Debt Relief Law Offices of Tampa Bay

Tampa Bankruptcy Attorney 727-849-3328

How To Handle Debt With Bankruptcy

Posted on Oct 29, 2014

Host: Good afternoon welcome. Debt relief program is something we do here once in a while. Ms. Ziona Kopalovich is here with us, hello young lady.

Ziona: Hello, it’s so good to be here. I made it, after I got lost.

Host: Well I was going to say you know, you wind up in Missouri down, you start Google maps I’m telling you. I think Google maps are designed really pretty much to drive us all insane. Absolutely crazy

Ziona: I just you know, put my faith in Google maps.

Host: Are you rethinking that?

Ziona: Almost didn’t make it here.

Host: Well you made it and that’s what’s important because the idea here today is to, you know, we talk with Kathy about people’s health, and their healthcare, and their insurance. And now were just trying to help them on the other side of that and just get people out of debt it is a nice service that you provide.

Ziona: It is, isn’t it nice? It is a wonderful service and it’s a very necessary service. Because if you didn’t get really really really ill when you get the help from Kathy and you made it through your medical issues, and your healthy, and doing well, and then you get those bills in the mail and that’s enough to give you cardiac arrest.

Host: Yeah that’ll put you back in the hospital if you’re not careful.

Ziona: Tremor’s, anxiety, depression.

Host: I would imagine I know that we, you know, touched on in the past but a majority of the people who find themselves you know filing. But if it gets to the point to say you know what we can’t do this we tried working with people’s bankruptcy. Medical has so much do with it.

Ziona: There is a significant percentage of the population that files bankruptcy because of medical bills. So we can talk about how the medical system is naturally adequate in terms of getting people well and debt-free okay but it is what it is and we have to deal with it because a lot of people get sick, get into accidents, some kind of the physical problem over which they have no control and which they did not choose for themselves it happens. And then you take care of it and then my God how are you going to pay that? A lot a lot of a lot of debt. That you have to clean up you have to clean up in order to join the rest of the population in our financial life. If you want to be able to borrow money to buy a car, borrow money for a house, insurance, you know car insurance. You have your credit has to be good and you credit is not good if you have a lot of debt and your if you have overwhelming debt, but if you also have a lot of debts that you are paying you are servicing the debt. That’s not good enough in order to be able to have good credit in order to join everybody else in our financial life.

So we have several vehicles to help people to get out of debt. That on the main ones that I deal with our chapter 7 and chapter 13 these are two different kind of bankruptcies that help people to get back to get back their financial lives. Get back their sanity. So chapter 7 commonly you know people say straight bankruptcy, they are talking about chapter 7. And that allows people to get out of credit card debts, medical debts, any kind of debt that you can no longer pay.  Provided that your income is below a certain threshold, you can file a chapter 7 and walk away from the debt and leave the different protections of the law has for you to keep your home, you keep your car, you keep your assets. Okay, so that’s huge that is really is huge.

Then the other kind of bankruptcy that we commonly deal with is called a chapter 13. And it’s used for purposes a chapter 7 can help us with. So for example if you’re behind on your mortgage payments and you need to catch up on your mortgage. Chapter 13 gives you somewhere between 3 to 5 years to catch up on your mortgage. Chapter 7 doesn’t have that mechanism so if you’re behind on your mortgage and you file a chapter 7 you either, it either means that you’re giving up the house and then you walking away from the debt right? To hold that the entire thing that efficiency and everything else. Or if you can work out some kind of an arrangement with a mortgage company you may be able to catch up on your mortgage outside of the bankruptcy. But chapter 7 itself doesn’t have the legal mechanism to allow you to catch up while you’re in bankruptcy and it’s six months only too, it lasts for about six months. So if you’re two years behind you are not going to catch up in six months. Chapter 13 gives you five years to catch up on the maybe two years that you’re behind.

Host: Say if you just yourself just for lack a better term normal situation where you’re falling behind a couple of months and you’re having problems with your car payment and your whatever.

Ziona: And your homeowners association.

