How are you doing today? Welcome back to This Needs To Be Said.

So you’ve seen the attorney and been in his office three times. Now, these days you just can’t afford to do that. People are working hard, they’re occupied from 8 a.m. till 6 p.m. and it’s become a real burden for many people to go see the attorney when they have to work so hard. Another problem is, most people are looking for lawyers on the internet these days, and maybe you’re located in Anne Arundel county and you see an attorney in Pikesville, that’s got 113 five star reviews, and you really want to work with that attorney.

But for you to get up to Pikesville, from Anne Arundel county, it’s 45 minutes to an hour each way, and that’s a burden, so then you’re going to take your risk on another attorney that may or may not be qualified and give you the confidence that you would want in a lawyer, that’s a second problem. Or, maybe you’re disabled, maybe you work crazy hours, maybe you just can’t get out of the house, maybe you don’t have a car, maybe you’re too far from the lawyer’s office to see if you can have your financial problems resolved.

So for all of those people, I have a program, and that program is convenience bankruptcy. What we do in convenience bankruptcy is first, we do the initial consult over the phone, and I collect the data that I need, we find out what your goals are, we lay out options that I think will solve your problem and if you decide you want to move forward with our firm, we can collect the payments over the phone with a debit card, we can set you up if you want, with a payment plan that tracks automatically from your debit card. We mail out a binder, we do things either over email … What I’m discovering as we get deeper into the 21st century, is that more people yearn for pieces of paper that they can fill out, or even a better way to put it is, choice.

Some people want to have a binder with all their papers in it, that they can refer to and put on a shelf, other people are more than happy getting documents sent to them by fax or email, and then leaving them in a special folder in their Dropbox or their Google Drive. We work either way, however you want to work, we’re happy to work with you in that regard. Then what happens is, you work for the papers, we have five different ways for clients to send us documents. They can send them by email, they can send them by fax, they can drop them off at the office, they can upload them or we actually have returned, self-addressed stamp envelopes that they can dump their tax returns and their pay stubs and their bank statements and mail them into our office.

Then we work up their documents, we send them to them, they sign them, they can scan them, they can take a picture of them, they can fax them, so that we have their signatures on them. We upload them to the internet, and they have one public appearance. I wish there was a way that I could get them out of that, but you have to appear physically in front of your bankruptcy trustee, to answer that person’s questions about your finances. And of course, we send an attorney with you to protect you, and to make sure everything goes the way we expect it to go.

That’s the only time you need to leave your house as part of the entire bankruptcy process. We’re proud and excited about this program, because it’s enabling us to reach a lot more people than we used to be able to reach, and we’re offering a program that I think really helps people who just can’t get out of their house, or take the time off from work to meet with the bankruptcy lawyer.

What did you see Ron, in your practice, or what did you see as you were reaching out to people, or people were contacting you about bankruptcy that made this process come about?

How can people get in touch with you to find out more about convenience bankruptcy?

And that really mixes up a lot of people that think, well wait a second, I had a judgment against me, judgment became a lien against my home, I went through bankruptcy, flypaper got stripped off of me, why it didn’t get stripped off my home? The answer is; because it doesn’t work that way. The flypaper’s going to stick to your assets, if it’s there; when you bring it into bankruptcy, unless you do something affirmative to strip it off. And some things you just can’t strip off, but other things you can, and it’s really important that you not be caught off guard in your bankruptcy by just assuming that you go through bankruptcy and the flypaper comes off you, so it automatically comes off your assets. Doesn’t work that way.

So, you have to be very careful. What you have to do then, is you have to reopen the bankruptcy case, sometimes years later, and you have to ask the judge to strip off that judgment lien, which under the right circumstances, you can do in bankruptcy. But, the judge doesn’t have to let you do it years later. The judge could say, no I will not allow it because it’s unfair, because we don’t know if all of the circumstances that have to be in place for you to strip off that judgment lien are still in place. And it’s not fair to the creditor now to have to reconstruct what the situation was years ago because you, Mr. Debtor, didn’t do what you were supposed to do at the time. So, it’s a real gotcha if you’re not careful and if you’re not aware of that quality of debt as it relates to your assets.

