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Spring Clean Your Finances

What does it mean to spring clean your finances?  Spring cleaning occurs every year.   Some people clean up their yards.   Others deep clean their houses, removing unnecessary items.  Many people also attempt to “spring clean” their finances.  Getting things in order in your financial life could be the most important decision you make all year.  Extend this year’s spring cleaning into a brand-new domain by seeking some of the below goals for your finances.

De-Clutter Your Financial Life

Just as we “de-clutter” our house, sometimes you also need to de-clutter your finances.   You can de-clutter your finances by removing all unnecessary items out of your budget.  Your goal should be to reduce your expenses as much as possible.  Some expenses may be possible to reduce or rearrange.   Some expenses will simply need to be eliminated.

Systematically Pay Off Your Debts

Taking care of your debts and becoming as debt free as possible should also be your goal when Spring cleaning your finances.   The most basic way of achieving this is to make a plan to systematically pay off your debts.   Although your plan may take several months or even a few years, you should always have a solid plan for permanently eliminating your debt.  If you do not have this plan, then your financial house will remain in impossible disorder.  Plan for where every dollar goes and make sure every dollar counts towards your long-term goals.

Settle Your Debts

When Spring cleaning your finances, sometimes a particular debt may be too large to pay in full.  Many times, you can allow these debts to go into default and then arrange to pay the debt off with a single lump sum payment.   Sometimes you can only pay as little as 20-30% of the original debt.  If your debts become too large to repay, settling your debts can be a wonderful technique for putting your financial house back in order.

File for Bankruptcy

Spring cleaning your finances sometimes requires more bold and powerful action.  If your debt situation is truly impossible, you need to seek the advice of a bankruptcy attorney.  The most common time that people file for bankruptcy is during Spring.  A bankruptcy attorney can guide you through the bankruptcy process.  In addition, if bankruptcy is not the correct choice, the attorney will very likely also present other options for dealing with your debts.

Take Action Right Away

Do not be afraid to take bold action when Spring cleaning your finances.  Your financial life needs to be in order. It is actually even much more important than just the physical order of your home!  Make it your goal to get your financial Spring cleaning plans into action as soon as possible.

Indianapolis Bankruptcy Attorney John Bymaster explains how to spring clean your finances.

Never Take the “Easy” Way – Course #5

Why does everyone take the easy way in life?  It’s simple – it’s easy!   It is much easier to do things the fast “easy” way instead of doing things correctly and thoughtfully.   The easy way has an immediate reward.   The correct and thoughtful may reward you many-fold over a life time.  One of the most important lessons to learn for financial success is to never take the “easy way.”

Taking the “Easy” Way Destroys your Chances for a Financial Future

Taking the “east way” destroys most people’s chances at a successful financial future.  By taking the easy way, you are essentially trading your future financial success for the “now.”  If you want a car “now” by financing it, then you are destroying your chances at saving for investments in the future.  If you buy a mortgaged house, then you are destroying your chance to learn how to acquire a house (or many house) paid-in-full by careful financial planning.

Almost every time you take out a loan, you are trading your financial future for the immediate.   Credit Cards and loans are an easy way to pay for life expenses, but they doom you to financial failure almost every time.   In fact, if you are taking out loans for living expenses, you are likely already to financial planning and are “taking the easy way out.”

Taking the “Easy” Way Destroys your Motivation for Learning About Financial Things

If mortgage loans were outlawed next week, do you think that would end most people’s desire to own a home?  Absolutely not!   Most people would immediately seek knowledge or understanding on how to buy a home paid-in-full over some short period of time.   Perhaps, they would create other creative ways for purchasing a home that would not involve mortgages.  In any case, the public would quickly be forced to gain considerable financial knowledge and discipline in order to achieve the now “harder” goal of purchasing a house.

Financial Education Course 5 - Never take the easy wayMortgages or other financial practices do not need to be outlawed: you can chose to gain considerable financial knowledge and discipline to take the “harder” way even if “easier” options are still available.  The real twist to the “easy” versus the “hard” debate  is the very words in which they are described.  In reality, the “hard” way of doing things is actually much easier over time if it is applied.   The “hard” way is actually not hard at all: it is just the correct and moral way of living your financial life.

We all have heard of the concept of being a good steward with our lives.   We all have the moral responsibility to manage our lives in the most productive and orderly way possible.   This is the very fabric on which our society is built.  When you do things the hard or correct way, then you get to very much take advantage of the peaceful financial systems that our present in our world.  You essentially are able to allow “money to work for you” – instead of just “working for money” your whole life.

For example, a person that diligently studies and saves to buy a paid-in-full home will be much benefited by not having to pay mortgage payments.  If he was able to acquire the paid-in-full home over two to three years, then what is stopping him in the future?   The same person can acquire one, two, or maybe thirty more paid-in-full properties over a lifetime.  He can receive rental income from these properties.  From this income, the decreased demand for “job” income can even give the person more time to build their financial knowledge.  Later in life, this same person could have a multitude of real estate or business-based assets generating income.