Host: And that seven would be the way to go?

Ziona: No, but if you want to give it up in the seven. If you want to give it up seven is the way to go. Provided again that your income is also low and that you don’t have other assets that you’re afraid you can lose. So if your income is higher than average for the family size that you have. Then you may have to go into a chapter 13. If you had assets that you want to protect you then have to go into chapter 13 in order to protect those. So basically this calls for a plan, you propose to the court and plan of how you are going to get out of this mess. So what I can do you know like making full payments on credit cards and that are really not that important in the big scheme of things. I mean that if you look at do I pay the mortgage, do I make the car payment, or do I pay visa? Then the priorities are there, they are basically a question of priority.

Host: Got it, reorganization.

Zioina: Reorganization, right. So you pay what you need to pay. If you want have your house then pay your mortgage. If you’re behind you pay the arrears on the mortgage, you make your car payment, but the medical bills, the credit card bills are paid at the lower level at a reduced rate to fit your ability. Okay so we are talking about the ability to pay back, or they can be low enough or high enough to protect the other assets that you want to keep. So if you have a home and then you also have a rental home that you want to keep chapter 13 can deal with it in a very elegant way, it may be expensive but not as expensive as if you did not file a chapter 13. It just makes things possible, things that are beyond reach in our normal daily lives. Chapter 13 makes it easier, makes it possible.

Host: And it kind of gets the wolves off of your back and that’s a good feeling.

Ziona: And we get the wolves off of your back as soon as you retain us, before we even file for bankruptcy. One of the services that I give to my clients is that I will talk to their creditors. So clients ask me, “what do I do when they call me? Because I am so terrified, what do I do?” Well they call you give them my number, and tell them here I don’t talk to you talk to my attorney. And we will talk to them and they back off yeah. They realize that you’re serious about solving situation that they’re not gonna get paid what they would like it paid. They’re going to stand in line and get paid according to their priorities in the law.

Host: Fabulous, and there is that stigmatism, not stigmatism. Stigma. Is that going away? Because it seems to me I remember as a kid when my parents considered it. They were like they couldn’t, they avoided it which they should not have done. They avoided it and try to work around because they were so worried about the stigma of oh my God you did that.

Ziona: Right, I mean I keep repeating that same thing you know that our mom didn’t raise us telling us, “honey, when you grow up you will file bankruptcy.” Most mothers don’t say that? Right so we are raised to keep our word and paying debts is part of keeping our word. Keeping our promises. I mean this is ideal this is what everyone would like to do, but unfortunately that’s not what life has in store for everyone.

Host: No, no, no sadly that’s true.

Ziona: So is there a stigma? Yes, but you can’t live your life according to what other people think about you always. It would be nice, it would be lovely but you have that there is a point that you have to rescue yourself. And if you don’t rescue yourself nobody else will. And if you already dug a hole for yourself, digging in deeper is not going to get you out of the other side. Not going to happen.

Host: No, it is not a case of if you’re going through hell keep on going. It’s bail out, get out, cut it and go. We try to convince ourselves that a lot of people do with their own debt, that they can they can handle it. And there are so many people that address their debt by taking on more debt.

Ziona: It’s true, and then you know two or three years down the road that’s when they come to see me. Because they have tried and they just can’t do it, things are worse. And the other thing is it on the way to my office knowing in a year to two years, the lost assets that you could have saved. Like your IRAs, your 401(k), the equity that you have in your home. You know some people typically will deplete IRAs or 401(k)s in order to pay credit card debt or medical bills. They will take on a second mortgage and a third mortgage in order to pay credit card bills. Please please if you get anything out of this program please do not take the equity in your home and give it away don’t do it.

Host: No, no, no. It was so easy during the, right before everything blew up. HELOC’s, you know home-equity line of credit. And hey borrow gives us your own home, and your value is only but going to go up. How many people got trapped in that? I got trapped in that. Well we decided we’re gonna make home improvements and invest in some other property and as soon as we invested that property the value of them went down.

Ziona: So, well I see I didn’t know that about you. So did you believe in hot by high buying, selling low?

