Hello, everyone! Thank you so much for joining us on this needs to be said happy New Year. If this is the first time you are hearing me also this is the first time you’re hearing our friend or attorney Charles Laputka so happy new years from both of us in that respect, but we’re going to get you off started. We are in the first part of the year tax season, we are also in the middle of a pandemic stuff was starting with stopping. What’s no longer working and our friend, attorney Charles Laputka is going to come and talk with us about a couple of a couple of those things today. He told us we’re going to talk about eliminating debt through bankruptcy, which, is something that’s still new to me because my whole purpose in interviewing bankruptcy attorney was because of an experience I had many years ago, not having access to the knowledge of a free evaluation or discount consultation or attorneys being nice and caring.
So my whole goal with having attorneys on the show is to empower you so that you will know what options are out there for you, because I know what it’s like to not have options, or at least feel like you don’t have the same thing not having options. Right Welcome back, Charles, how are you and happy New Year! I am wonderful Katherine happy New Year to you as well. I’m happy to be back on the show in 2022 and to have a conversation with you today and all of our listeners about eliminating debt in 2022 for the New Year. I’m looking forward to what you have to say. And, I’m grateful for you being here. You have no idea. You have no idea how I wish I had access to you, so many years ago. So anyway, I’m gonna shut up about me.
When we talk about eliminating debt, I don’t know how people are looking at that debt. Isn’t always bad, but we definitely know when it’s not good. So when you talk about eliminating debt, because I think somewhere where people work on your credit, they say you have, have a healthy amount of debt they have. So when you talk about eliminating debt, help us with that definition. So we understand where you’re leading us with the term and tell us what you do with. Absolutely! Absolutely! Let’s talk about that a little bit. So you’re a hundred percent correct, when you say that not all debt is bad. What I can tell you is that our country and, anybody that has any money in our country or is successful, generally has some form of debt. Now there’s good debt and there’s bad debt. So a good debt, an example of good debt would be a mortgage on your home, right?
So if you want to buy a house, you go out, you get a mortgage. Most people don’t have a hundred or 200 or $500,000 laying around to buy a house when they’re 28 years old and they want to, you know, move out of their parents’ home or age. So a mortgage is considered good debt, as long as you can make the payments, which hopefully, you know, everybody that’s listening to us can, but a mortgage is good debt. Another type of debt I would say is medium. Debt is a car payment. The reason I say a car payment is medium debt is because a car is a depreciating asset and more often than not, when people borrow money to purchase a car, the car’s value. It quickly becomes less than what they owe, especially if they finance a new vehicle. But the reason that’s medium debt as opposed to mortgage debt is because generally speaking, barring a big recession like we had in 2008, generally speaking a house is an appreciating asset.
Meaning as you pay the mortgage balance down, the house gets more and more valuable as a result of, the, you know, the, increase in demand for housing every year, as more people are looking to buy homes. So, you know the best kind of debt you can have is secured debt against real estate like I said, medium debt would be a car loan because it’s a depreciating asset. But the debt that I’m talking about eliminating is unsecured debt. So unsecured that is, it’s often used incorrectly more often than not. Meaning unsecured debt can be good if you want to borrow money to invest it for a short term. And then you repay it on time. You can use unsecured debt to advance yourself financially. But what usually happens, Katherine, and this is where I’m afraid. A lot of our listeners may be what usually happens is unsecured debt is borrowed to meet a need that a person’s income doesn’t meet.
So for example, that’s a new furnace or, you know, your kid needs braces or something like that. Those are life events that if you have not saved properly for, you may turn to credit to, to solve those problems. And that’s a bad kind of debt, because if you didn’t have the income to deal with the situation that arose, you’re unlikely to have the income to repay the debt. And that’s where people start to get into trouble. And that, you know, that doesn’t even mention people that are just spend thrift. You know, if like, like I always tell people, I understand, and you may or may not be a purse gal, Katherine, but I understand everybody wants that $3,000 purse, but you can’t buy it on credit because if you can’t afford it, you shouldn’t be buying it if you can’t afford to pay cash for it.
Unfortunately there are those people who go out and buy things that they don’t need, and they use unsecured debt on those things. That’s the worst type of situation to be in. But not always that, that’s what I wanted to impress upon you. It’s not always overspending. Sometimes it’s these life’s needs like, you know, you need four new tires when it comes time for inspection for your vehicle and you don’t have the money. What are you going to do Yeah! Yeah. That’s what that’s been my life right there. So I’m not the person who will spend, that much money on something that, like a purse. But I probably would say, you know what, forget about it. I feel stuck. I can’t, and I’ve done this in my life. I was like, well, I don’t have enough money for what I got. I say, at least I can go get myself something pretty.
