Three Things I've Learned

My wife challenged me to come up with a list 3 things that I have learned from my profession that everyone should know.  Although bankruptcy is my primary area of practice, I have been fortunate in my career to have had broad exposure to many areas of law.  I have the advantage of learning from my own mistakes as well as the mistakes of others and getting paid to help others fix those mistakes.

But if I had the opportunity to share 3 things with someone about my profession and only those 3 things, here is what I would tell them:

• Estate Planning.  At a bare minimum, everybody should at least have a will, a power of attorney for health care and a financial power of attorney.  Some people need advanced estate planning like a living trust to avoid unnecessary taxes.  But estate planning is more than trusts and wills.  Does your family know your burial wishes?  Who will handle your financial and medical decisions when you cannot?  Who would get custody of your children?  Why would you even burden your family with these decisions when you can decide those issues now? 

• Proper Budgeting and Financial Planning.  In my experience, most of my clients really have no idea how much money they actually spend on even the most basic of necessities such as food and clothing.  If you can become the master of what you spend, then you can plan properly to save for retirement, vacation and unexpected surprises.

• Having the Proper Insurance.  You can rarely go wrong with having more insurance.  You should have life insurance to provide for your family if you are suddenly gone.  You should have health insurance to prevent catastrophic medicals bills.  You should have homeowner’s or renter’s insurance to protect your belongings as well as car insurance that does more than meet the statutory minimum policies set forth in the law.  I once handled a case where a young driver caused an accident which caused the victim to have $250,000 in medical bills and he only had $15,000 in coverage.  That month, I increased my own liability coverage by 500% and added a $1 million umbrella policy.  The total bill for this additional coverage was only an extra $50 per month.

Perhaps the best piece of advice I can give it regarding your legal needs is that you should try not to do it alone.  A piece of software cannot replace personal service or years of experience that a licensed professional offers.  Trying to handle your own legal matters without assistance is a bit like trying to perform surgery on yourself without the help of a doctor.  Things can go very badly if you make a mistake and there usually is not a second chance to correct it.

If you are in Southern California and are experiencing debt problems or need guidance in a legal issue, please call me at (619) 448-2129.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar, the San Diego County Bar Association and the National Association of Consumer Bankruptcy Attorneys. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Maybe It Is Time To Let This House Go

As a bankruptcy attorney, I find that one of biggest concerns that debtors have is about their assets: "Can I keep my house?" "Can I keep my car?". In most cases, I can give my clients a clear idea of what property they can keep and what they may need to sacrifice in a bankruptcy proceeding. However, a more difficult question is whether the debtor should keep the property.

Although it is widely believed that home ownership is more beneficial than renting, this is not always true. The debtor must ultimately look at both the financial and the emotional factors to decide if a home is worth keeping.

On the financial side, home ownership usually is more financially beneficial then renting. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. However, the financial benefits start to disappear if the debtor owes more than the house is worth. Renters also do not pay property taxes or home maintenance, but they do have the risk of higher rent payments at the end of their lease.

Even with a house that is upside down, there are emotional considerations that go beyond the savings a renter might realize: (1) pride of ownership; (2) stability; and (3) quality of life. A family with young children that has lived in the same neighborhood for 10 years may have more of an emotional attachment to the home than a couple whose children have all grown and moved out or a family with children too young to have memories of the house.

If you are considering bankruptcy, you need to look at all of the financial and emotional factors together. Owning a home can be a rewarding experience but it can also be a financial millstone that is keeping you from getting a fresh start.

If you are in Southern California and are struggling with home ownership and heavy debt burdens, call me today (619) 448-2129 for a free consultation and a caring voice.

If you are in Southern California and are struggling with home ownership and heavy burdens, call me today (619) 448-2129 for a free consultation and a caring voice.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar, the San Diego County Bar Association and the National Association of Consumer Bankruptcy Attorneys. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.