the Insolvency Worksheet.

If you are a professional who wants the best information, I would suggest IRS Pub 4681 , which details the rules in depth.  Also, the IRS website on this topic is useful:  Debt Forgiveness IRS websites .  In any event, those loaded up with consumer debt should consider debt settlement as a useful alternative to Chapter 13 bankruptcy, or other debt workout alternatives.

Lender attorneys don’t want to know about loan modifications

At my last foreclosure defense settlement conference, the lender’s attorney attended with me and my client.  His lender client is out of town, and the attorney didn’t even know who to call, although he had previously suggested to me a contact and phone number.  So no phone call was made, and nothing was done at the settlement conference.

I was given a new phone number to call, with a different lender representative than had been previously suggested. I offered to follow up, so the next time we met we could all be more organized.

The lender’s attorney became angry that I wanted to continue the conference, since his client did not attend.  He claimed that we had completed the settlement conference, and now he was entitled to continue the foreclosure.  The danger, as I suggested to him, was that nothing had been discussed; nothing had been put in writing.  My clients were in danger of losing their home if the foreclosure proceeded.  We needed written reassurances from the lender that they intended to follow federal law in modifying this mortgage, and we wanted that agreement reinforced by a court order in this foreclosure proceeding.

But the lender’s attorney was resolute:  he is filing a report with the court that the settlement conference has been held, and we have no further right to impede his goal of taking away my client’s home.  Unfortunately, under Indiana state law, he was right.

Now we must file objections, and process more paperwork asking for a hearing before the judge on the question: “Does the lender have the right to continue foreclosure, without meeting federal guidelines for mortgage modification?”

Well, someone has to solve this stupidity.  I will end up having to cut the deal with the lender, and the new contact I was just given.  I will also have to make sure the paperwork is right.  Unfortunately, the apathy of attorneys and lenders makes what should be a simple transaction an uphill climb filled with delays and “hiding the ball”.  Hopefully it will get easier over time.

Recent news on mortgage modifications

As of July 1, 2009, Indiana now allows homeowners to contest the foreclosure process.  They may ask for a “settlement conference” with a lender representative to work out foreclosure alternatives.  The diligent homeowner will make sure he asks for this conference, as soon as the foreclosure is filed.  At that hearing, the homeowner can present his gross monthly income for the household, asking the lender to consider 31 to 38% of this figure as an appropriate payment to keep the home.

Unfortunately, the state law does not require the lender to use gross monthly income for fixing the appropriate payment, even though he is encouraged to look at the documents which establish that income.  Sadly, the lender can refuse this common sense solution, and demand the homeowner surrender the home.  Of course, this is not good for anybody including the town with vacant homes and unpaid real estate taxes, and the neighbors who see their property values go down because of too many homes vacant and unmaintained.

Of course, for most homeowners the desired result at a settlement conference is a change in the mortgage payment, allowing the homeowner to keep his home.  The federal “Make Home Affordable” plan has been active since March of 2009, and is referred to in this post as “MHA”.  MHA specifies that regardless of Indiana law mentioned above, the homeowner can insist that household gross monthly income is the only criteria relevant to setting a new mortgage payment.  This right under MHA applies in 75% of the foreclosures filed in the country today.

But lenders are slow to admit that MHA applies in any particular foreclosure.  My experience has been that lenders must be forced to admit that MHA applies.  Even when they admit that it applies, they are not willing to admit that gross household income determines the mortgage payment, right down to the penny.  In short, it is simply an issue of power and control.  Lenders are not used to consumers and their lawyers knowing what their rights are.  Lenders are very reluctant to give in to consumer demands, even if the law requires them to do so.

What a happy surprise I had last week.  At a scheduled settlement conference, a large regional mortgage lender admitted that gross income would indicate that an adjustment in the loan terms was best for both lender and homeowner.  Indeed, the lender even offered to reamortize the loan to 30 years at 5%, without any demand for back payments.  They also offered to start at the new payment two months from now, with no payment until then!  I was shocked, especially since this loan was one of the 25% not covered by the MHA guidelines.  NOW THAT IS WHAT I CALL A SMART LENDER!  And all is well that ends well.