That’s why I call it the flypaper concept. Because you’re going to peel the flypaper off yourself, without having to do anything special, but it won’t peel off your assets unless you do something special. And you know what? Sometimes you can’t peel it off at all. I mean a home mortgage; you can’t peel that off most of the time in a Chapter 7, but sometimes you can peel off or you can affect the flypaper of a car loan in a Chapter 13, under the right circumstances.

Your ability to peel off the flypaper from your assets in a Chapter 7, a straight liquidation, is limited. You have more right to affect it in a Chapter 13. So, that’s the flypaper theory of debt and bankruptcy.

We’re talking about resetting your life, this is, to me, to make it very dramatic, it’s life or death, because you are drowning in a financial situation, not being able to move forward in life and you say, okay I’m going to hit the reset button, and I’m going to file bankruptcy, and get with an attorney and figure out which chapter works best for me, and I want to be able to be able to move forward in life. But, you’re telling us today if we’re not careful, if we’re not with an attorney who understands the flypaper concept, we still are not being reset. We still have some residue from things that are dragging us down, and it doesn’t sound like it’s 100% guarantee that some things will get unstuck, but at least know about it. Don’t be blind about it. Am I understanding you right?

Hello, everyone. Thank you so much for joining us today on This Needs to Be Said. Our friend, attorney Ron Drescher, is coming to talk with us about bankruptcy matters. What a lot of people are learning through every time he comes to visit with us is that bankruptcy is not the end, but he’s going to share with you today about a course that he is able to offer his clients that is going to really help you get back on track after, I would call it a storm, but after bankruptcy. Ron, thank you for joining us again on This Needs to Be Said. How are you?

I’m doing great. How are you doing Katherine?

I am doing wonderful. I’m excited to hear about this new program that your company is offering to your clients. Let’s talk a little bit about that.

Okay, sure. It’s called 720 Credit Score. It’s a course with videos, and workshops, and exercises, and lessons to give, mainly my clients, really mainly people who have been through bankruptcy, but it could be anybody with bad credit a laser focus to help them rebuild their credit. The twelve and twenty-four months after they emerge from bankruptcy, they can start resuming normal, meaningful credit scores.

Mm-hmm. Now, what are some of the things you’ve heard from your clients that has surprised them? Let me see if I can position that question a better way. I’m asking about rebuilding the credit. Even if a person hasn’t been through bankruptcy, they may be in a position to need to rebuild their credit. What I think what I really want to impress on the audience today is that when someone goes through bankruptcy, like the emotional part of it, they feel like all is lost. What we’ve tried to accomplish through our conversations with you is that all isn’t lost. I guess I want to know, what’s been the most surprising things that your clients have learned through working through their bankruptcy with you.

Well, the most surprising thing that they’ve learned through working through the bankruptcy is that the right lawyer and the right team can make the process much less painful and much more dignified than they were expecting. That’s the biggest takeaway that I got. Because of that feedback, I decided that I really needed to make sure that my clients continued the road to financial excellence by bringing in this new program. It’s a new program for me. It’s been around since about 2013, so it’s been around long enough for it to have a track record. It’s proven to be successful in helping people rebuild their credit. I think this is the next and logical step for my firm to offer people who are undergoing financial distress.

Tell us that program again because I want to show them the difference. They can check it out themselves, but it would be more beneficial if they go through you. Let’s show them the difference. Tell me the name of the program again.

The name is 720creditscore.com. That’s where you’re going to find out more about it.

Okay.

If you go to the website, you’ll see. They charge … It’s a 14 week course and they charge $1000 for it.

Mm-hmm.

People are paying $1000. It’s a 14 week program. It teaches you how to rebuild your credit the right way, why most credit scores are wrong, which credit cards actually hurt your credit score, how to stop lenders that report the wrong information, how to re-establish your credit after a bankruptcy, foreclosure, or short sale.

Mm-hmm.

It’s understandable why they’re charging $1000 for this program. If you think about it-

It’s not too far-fetched. It’s even, again, it’s understandable. It could even be a reasonable price. However, they’re going to get an even better price by working with you.

