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Divorce and Bankruptcy – an Unhealthy Relationship

By Jonathan on February 5, 2010

There are many reasons that bankruptcy filing rates are so high. Clearly an unexpected job loss or reduction in earnings can lead many honest, hardworking people into a bankruptcy lawyer’s office. When a job loss is coupled with a divorce, I think that the likelihood of bankruptcy by husband or wife goes up exponentially.

I recently read a column written by attorney John Mayoue, a divorce lawyer here in Atlanta who is known for his representation of celebrities and other high profile clients. John notes that in the domestic relations legal community, Atlanta is known as the “divorce belt.” In the bankruptcy lawyer community, Atlanta is known for having one of the highest bankruptcy filing rates per capita. I do not think that this is a coincidence.

Just as an ethical bankruptcy lawyer will advise you to search for alternatives to Chapter 7 or Chapter 13, a thoughtful family law attorney will advise you to search for alternatives to divorce. Bankruptcy or divorce may be inevitable, but when you seek legal counsel, look for a lawyer who does not offer “one size fits all” solutions and recommends alternatives – this would be a good sign that you are talking with a lawyer who has your best interests at heart.

John was gracious enough to give me permission to reprint his thoughtful article about why couples struggling in their marriages ought to consider alternatives to divorce. I recommend that you take his message to heart.

Divorce Lawyer John Mayoue Offers Advice to Couples Contemplating Divorce

The divorce rates in the United States are some of the highest in the world. Increased financial pressure brought on by the current economy is fueling the fire for marriages already in jeopardy, and the rapidly increasing number of home foreclosures further demonstrates the severe consequences these pressures can produce.

According to Atlanta, Georgia based divorce attorney John C. Mayoue, who has been counseling couples through divorce cases for more than thirty years, the approaching holiday season will cause these numbers to spike further and will also be a busy time for lawyers specializing in divorce cases, as the holiday season often proves to be a breaking point for marriages in crisis.

“During the holidays, people’s pent-up thoughts about relationships and careers and where they are with life become intensified,” Mayoue says. “In December, for example, we have the highest number of suicides, divorce filings and bankruptcies of any month. It’s just a very difficult time for people.”

Although our society makes divorce seem to be an easy and acceptable way out for couples who aren’t quite happy in their situation, Mayoue cautions couples not to be too hasty to start the divorce process. Divorces that make it to trial are painful and embarrassing, and the results are often not fair for both parties involved. If you are considering divorce, Mayoue suggest taking the following steps first.

1. Try to work out your differences

Ask yourself why you want a divorce. Are you just responding to life’s pressures? Are you looking for a way out of a stressful situation and not just your marriage? Or do you have legitimate concerns that are truly irreconcilable? [Read more…] about Divorce and Bankruptcy – an Unhealthy Relationship

The “Do It Yourself Bailout” – Part Six of Jonathan’s Interview with Kenny Golde

By Jonathan on February 4, 2010

Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed Kenny Golde, a self employed filmmaker who found himself almost a quarter of a million dollars in debt when when a business deal fell victim to the economic downturn. Using negotiation techniques he developed (and has subsequently written about in a book), Kenny has managed to eliminate more than half of this debt through negotiation. Here is part six of our conversation – it lasts about 4 minutes. This is the last segment of this interview – parts 1 through 5 may be found in the five posts immediately preceding this one. In this segment, Kenny and I talk about the tax consequences of debt forgiveness and the insolvency rule that eliminates tax liability for most people.

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Link to IRS Form 982 – used to declare forgiven debt as non-taxable

Link to Kenny Golde’s book “The Do It Yourself Bailout.”

The “Do It Yourself Bailout” – Part Five of Jonathan’s Interview with Kenny Golde

By Jonathan on February 3, 2010

Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed Kenny Golde, a self employed filmmaker who found himself almost a quarter of a million dollars in debt when when a business deal fell victim to the economic downturn. Using negotiation techniques he developed (and has subsequently written about in a book), Kenny has managed to eliminate more than half of this debt through negotiation. Here is part five of our conversation – it lasts about 7 minutes. In this segment, Kenny notes that most lenders will not consider negotiation with you until you are 90 days late. He also talks about credit scores – and why this number is less important than most people think. Part 6 – the final segment – will be posted tomorrow.

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Link to Kenny Golde’s book “The Do It Yourself Bailout.”

The “Do It Yourself Bailout” – Part Four of Jonathan’s Interview with Kenny Golde

By Jonathan on February 2, 2010

Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed Kenny Golde, who found himself with $250,000 of credit card debt and no way to pay it all back. However, with tenacity and focus, Kenny has managed to eliminate more than half of this debt through negotiation. Here is part four of our conversation – it lasts about 8 minutes. We discuss the procedure for entering into a written settlement agreement with your creditor and the steps you must take to ensure that your settlement is honored by the creditor or collection agency. Part 5 will be posted tomorrow.

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Link to Kenny Golde’s book “The Do It Yourself Bailout.”

The “Do It Yourself Bailout” – Part Three of Jonathan’s Interview with Kenny Golde

By Jonathan on February 1, 2010

Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed someone who started with $250,000 of credit card debt and with tenacity and focus, has managed to eliminate more than half of this debt through negotiation. Here is part three of my conversation – it lasts about 8 minutes. Kenny points out that there is nothing morally wrong with settling debt. He explains that the term “charged off debt” means nothing – it usually just means that the creditor has sold its debt to a debt buyer. He points out that many collection agencies buy debt for 5 to 10 cents on the dollar, which is why they would be willing to settle for 50 cents on the dollar or less. Finally Kenny notes that any debt settlement should be in writing and that you should never send any money without a written agreement. Part 4 will be posted tomorrow.

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Link to Kenny Golde’s book “The Do It Yourself Bailout.”

The Do It Yourself Bailout – Part Two of Jonathan’s Interview with Kenny Golde

By Jonathan on January 31, 2010

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Link to Kenny Golde’s book “The Do It Yourself Bailout.”