Or, the same person could have gotten a mortgage.  His financial “mind” would have stopped there.  He would probably still be paying on the same mortgage twenty years later.  He would only partially own one mortgaged house.

Conclusion: The “Easy” Way is Dangerous

Do you understand now the danger of doing things the “easy” way with finances?   The “easy” way is actually a deception: it is much, much harder over a lifetime.   If your financial past is dominated by the “easy” way, you may need to completely start over in life.   Your commitment to following the “harder,” correct way of approaching finances may require you to make some drastic changes.  These changes may be incompatible with your previous, “easy” way of going about your financial life.

Test Your Knowledge!  Take The Quiz!

Quiz 5 – Never Take “Easy” Way

Future Courses Will Be Released Soon!

Do the Opposite of Everyone Else – Course #6
Action Plan – It’s Game Time!  – Course #7

Are There Any Rules to Follow at the Bankruptcy Meeting?

The bankruptcy meeting, sometimes called “the meeting of creditors” is an administrative hearing that requires the respect and timeliness of all who participate.   This “Section 341” bankruptcy meeting has a few rules that must be followed in order to have a successful meeting.  Let’s go over the few basic rules of the bankruptcy meeting of creditors.

Rule One: Be on Time and be Professional

Although the bankruptcy meeting is not as formal as some court hearings, it is critical to be on time and to act professional during the meeting.  Your bankruptcy meeting will be scheduled some 30 to 40 days in advance.  If you are not on time, then the court will know that it is your fault. The court and your attorney have given you several documents as to the nature and scheduled timing of the meeting.  If you are too late, the court will reset the meeting once.  A second late appearance could result in the case being dismissed.

During the bankruptcy meeting you must act and dress professionally.  You do not need to wear your best “high-dress” attire, but you need to come in a reasonable and respectful form of dress that is appropriate for a legal hearing. During the meeting, you should also remove any hats if you are a man.  Also, no one should be chewing gum or doing any other form of distracting activity.

Rule Number Two: Bring all Required Documents

The bankruptcy meeting also requires documents that must be brought to the meeting.  If these documents are not brought to the meeting, then you may have to come back because your meeting will be canceled or postponed.  First, you must bring your Drivers License and Social Security card: these two documents are absolutely necessary for the bankruptcy meeting to occur.  Second, you must bring your two most recent paycheck stubs.  Third, you must bring 90 days bank statements for each bank account.  This time period to bring must cover the 90 days directly before the bankruptcy case was filed.

In some cases you may already have brought these documents to your attorney at his or her office. However, the local rules require that you also bring these documents to the bankruptcy meeting. The above documents presented do not include every potential document that could be requested for your bankruptcy meeting. The above documents are only the basic documents that are required for every Chapter 7 case.

Rule Number Three: Tell the Truth

The most important rule to follow during the bankruptcy meeting is to tell the truth. The bankruptcy meeting is an examination where you are put under oath. If you do not tell the truth or be transparent during the examination, you will be breaking the law.  Not telling the truth can easily come back to haunt you later.  Resolve from the beginning to tell the truth every time both to your bankruptcy attorney and the bankruptcy trustee. If you always tell the truth, then your bankruptcy attorney can better guide you as to what your options may be an any particular situation.

Get Financially Savvy Before You “Take the Hit”

Get financially savvy before you take the big hit

Everything builds up in our financial lives. If we are moving in the wrong direction financially, eventually we are going to “take the hit.”  Years of bad financial decisions and no improvement on financial understanding will add up.  Eventually, it will lead to one massive, financial, knock-out “hit.”  It may come in bankruptcy, loss of relationships, a mental breakdown, or many other negative ways.  It all simply becomes unbearable.  

Savvy means workable knowledge.  Getting financially “savvy” can help you to avoid this future “hit.” It will also give you the hope needed to continue after a financial “knock-out” has already come into your life. 

Financial Savvy Requires Massive Life Changes 

You can read all the financial books you want. You can go to a multitude of financial seminars. However, knowledge is simply not enough.  You must be willing to make a massive life changes to become financially savvy.

If you are currently working so much that you have no time to relax or study, you are going to need a massive life change. It is better to shut your entire financial life down than to continue in financial folly.  You may need to surrender your house and everything you own.  You may need to file for bankruptcy.  You will still be better off in the end if you make the commitment to change financially and never go back to your old financial ways.

No Change No Gain: Get Out of “Payment” Bondage

Many people are unwilling to change.  They put financial education and financial savvy on the lowest part of their priority list. However, the same people work hard day in and day out to barely live paycheck to paycheck.  They somehow believe that they must hang on to the possessions they are barely buying on installment  through mortgage or car loans.   If they lose these items, it would be he highest anguish and a clear sign of personal failure.  This mindset is damaging and counterproductive. 