Oh, they’ll get a much better price. For many clients that sign up with us, we bundle it with their attorney’s fee so that they really aren’t paying anything for it. I also offer it as a stand-alone product for hundreds, and hundreds, and hundreds of dollars less than what it costs because I’m buying it in bulk so I can pass that savings along to my customers. The reason why even $1000 is a meaningful value is, if you run the numbers between going and buying a car at 18 or 19% interest, going and buying a car at 5% interest. That’s hundreds of dollars a month that you can afford. I talked a little bit about this in my book, File Bankruptcy and Get Rich. Chapter 9 is The Bankruptcy Miracle, which is that just filing bankruptcy itself for most people will result in improvement of their credit score. Which is a counterintuitive thing, but is really true because lenders and creditors stop the negative reporting once you get your bankruptcy discharge. That by itself is help, but if you’ve got a systematic proven approach to rebuilding your credit after bankruptcy, it could be worth thousands, and thousands, and thousands of dollars to you in a better car, a better house, and other better credit terms after bankruptcy.

Mm-hmm. What do you like most about the course that you’re going to be providing for people to get back on the right track. Yes, it helps them to learn credit repair. Yes, it helps them get back on the right track, but just filing bankruptcy helps them, again, getting back on the right track. What is it about the 720 Credit Score that you really like?

Well, it puts in one place the tested and proven information that clients need to accomplish their ultimate goal, which is not just to get a discharge and to get protection from creditors, but to make their life more of a normal life. Where they can make normal decisions without the burden and the handicap of being impaired on the credit side. Every client, not most clients, not many clients, not the majority of clients, every client wants to know the impact of bankruptcy on their credit profile.

Of course.

Every client. It always comes up. It’s exciting to me to be able to say, “Look, we have a step by step program.” There’s no secret of should I do this or should I do that? How do I challenge something on my credit report? People are afraid to look at their credit reports. They’re afraid to look at their credit reports.

Yeah, like a horror movie.

What I say is, “No, go, and look, and see, and learn, and improve, and grow, and conquer.” I believe that you can do that.

I think, for me, what has been the most amazing thing about interviewing you and learning about bankruptcy process is that bankruptcy attorneys actually have the ability to empower people. That is one of the most surprising things for me to learn through this process. I’m learning about 720 Credit Score today because you’re sharing information, but because I’ve talked with you a couple of times before I say, “Oh my gosh, not only looking at my credit score may be scary, but talking to an attorney is scary and it means you’ve done something bad if you file bankruptcy. But no, no, and no. It’s not scary to look at your credit score. It’s not scary to talk to an attorney. It’s not bad if you have to file bankruptcy. If you find yourself in that situation.” I mean, that has been surprising to me this whole time. Each time I talk with you, I’m more empowered myself so I know This Needs to Be Said audience is as well. I just want to say thank you for that and continue to wow us. All right?

Well, thank you. That was a very nice compliment, Katherine. I really take it to heart and I’m very gratified to hear you say all of those things.

Now, tell the This Needs to Be Said audience how to get a copy of your book and then how they can get in touch with you, personally.

Well, you could always go get my book by going to drescherlaw.com and fill out that form to make sure you get your book. To find us, to schedule a consult, just call 443-438-1966 and you’ll talk to someone at my office and I’ll make sure that you can schedule a time to talk to me. I definitely like to make myself available to people who need our services.

Awesome. Ron, I want to say thank you so much. I’m excited to find out more about how people are enjoying the 720 Credit Score program that you’re offering and a future conversation and much success. Continue to empower people through bankruptcy, all right?

Thank you so much. I appreciate it and please continue to empower people through your show.

Awesome, thank you. Have a wonderful day, Ron. Until next time. Bye, now.

Bye.

The legal term is your exemptions. The exemptions are the amount of money or property or assets or stuff that you’re allowed to keep even though you’re not paying your creditors in full. In Maryland you’re allowed to keep 23 thousand dollars’ worth of the equity in your home. You’re allowed to keep a thousand dollars’ worth of anything that you’d find in your house. Then you’re allowed to keep about 11 thousand dollars of almost anything else and there’s some refinements in there. Usually we’re talking about that 11 thousand dollars that’s discretionary for people in bankruptcy to keep. Baring that now let’s go back to the tax refund. You’re going to get this tax refund and you have other things. Maybe you’ve got a wedding ring, maybe you’ve got money sitting in a bank account, maybe you’ve got a car that’s paid off. These are all assets that a trusty in bankruptcy are going to look at in deciding whether or not you have assets that can be sold to pay creditors. That’s the trustees function. That trustee is not out to hurt you. The trustee is not our to make sure that you don’t get your bankruptcy. The trustee is only looking to see if you’ve got assets that can be used to pay your creditors even if it’s as little as a penny on the dollar. That’s the trustees role.

