I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.


Author: Cathy Moran, Esq.

10 Oct Lost IQ: The True Cost Of Just Paying The Credit Card Minimum

Bankruptcy can seem so scary or humiliating that lots of folks resolve to just keep paying the minimums on their debts. You know what it feels like to have more bills than you can pay. You don't know how bankruptcy will affect you. It seems easier to stay the course, pay the minimums, and plod along. It may be sort of comfortable, and knowable, but it may be a life sentenceof being in debt. You won't get ahead, for sure, but you don't have to face the uncomfortable fact that you can't really ever pay off your debts. On the surface, it seems like a rational choice.
  • It's allowed by the terms of the credit card agreement.
  • It saves you from looking at the big picture of your finances.
  • You still have plastic in your wallet.
But what's the real and total cost to you of paying forever?

The non monetary cost

If you decide to live with overwhelming debt you'll encounter costs that don't appear on your balance sheet. Being in debt is stressful. One of the old surveys measuring stress listed financial problems as a major cause of stress, along with death in the family, divorce, birth of a child, and serious illness. Having a mortgage of more than $150,000 was deemed to be a serious source of stress. These days, I regularly deal with Californians whose mortgage debt is $500,000 to $900,000. By that definition, everyone I see is stressed. Health professionals have long cataloged the bodily consequences of stress. It is not just something you live with and tough it out. It shortens life as well as detracts from the quality of life. I worry about the life expectancy of some of my clients. However, new academic studies have expanded our understanding of stress. They found something absolutely new.

Stress makes you stupid

That's right: financial stress causes a loss of IQ.
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10 Sep Getting Rid Of Tax Liens After Bankruptcy

The tax may be discharged but thetax liens live on after bankruptcy. One of the basic principles of bankruptcy law is that the bankruptcy discharge eliminates personal liability, but absent a court order avoiding the lien, it survives the bankruptcy. That means that the assets to which a lien attaches continue to be burdened with that lien after a Chapter 7 bankruptcy. While the creditor who holds the lien cannot sue you or claim a lien in assets you acquire after the bankruptcy, the lien on things you owned at filing remains. So what's a newly discharged debtor to do about a tax lien? You have choices.

Do nothing

A properly perfected tax lien attaches to everything you own, down to the dirty socks and your outdated cell phones. The first question is whether you care that there's a tax lien. The lien doesn't attach to the new socks you buy after bankruptcy, and the "stuff" you had at filing may all have little value and no appeal to the IRS. Who cares if there's a tax lien? The passage of time may make the lien irrelevant. The collateral wears out and is discarded. The lien expires 10 years from the date the tax was assessed. The IRS isn't really interested in dirty socks. Time will heal this wound. You don't have to do anything.
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27 Aug Why The Information You Give Your Bankruptcy Lawyer Has A Sell-By Date

The information your bankruptcy lawyer needs will go stale in a short time. Keeping up the freshness is important to the success of your case. Bankruptcy information is like milk: it smells after it sits for a while. Dump your data on your lawyer, then drop out of sight, and you risk that your bankruptcy filing based on that old information will be seriously inaccurate. Here's why you don't want your bankruptcy information to go stale.
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10 Aug Super Heroes Fight Debt

The GetOutOfDebt guy is my hero. He's not quite as swashbuckling as Batman and Superman. Not as suave as Elliot Ness, battling crime gangs. But he's fighting for a better world, nonetheless. He fights Debt, a blight on too many in our squeeze-the-middle class, consumer society. Steve Rhodesings my song. He...

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