Host: Well at the time, at the time it was you know it was investing in rental property. It was investing in Pasco County which is the fourth fastest-growing in the United States. And in a place where these equitable properties were selling in the $200,000-$250,000. Ours were less than $150,000 so we bought two. And then boom as soon as that ink dried it completely collapsed.

Ziona: Right the things when you buy rental property you also have to look at the market and see what the rental market is. Where do you find the rentals when you find the good renters who will not destroy your property?

Host: No we had both. We had some that were fantastic, actually there were they were people that we knew. The first renters were great afterword it was an absolute nightmare. And you have to be ready to handle all of it. And you know you we turn around and get rid of for less than half of which you paid, and then you get a tax penalty after that.

Ziona: That’s right that’s painful. So that’s why you know that’s why we offer the services that we offer, to get you out of the hole, the financial hole that you’re in. Preserve what you have, keep it for later years, keep it for the next generation, right? That’s what we want to do.

Host: No they can get their own, you know I love them to death. The next generation. But you know hey, I had to go earn mine so they can earn theirs. No I’m kidding.

Ziona: I hope you are!

Host: No, they got their college education. Hey when I kick it they are gonna make a ton of money so they should be in great shape! Yeah they are gonna be fine.

Ziona: Good, so at least that you’re a good parent. No matter what everybody else.  You are a good parent.

Host: Just don’t ask them, they may have a difference of an opinion. I think really be illustration of that is, if it was yeah good intention but you know the road to debt is definitely paved with good intention. And you know we thought we were taken of being part of this this great investment thing and it just completely collapsed.

Ziona: And I’ve told you in the past and it keeps happening again and again You know people, my clients, when the come to my office many of them just sit there and cry. Because that’s not how they perceive themselves. And you know a favorite thing they say is “but I had such good credit score, I had such,good credit, I used to pay my bills. I used to.”

So you know 99.9% of my clients end up in my office not because they wanted or dreamt or plan on showing up in my office. Many of them are still shocked that they are they and embarrassed. But we’re beyond that we I mean in my office we don’t worry about why you got there, how you got there, unless it’s fraud it really doesn’t matter.

Host: Good point, very good point.

Ziona: So there are many ways to reach that point of insolvency.

Host: The uhm, I think the. Well first of all I’d like to let people know that if they want to talk you about a consultation and such they can just go ahead and call you

Ziona: Yeah. And they can call me I’m going to give you two numbers. The number in here in the Brooksville area, and that is 352-678-2265 in the other one is 727-849-3328. So we will schedule you for an appointment either in our New Port Richey office which is on Trouble Creek. Which I find the name so appropriate.

Host: It really is true, yes.

Ziona: I took on the name so appropriate, right 5422 Trumbull Creek Road, New Port Richey. It is about a block away from US 19, so it’s a pretty straight shot down 19.

Host: Pretty much everyone knows 19, if you’re down there you know Trouble Creek. You know right exactly where that is.

Ziona: You can’t avoid it but cross it several times a day. Then my office in this area is in Spring Hill. But it’s down Cortez Boulevard, 4245 Rachel Blvd. in Springhill. And it’s by the Walgreens and Steak and Ale so I understand that is like the one and only Steak and Ale in this area.

Host: Once you find that you are good to go.

Ziona: Yeah by Lake in the Woods, Lake in the Woods.

Host: That’s the 678-2265 number they can leave a message or you can schedule it. Let’s talk about that initial conversation, because I think and you can back me up on this or correct me if I’m wrong. I think that the scariest part the worst part of this entire process is the point from picking up the phone to going in there sitting down across from you for that couple of minutes. And once that you start to realize there is there is a light, and it is not a train coming out.

How do we get people past that that nervousness of picking up the phone and then walking into the office?