The trustee loves tax refunds because it’s cash. It’s easy cash that he’s going to be able to grab as soon as you file your tax return. Your first move if you know you’re going to be filing bankruptcy is to look at all of your assets, sit down with your lawyer, look at your assets and say okay what tax refund am I expecting to get back? How much is that going to be? How much are the other assets I have? Are those going to fit into the exemption limit that I have? Then you can decide … you have to decide then am I going to file bankruptcy now or am I going to wait until after I get my refund and then file the bankruptcy. It depends because if you’re going to have a refund that’s going to put you over that exemption limit we call that an asset case or an over exempt case because your over what’s exempt. Then you ought to wait to file your bankruptcy case because that way you can collect your cash, spend it down on certain things, and we can talk about that. That’s probably a subject for a different interview.

You can spend it down on things until you know that your assets are within the exemption limit in your state. Then you file bankruptcy, you get to keep all your assets. On the other hand, if you say I’ve got three thousand dollars value in my car and I’ve got stuff in my house which is never worth as much as people think it is. I’ve got some cash in the bank and cash in a savings account and I’m going to get four thousand dollars back from my tax refund and that’s all less than the total amount of exemptions I’m allowed to keep under my state law, then still go ahead and file the bankruptcy now and then you’ll be fine when your tax refund actually comes in.

Every trustee will just hold your case open until you file the tax return. There’s no play in timing the filing of the tax return but there’s a lot of play in timing the filing of the bankruptcy case.

Ron has been on with us before several times and his mission is to help you better understand what your options are. Don’t get yourself all into a jam if you don’t have to. Right Ron?

Because the programs focus on your income to drive what the payment amount is, if you’re not making anything, if you’re making zero dollars, you’re going to pay zero dollars based upon your income. The reason why it’s better to pay zero dollars in an income-based repayment program than zero dollars in forbearance, is that all of the income-based repayment programs have a discharge date built into them. For many, it’s twenty five years, for some, it’s twenty years, for others, if you’re working for a nonprofit or for the government, it’s ten years.

What’s going on is if you’re in forbearance or deferment, you’re not getting the benefit of the time that’s passing … on the discharge schedule. That’s really huge. Now some people will say, “Well, twenty five years, that may as well be another lifetime.” Well, listen, if you’re graduating from college, you’re twenty-four years old, you’re kind of trying to make your way out in the world, twenty five years, you’ll be forty-nine when that’s done. You still got a lot of really great income producing years ahead of you when you’re forty-nine years old.

Don’t kid yourself. There’s a tremendous benefit knowing that when you’re forty-nine, you’re going to be debt-free of your student loans. Like I said, the prospect of twenty five years seems like so long to wait. That’s more a question of the perception of a young person than the reality, which is that twenty five years is okay. You’ll still have plenty of great earning years ahead of you after that.

For my clients, I want them to start that clock ticking on the twenty five years as soon as possible. Let’s say they work as a teacher or a firefighter or they work for Social Security or for the government or something, well, it’s a ten year period. Why go on deferment or forbearance when you could be doing an income-based repayment program? In ten years, you’ll discharge your loans. To me, it’s defeating. It’s self-defeating to do a forbearance or a deferment when you could be ticking that clock away towards the eventual discharge of the debt.

That’s a good use of forbearance or a deferment. I mean, if you’re making fifty thousand dollars a year and you’re paying five hundred dollars a month based upon that salary and all of a sudden you go down to zero for an indefinite period of time, it is going to take a couple of months for the servicer to catch up with your new paperwork. While that servicer is catching up, that’s a good time to go into forbearance or deferment so you’re not still paying the five hundred dollars a month while you have no money coming in.

