I was recently retained by a client who – like many people struggling nowadays – tried to tackle their mounting financial problems by going to a debt settlement company. I’ve said it once, and I’ll say it again: debt settlement companies are a rip-off. The proof is in how empty my client’s wallet is now, and where my client is now.
Posts Tagged ‘Pre Bankruptcy Planning and Strategy’
Staying Out of the Valley of Disappointment
Tuesday, August 17th, 2010
Some Massachusetts homeowners have this peculiar belief that a homestead declaration is the legal equivalent of a real Chinese fire wall (i.e., with flames). That it keeps creditors at bay, allowing you to live in bliss in your home until you die or get sick of it and want to move on to a greener patch of grass. That’s not entirely the case. Not all debts are covered and not all creditors can be kept at bay. If you’re up to your eyeballs in debt, relying on the Homestead Declaration and only on the Homestead Declaration to keep your home from creditors will lead you to an unhappy and mythical place I call the Valley of Disappointment.
I came up with the Valley of Disappointment because I thought it seemed like a humourous metaphor But then, just to be safe, I did a websearch and just want to caution my readers not to confuse my mythical and metaphorical Valley of Disappointment, with Disappointment Valley which is: (1) a real valley located in Colorado; as well as (2) a documentary which according to IMDb “examines the plight of America’s wild horses and the rapidly deteriorating condition of our wild Public Lands.” Any similarity between my imaginary Valley and the real thing or the movie is totally unintentional and accidental…and kind of scary.
I envision the Valley of Disappointment as a place where none of the stores are open when you need them to be, and those that are all have the products you don’t want at prices you can afford, and products you need at prices that shock the conscience. I envision it as a place where the traffic lights stay green for only three seconds before they jump to red, where they stay for 3 minutes. It’s a place where things just don’t go your way, and you feel pretty powerless to do anything about it. It’s generally always cloudy or rainy. The street signs are all confusing, and it can be tough to navigate your way through it or out of it. Sometimes you just don’t know how you got there. Other times you do, and that knowledge can sometimes make it all worse. But enough about what I envision about the Valley of Disappoitment… I was talking about Homestead rights:
If Only You Knew…
Wednesday, August 12th, 2009
Let’s assume that you work for a company and things are not going well. You start negotiating a severance. Does the employer have an obligation to share with you its intention to seek bankruptcy protection? Maybe. If you ask. But what if you don’t ask? What if they don’t tell? What if perhaps, you really should have assumed that bankruptcy was an option that might be considered even though it’s not mentioned at all during the negotiations? These issues were faced by the 7th Circuit in the case of Smith v. Duffy, decided on August 3. They answered the questions but rather than discuss them, I’ve posted the Court’s decision here.
I will share one thought. The case discusses, among other things, the duty of candor that parties owe each other – and uses the attorney-client relationship as an illustration of when that duty of candor not only arises, but is expected. But it also does so by reminding us when that duty of candor simply doesn’t exist.
The case of a special relationship, such as the lawyer’s fiduciary obligation to his client, is really just a special case of the general proposition that context can create a duty of candor. The lawyer’s specialized knowledge invites the client to repose trust in what the lawyer tells him, and the client’s expectation would be shattered if the lawyer could be uncandid with impunity, as is normal in arm’s length dealings between buyers and sellers.
I encourage you to read this case, and put yourself in the shoes of the now very disgruntled employee. Ask yourself – when entering into an arm’s length negotiation, are you equipped to handle the negotiations yourself? Or might you find a benefit by having someone by your side who has a legal duty to be candid with you. Perhaps better said – are you better off being told what you want to hear? Or are you better off hearing what you need to know?
Read the case and think about that the next time you think about buying a home, or refinancing or modifying your real estate mortgage. And most definitely think about it if your boss calls you into your office and wants to discuss your departure from the company.