Member of the National Association
of Consumer Bankruptcy Attorneys
Member of Legal Services
of Hudson Valley
of Hudson Valley
Member of the Hudson Valley Bankruptcy Bar Association
Member of the Rockland
County Bar Association
County Bar Association
ARTICLES
The Law Offices of Allen A. Kolber, Esq.
Rockland County Office
|
Queens County Office
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AMERICA'S MIDDLE CLASS DISCOVERS BANKRUPTCY PROTECTION
In 2010, nearly 1.5 million families filed for bankruptcy protection. That is nearly 80 times greater than the number of individuals who filed for bankruptcy during the Great Depression. In the past 25 years, personal bankruptcy filings have climbed nearly 350%.
…if GM and Trump can do it, why can’t I?
Finally, the stigma of personal bankruptcy is gone. Finally, the American middle class is waking up to the fact that they, too, are entitled to government protection, just as General Motors, Ford and Chrysler (Congress injected $25 billion to restructure their debt) and Donald Trump (corporations bearing his name have filed for bankruptcy protection 4 times and Trump is still valued at approximately $2.7 billion). Forbes Magazine quoted Trump as saying that “great entrepreneurs” have used bankruptcy to restructure debt, free up capital, and improve their businesses. “Basically I have used the laws of the country to my advantage . . . just as many, many others on top of the business world have.”
Other millionaires who have filed for Bankruptcy protection? Henry Heinz (ketchup magnate), Milton Hershey (chocolate magnate), Henry Ford, Charles Goodyear (rubber magnate), PT Barnum, Michael Jackson, Elton John, Mike Tyson….and Walt Disney.
…our clients are middle class
Most of my bankruptcy clients are middle class families with both spouses working, they own a home or condo, one or both spouses has a college or Masters Degree, they have paid for their children’s college educations, or are currently paying their children’s student loans due to the fact that their children cannot find jobs after graduating college.
A recent poll describes the typical bankruptcy filer in America as follows:
By now we all understand why the American middle class has been hit so hard by the recent financial crunch.
Housing and mortgage debt (first and second mortgages) is at an all time high. Rising health care costs, heating fuel and gasoline costs further eat into the middle class budget. A college education now costs in excess of $80,000. Most of my middle class clients are already living on the edge and are barely making ends meet, or are supplementing their income with credit cards or loans against their 401(k)’s.
A recent poll found that America is now saving at a negative rate (individuals living off of their savings or, worse, borrowing against their 401(k) or pension plan).
A middle class family that is hit by loss of a job, divorce or illness tips straight into the abyss of debt.
…but isn’t it immoral to file Bankruptcy?
Homeowners and individuals in debt often feel that it is “wrong” or “immoral” to file a Bankruptcy and “cheat” their creditors. They think filing for Bankruptcy protection will make them morally bankrupt as well.
There are no moral or ethical issues in filing a Bankruptcy case, just as there were no moral or ethical issues contained in the contract you entered into with your credit card company or mortgage lender.
Both Federal & State laws allow credit card companies and mortgage lenders to adjust their interest rates, charge you late fees, over the limit fees and other penalties. If you are late in making a payment, US law allows your creditor to use a collection agency to harass you, or sue you in court. If the creditor obtains a judgment against you, the law allows the creditor to freeze your bank account, garnish your wages, repossess your car or sell your home in foreclosure.
The same United States law also enacted the U.S. Bankruptcy Code, which allows all eligible debtors (GM, Trump or you) to eliminate or restructure their debt, stop lawsuits, wage garnishments, bank restraints, foreclosures or repossessions.
The same U.S. Bankruptcy Code will protect up to $1 million of your retirement funds, $300,000 equity in your home, 2-3 cars and $10,000 in the bank. The Bankruptcy Code is called “The Fresh Start”.
Why should the American middle class family take a stand and declare that it will ride out the financial crisis by itself while the largest corporations and wealthiest individuals in America utilize the government laws to their advantage?
Even the European Union and Japan are enacting broad bankruptcy laws in order to generate more business and entrepreneurship. The new bankruptcy laws allow businesses to take more risks, and receive government protection if those risks fail.