Ziona: They are going to be nervous. But by the time that I am done talking to them, you have 50 60 minutes that go by. It’s a whole hour goes by, and I analyze your probably, get some information, analyze your problem, I propose a solution for you. You can then ask questions, further explore so it’s not just limited to 15 minutes. Some attorneys give you 10 to 15 minutes, and then that’s it you have to make a decision or half an hour make a decision. No, I will sit through the whole hour let you ask questions satisfy your inquisitive mind and I mean you have a lot of questions to ask about that. And we give you a whole free hour and if you don’t want to retain me then fine you’ve gotten good advice that will guide you whatever decision you decide to make. And if you decide that you want to retain my services then I’d be delighted to help you and put you back on the road to success.

Host: I think the other thing is to, is there you’re not obligated. No, you know you not obligated and I think that that helps a little bit if the first thing is they have to be committed to the idea once the walk in the door that’s not true.

Ziona: No that’s not true, and I you know I always I liken and myself to a respiration therapist you know, they come in and they can’t breathe. They have a slightly greenish tinge to their skin. It’s hard to breathe and then when they see that there is a solution I see deep breath, you know I mean just to take it in to relax, and in no time they look pink.

Host: And that’s important, very important, the key here and also want to mention to there may be a situation where you go in there and you think this is a got I got to file Chapter 7, I got to get rid of everything it’s all gone. And then after sitting down and talking with you they may not have to file. That’s not just it’s not just one or two options.

Ziona: No, we do offer a third option to negotiate the debt down. So we do that but down most of the people that I see I so far gone.

Host: That they just want to get rid of it?

Ziona: Yeah, also if you want to negotiate your debt you have to have the ability to make some deals. SO even if we settle the debt for $0.20 to $0.25 on the dollar you have to have that $.25 on the dollar available to settle the debt.

Host: The uh, are you pointing to creditors these days or a little bit more willing to work with you if they feel you are serious and about willing to work on it.

Ziona: I think so, yeah they will.

Host: But they would rather see that or just hear that you got to bankruptcy?

Ziona: They would like to settle, I think so. But at times you know it does not make any sense to settle with one or two creditors and then have the rest of them unresolved. That really makes no sense to do that. It’s an all or nothing. So let’s say that you owe a hundred thousand dollars roughly okay? And we settle every bit of debt for $0.25 on the dollar. You still have to have a big chunk there to satisfy everybody. That we don’t have to do it all at the same time so we can take one debt after another and work on it and resolve it over time period. You know it doesn’t have to all be done at the same time.

Host: And again on debtor’s, the creditor side of that. It’s almost like look you’re in line we’re going to take care of this we are doing what we. But again the smart thing to do is to bring someone in who’s smart who’s this what you do you negotiate with these people. I mean I do.

Ziona: See they don’t want to talk to you.

Host: No, I mean they would much rather talk to someone who has the ability and the knowledge.

Ziona: Right they want to talk to attorneys. People are able to do that for themselves, but it’s very rare but in large they want to talk to an attorney. And another service that we offer, actually we do mortgage modifications. So that that is a nice service, we have several going on court. I’ll be able to report to you, you know if you give me weeks a few months you know sometimes it takes a little bit longer.

Host: I think if nothing else, the fact of the matter is that there are laws that are built into help you. To protect you and there are so many, I never knew the fact that you could have a second mortgage under the right circumstances, you could have a second mortgage disappear.

Ziona: You’re right, they call this stripping second mortgage. We can strip the second mortgage, so if you’re if you remember I explained it before. I’ll repeat that if the value of the house is lower than what you owe on the first mortgage, so the first mortgage has to be bigger than the value of the house basically being upside down on the first mortgage. I can just wave my magic and that second mortgage is thing of the past and it is gone.

Host: I think the thing to do here is just like turn it over to you that we got less than a minute left, to just remind you again if you’d like to contact Ziona in the 352 area code it says 678-2265 or 727-849. Can’t read my own writing.

Ziona: Well remedial writing.

Host: Well I never would have been a doctor but I got the writing down.

Ziona: We’re doing remedial finances now we are doing remedial writing.

Host: Hey what the heck, you never know. It’s just next time I will hope to read. But thank Ziona, always a please.

Ziona: Thank you, always a pleasure.

Host: Thank you so much.