In other cases, lenders are still unwilling to admit they are covered by MHA, even though I know they are.  The foreclosure process drags on, with unfruitful settlement conferences and lender demands for judgment.  Just today, I talked to a lender lawyer who admits that MHA is becoming the standard, but his lender clients are taking their time in understanding what is required of them.  Let’s hope for the future: less time in foreclosure, less legal fees, more results outside of the courts.  The foreclosure mess needs to end immediately.  We need to move forward with financial recovery, as homeowners and as a country.

What is going on with Mortgage Modification?

You really want to know?  Well, you better allow a few months for the market to “catch on” to the concept….

In essence, the Obama administration has published a plan which should apply to 75% of the mortgages in the country. The “Make Home Affordable” initiative is designed to assist the homeowner who is delinquent in payments, and cannot afford 100% of his normal payment, based on current household income.

In theory, the monthly mortgage payment is adjusted downward for 5 years.  The hope is to save homeownership, a stable tax base, cash flow to the lender, and neighborhood values.  There are many obvious advantages for all.

But most lenders don’t understand the details.  In 5 recent foreclosures where I have represented the homeowner who is trying to keep his home, lenders didn’t know program specifics (nor did their attorneys).  Their approach was the basic “we win, you lose;  see you at the foreclosure sale”.

I have had to continue hearings while giving the lender personnel time to research what they are legally obliged to do:  offer loan payment modifications for a 5 year term, if the homeowner does not have the money to make the contractual payment.

Stay tuned for further developments………

A radio show…….why bother?

Most Saturday mornings, I start the day with a warm cup of coffee while I read the newspaper, or maybe several different newspapers, if I haven’t yet caught up with the news of the week.  After immersing myself in reading for a while, I take some time to peruse the articles that I’ve arranged on the kitchen table in front of me.

As the “theme of the week” becomes clearer, I’m typically lost in thought while I organize the main “themes” and my presentation.  And before you know it I’ve got the topic for my weekly radio show.

Once done, I critique it. Was it compelling?  Lucid?  Relevant?

Why bother?  Just for the thrill of thinking out solutions to everyday problems in a world where people need someone to trust.  In the practice of law, communication is everything.  Let us start with building trust, based on reliable and solid advice.

Time is Money, both are Freedom!

Time is Money, both are Freedom!

Money is derived from time spent focusing on a task.  We make more or less money for more or less time, but how one uses his time will, within certain limits, allow him to make money.  Likewise, how one uses his money will, within certain limits, allow more freedom in use of his time.

We want to focus not on making money, but the use of money once we have acquired it.  If both of these precious resources are conserved, this gives us more freedom.

In other words: Time determines how much freedom we have with money, and Money determines how much freedom we have with time!

So if we want more freedom and control in our lives, we must be careful in our use of our time, and our use of our money.  Since the burden of making money is one of the principal time constraints for most of us, when we have wisely accumulated and saved that resource, we are able to direct and channel our time into the issues which we consider more important than making money.

Because we use our time to make money, and often feel we are at a loss financially because the time has not been used productively, it is critical to make the connection between profitable use of one’s time, and conserving cash, so that one has more time for pursuits other than purely the making of money.

The prudent use of time and money allows one many benefits, such as

  • Maintenance of physical health
  • Improving family harmony
  • Involvement in community affairs
  • The ability to learn on new subjects, for personal benefit or profitable endeavors
  • Time to relate to others, with a more enlightened point of view
  • Time for relating to self, unburdened by money problems
  • Time to explore the use of solitude
  • Time to cultivate better personal habits
  • Time to exercise stronger self-discipline
  • Time to work on one’s marriage
  • Time to work on relationships with other people.

So I encourage you: use both time and money wisely!

Note: We are a debt relief agency.  We help people file for bankruptcy relief under the Bankruptcy Code.