Don’t just take it from me; take it from the wealthiest individuals and corporations in America. Filing a bankruptcy case is not dishonorable. It is the smartest economic path toward financial stability.
…if GM and Trump can do it, why can’t I?
Finally, the stigma of personal bankruptcy is gone. Finally, the American middle class is waking up to the fact that they, too, are entitled to government protection, just as General Motors, Ford and Chrysler (Congress injected $25 billion to restructure their debt) and Donald Trump (corporations bearing his name have filed for bankruptcy protection 4 times and Trump is still valued at approximately $2.7 billion). Forbes Magazine quoted Trump as saying that “great entrepreneurs” have used bankruptcy to restructure debt, free up capital, and improve their businesses. “Basically I have used the laws of the country to my advantage . . . just as many, many others on top of the business world have.”
Other millionaires who have filed for Bankruptcy protection? Henry Heinz (ketchup magnate), Milton Hershey (chocolate magnate), Henry Ford, Charles Goodyear (rubber magnate), PT Barnum, Michael Jackson, Elton John, Mike Tyson….and Walt Disney.
…our clients are middle class
Most of my bankruptcy clients are middle class families with both spouses working, they own a home or condo, one or both spouses has a college or Masters Degree, they have paid for their children’s college educations, or are currently paying their children’s student loans due to the fact that their children cannot find jobs after graduating college.
A recent poll describes the typical bankruptcy filer in America as follows:
-
a middle class head of household with children and a full-time job.
-
better educated than the general population.
-
almost all bankruptcy filers suffered a catastrophic personal event such as loss of employment, divorce or serious medical issues.
-
homeowners who were defrauded into obtaining first and second subprime mortgages.
-
seniors on a limited income with extraordinary medical expenses.
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unemployed or underemployed college graduates with student debt reaching $100,000.
By now we all understand why the American middle class has been hit so hard by the recent financial crunch.
Housing and mortgage debt (first and second mortgages) is at an all time high. Rising health care costs, heating fuel and gasoline costs further eat into the middle class budget. A college education now costs in excess of $80,000. Most of my middle class clients are already living on the edge and are barely making ends meet, or are supplementing their income with credit cards or loans against their 401(k)’s.
A recent poll found that America is now saving at a negative rate (individuals living off of their savings or, worse, borrowing against their 401(k) or pension plan).
A middle class family that is hit by loss of a job, divorce or illness tips straight into the abyss of debt.
…but isn’t it immoral to file Bankruptcy?
Homeowners and individuals in debt often feel that it is “wrong” or “immoral” to file a Bankruptcy and “cheat” their creditors. They think filing for Bankruptcy protection will make them morally bankrupt as well.
There are no moral or ethical issues in filing a Bankruptcy case, just as there were no moral or ethical issues contained in the contract you entered into with your credit card company or mortgage lender.
Both Federal & State laws allow credit card companies and mortgage lenders to adjust their interest rates, charge you late fees, over the limit fees and other penalties. If you are late in making a payment, US law allows your creditor to use a collection agency to harass you, or sue you in court. If the creditor obtains a judgment against you, the law allows the creditor to freeze your bank account, garnish your wages, repossess your car or sell your home in foreclosure.
The same United States law also enacted the U.S. Bankruptcy Code, which allows all eligible debtors (GM, Trump or you) to eliminate or restructure their debt, stop lawsuits, wage garnishments, bank restraints, foreclosures or repossessions.
The same U.S. Bankruptcy Code will protect up to $1 million of your retirement funds, $300,000 equity in your home, 2-3 cars and $10,000 in the bank. The Bankruptcy Code is called “The Fresh Start”.
Why should the American middle class family take a stand and declare that it will ride out the financial crisis by itself while the largest corporations and wealthiest individuals in America utilize the government laws to their advantage?
Even the European Union and Japan are enacting broad bankruptcy laws in order to generate more business and entrepreneurship. The new bankruptcy laws allow businesses to take more risks, and receive government protection if those risks fail.
Don’t just take it from me; take it from the wealthiest individuals and corporations in America. Filing a bankruptcy case is not dishonorable. It is the smartest economic path toward financial stability.