They only look at the amount you earn and your family size. Now, that opens up a lot of interesting prospects. Let’s say you’re a stay at home mom or a stay at home dad and your spouse is the one that’s out there earning. You’re taking some time off to work inside the home. Well then, for those few years … you could file your taxes married but filing separately and you can pay zero dollars on an income-based repayment program and the clock is ticking towards the twenty five year discharge.

Anyway, you have two hundred and seventy days from the time you stop making a payment and you’re in a delinquency period. During those two hundred and seventy days, they’re not going to garnish your wages. At the end of the two hundred and seventy days, you then go into a default phase and you have another thirty day grace period. At the end of that thirty day grace period, they can begin to administratively garnish your wages. They don’t have to sue you, they don’t have to get a judgment.

All they have to do is … I mean, it’s the United States government. They’re a super creditor, so that’s very powerful. There are ways to get out of that and you need to get out of that in a hurry, but that’s what happens on the federal side. On the private side, it’s like any other kind of a loan, like a credit card loan. The private lender needs to give you notice of your default. They need to file a lawsuit, they need to win the lawsuit, they need to get a judgment, they need to find out where you work, and then they need to garnish your wages. It’s a completely different process in the private side than on the federal side.

I’m not saying that that’s a bad campaign, but for those who don’t have the debt-free schooling under their belt, they have a debt, they have debt-full, they have more options other than pressing the pause button and delaying, delaying. I had no idea about the automatic discharge was built into the loans and I’m sure many of our listeners didn’t know that, either. We’re getting to the end of our time with you. There’s a few things I want you to do because this would raise some more questions than what we shared in this interview today. I want you to tell people how they can get in touch with you because they have other questions, and then I want you to tell them about your book that you have, okay?

I try to focus on the financial aspect. If you don’t want to file bankruptcy and you want to continue to pay the minimums on your credit cards, I totally respect that. I just think that it’s my duty to show you what that choice is costing you in dollars and cents. If after you’re fully informed, you decide you want to continue to do what you’re doing, you know what? Like I said, I respect that and I think you have every right to do that …

It’s the same thing with trying to keep your house. A lot of people … We’re not fully recovered from the housing bust from 2008. People are still living in their over-leveraged house and they’re not building equity. They’re falling behind on their mortgage and they’re trying to work out a payment plan or a loan modification. Giving up the family home is just a huge emotional and psychological thing.

I really … I’m very sympathetic to that. Once again, it’s my job to show you what it’s costing you to make the decision to try to heroically save that home. If after we’ve gone through all those numbers, you decide you want to continue to work to save that home, I’m here to help you try to do that. I do feel I want to clear the veil from the eyes and really look at things clearly. That’s what my book is all about.

Then they say … But the student loans aren’t dis-chargeable in bankruptcy and everybody seems to know that. That the student loans are going to stick to you like glue and everybody puts the student loan piece to the side. They say, “Okay, we’ll deal with the student loan piece separately. Let’s take care of the debts that we can take care of.” I got to ignore the student loans, and that’s not right because all these clients have student loan problems. I want to offer a complete solutions so I’ve started doing student loan resolution.

By the way, people are going to see on Facebook ads that say, “We’ll help you resolve your student loans.” You know what? Maybe they can but if they ask you for your log in and your password for this database, you know that they’re not on the up and up because it’s illegal for anybody to have that information. That’s why what I do is I have my clients go to the website. I give them the site location. They sign up, they register, they get a log in, they get a password and then they print out screen shots of their active loans and they e-mail those to me. With a few other, the information I need to know your family size. I need to know what your income was last year and pretty much that’s the information I need to get started with the analysis.

If you’ve got a car loan or if you’ve got home loan or you get a secured credit card so that you’re making payments, you’ll be able to rehabilitate your credit and you’ll be able to have credit. Just because you default on a student loan when you don’t know better and you’re going through some hard times, doesn’t mean that when you get your act together and you figure out what it is that you need to do, it doesn’t mean that your credit profile is ruined forever. Quite the contrary. If you’re doing the right things, then you can restore your credit.

You go into default on a federal student loan, they can start garnishing your wages right away, a thirty-day notice. No lawsuit required, no service of papers required. They can offset your federal tax returns. They can offset Social Security to settle student loans.