This “monthly payment” perception of financial reality is false.  You already do not own anything.  Only financial bondage follows.    The person with a 100 year old $75,000 house with two cars- all paid in full- this person is successful financially.   The person with a $400,000 house and two new cars -all with heavy loans- this person is in bondage.   If the paychecks stop, this second person instantly loses everything. 

The Payment Mentality Is Doomed to Failure: Drop it for Financial Savvy

To become financially savvy, you need to adopt the opposite of a payment mentality. Your mentality needs to be based on acquisition: the acquisition of financial knowledge and wealth.   Every month and every year should be measured by this question: has my wealth and my financial knowledge increased?  Every year a financially savvy person has a higher net worth.  Also, each year a financially savvy person has acquired more financial knowledge.  

Dropping the “payment mentality” is the first step towards becoming financially savvy. First, it frees up time and takes away all illusions.  What you own is what you own.  If you want to acquire something else, you seek new financial knowledge to do it.

Secondly, dropping the payment mentality will help you focus on acquiring true wealth. If your total assets are not slowly increasing every year, you will know something is wrong.  In such an event, you will make the appropriate changes. Essentially, you will no longer be satisfied to “spin your wheels” financially.   Being financially savvy will be a number one goal and sometimes even a pretty enjoyable hobby!  No longer will financial knowledge be dreaded.  Financial savvy will become a natural and desirable part of your life.  

Should You Be Able To Get Rid of Student Loans Through Bankruptcy?

Find out if student loans are discharegable in bankruptcy

The answer to this question is probably “Yes.”  You should be able to discharge student loans in bankruptcy during most situations.    However, under the current law you cannot discharge student loans in bankruptcy with almost no exceptions.  Many strongly argue that the legislation which culminated in the complete banning of student loan bankruptcy in 2005 is immoral and biased.  The legislation was clearly motivated by private business interests.  It has created a “student loan debt crisis,” a new hot topic of interest and debate.   Some say this “crisis” is next “melting point” our economy will face.  

But, more importantly, what about the moral perspective?   From a moral perspective, you SHOULD be able to discharge student loans in bankruptcy. But why?

Student Loan Lending is Oppressive and Should Be Against Public Policy

Student loan lending is clearly oppressive and should be against public policy.  The student loan industry has quickly transformed education into an “industry” as well.  Higher education should never be allowed to grow into a profit-driven industry.  Education should be affordable or free: it should always be about the students or society as a whole.  Higher education in the past was promoted and controlled by churches, charities, and true non-for-profit organizations.  Higher education should be a mainstay of freedom.   Higher education should remain untainted by corporate greed and economic oppression.

Higher education has grown into a monster funded by never ending student loan funding.   Astronomical building projects, sports programs, and other non-necessary ventures dominate the higher education world.   This money-raking beast has replaced previous higher education system.  The old system was focused on the students, the welfare of society, and higher ideals.   

Students are charged astronomical rates to attend classes.  These 18-19 year old students are told not to worry: just sign the loans documents.   However, most of these students have never had a job or a loan in the past. The students have no concept of the oppressive debts they quickly assign to themselves so early in life.    

What do the students get in return?  Many times absolutely nothing.  In fact, many places of “higher” education are so devoted to a profit model that they accept almost anyone with no regard to their drop-out rates.  Other schools are slightly more dignified, but almost the entire system has been corrupted by this student loan legislation.   A good part of these problems can be eliminated over time with a single law change: the full discharge of student loans in bankruptcy. 

Falsified claims of “immoral” bankruptcy filings were the Trojan Horse

The Trojan Horse was simple: some people were filing bankruptcy to immorally discharge their student loans.   However, these minor immoral occurrences were showcased intentionally to get law changes passed that were clearly against common sense public policy.   Student loans became the norm: this far greater evil quickly seeped into our entire higher education system. 

By intention, the real question at hand was improperly phrased: should the government allow and support a large student loan industry?  By progressively disallowing the discharge of student loans in bankruptcy, two new industries for profit developed.  The “big” education and the “big” student loan industries. Both of these industries are very bad for society.  They should have never been allowed to develop.  Education was once considered a “sacred” institution.   Can such a claim of sacredness still apply after the changes “big” business has made?

Student Loans are Not Dischargeable in Bankruptcy . . . But Probably Should Be

The non-dischargeability of debts is oppressive in any case.  Obviously, it is very oppressive for the government to support non-dischargeable loans for young students who have no proper financial understanding.  When educational debts were forbidden for discharge, many undesirable, profit-driven aspects began to be woven into our higher education system. 

Therefore, should student loan debts be discharged in most bankruptcy cases?  The answer this question is probably “yes” for obvious societal reasons.  Current legislation forbids student loan discharge.  Hopefully, the future will see the need to change this law after the full effects of our altered education system become apparent.   

PERSONAL NOTE: I write to support law change.  Student loans should be discharged like any other form of debt.  This is not due to personal reasons: I have no student loan debts.  Instead, I have seen this immoral system and it’s result “up-close.”  My experience as a Bankruptcy attorney and with higher education have clearly revealed all the abuses that are taking place under the current legal system.