So I wouldn’t, I’m already in the hole. So my mind was like what’s the worst that could happen. So I don’t go get the $300 purse. I might get a $30 purse, but somehow I’m still, you know, like, I feel like I’m coming up short, but it’s those moments when it’s the furnace or the tires or something that you need that really gets me into a jam because I don’t have the money for the purse and I don’t have the money for the tires cause I kinda feel like I’m putting myself in the same hole. It’s like, should I not spend, even when I need the tires, you know Cause it, it kind of feels like I’m wasting, like I do with the purse, but you’re getting where I’m coming from, like clovers and, seeing bad to me cause I don’t have money for either.
I certainly understand that. And I certainly understand the psychology behind what I think they call retail therapy when you’re feeling depressed and down because you can’t make ends meet sometimes just buying yourself a new $30 purse will make you, it gives you a little bit of a, natural dopamine in your brain to make you feel good for a day. So you realize next month that you have to pay for it and you couldn’t afford it. Yeah. Right! Right! Right! But the majority of the people that I speak with on a daily basis are a combination of those categories. Just like you described Katherine, a combination of folks that maybe have, you know, treated themselves when they couldn’t necessarily afford it.
But also have had those things in life that they need to put on a credit card, like a transmission or a set of tires so that they can keep going to work.
And regardless of what situation you’re in, what I want our listeners to know is that I’m not going to judge you. All I’m going to do is help you look for solutions. So let’s talk about solutions a little bit. There’s no, there’s no judgment. Here you come here. You tell me what your situation is. I’ve I have been doing this for 20 years. It is very, very rarely that I meet with the client and walk out of that meeting and go, wow! I’ve never heard that before. Right, I’ve been doing this for 20 years. I’m not going to say it never happens. But maybe once a year, I turn around and walk out of a meeting and say, dang, I’ve never heard that one before.
So we, you know, basically what we want to do is we just want to look for solutions. And you know, there are, there are a lot of different solutions, right Sometimes you’ve gotten yourself into a, you backed yourself into a quarter with debt and you were out of work for a while, maybe as a result of the pandemic, maybe an injury or an accident, something like that. But now you’ve got a good job on your back to work. You don’t necessarily need to file bankruptcy to get out of a hole. And we know while bankruptcy is an option, sometimes just stepping back and renegotiating your payment terms with your creditors can be a better option if you’ve gotten back on your feet, after an injury or after a pandemic lay off. And now you’re back to work and you’re making good money. And you just feel like you don’t, you know, you want to repay your debts.
I absolutely support that decision as long as you can financially. So in that type of situation, what we do is we sit down and we go over a budget. Katherine, we’ll look at the money you have coming in. We’ll look at the money you have going out for your monthly needs. And if you have a surplus of $500 a month, then we’ll take a look at your debt and say, Hey, how can we spend $500 per month on this debt to get you out of this predicament And if that works great, but what people need to know is if that doesn’t work or you’re not in that situation that I just discussed where you’ve now got a good job again, after a layoff or a shortfall, that’s generally where debt settlement or bankruptcy comes in. So then repayment, like I just described is payments monthly towards an end goal of paying off the credit card or the unsecured debt, a debt settlement is a lump sum.
And this is actually really important right now because it is tax season, right, a lot of people get a large tax refund. And if you have one or two debts, sometimes you can make a lump sum payment on those and settle the debt for less than you owe. For example, if you owed discover card $3,000 and you get a tax refund, you might be able to send them, we might be able to negotiate sending them a check for 1500 bucks, half of what you owe and call it even. So that’s settlement. And then, you know, if that doesn’t work, then we can always fall back on the bankruptcy court and use your rights under federal bankruptcy law to either force a repayment plan or to eliminate the debt altogether. So the good news is there are lots of options and I really appreciate you giving me the time today to talk about the different kinds of debt and solutions that are possible.
No, it definitely helps open up my mind. And I put myself constantly back in that place when I didn’t have access to you. And for those who are loosening, I understand where you could possibly be. Because sometimes when I would hear someone say to me, you’re wasting money and I’m thinking I’m smacking my head against the wall. I’m not wasting money. I don’t have enough money. Something came up and I couldn’t afford it. And you know, and you, you beat yourself up. So I’m grateful for this time where you understand I’m not our website, which is www. Laputkalaw.com. L A P U T K A L a w.com. And we even have a self- scheduling tool on our website so that if you’re doing this, you know, you’re staying up late at night and you just want to jump in and schedule an appointment right away. You can do that live on our website, 24 hours a day until next time you have a super day. Charles, thank you so much. Thank you.