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Do you have a plan as you wonder through your life?  If not, why not?  It is okay if your plan is to live each day to its fullest or to plan each new stage of your life over several years.  The important point is that you do not let life and those around you dictate your future.  The following is a perfect summary of how I live my life:

Thank you to my daughter, Threse Mitchell, for sharing this note (no her name is not misspelled).  My prayer for each of you is to live your life following these ideals.

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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article.  Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*

The post How Do You Choose to Live Your Life? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.

By Judith Ohikuare

In ye olden days, people were routinely tossed into debtors' prisons for bills in arrears. And, just this month, the ACLU charged that private debt collectors around the country have manipulated local courts and prosecutors' offices to resurrect the practice today. The shame that comes with being unable to pay a bill can be bad enough without the stress of being locked up for it. If you've been contacted by a creditor or collector, the first thing to do is to not freak out. You're not alone: Last year, the Consumer Financial Protection Bureau (CFPB) found that one-in-three people with a credit record had been contacted by a creditor or collector. Here are a few things to know if you're facing this issue and are wondering where to start.What Does It Mean When A Bill Goes Into Collections?The most basic thing to know about a collector is that they're calling to ask you to pay a bill. Debts that a collector may seek can include loans (such as a car loan or student loan), and past-due bills, such as a doctor's bill or a phone bill. "When you haven’t paid a bill for a certain amount of time, typically a few months, that service provider can send your account to a third party that deals with the effort of getting that debt from you," explains Lisa Rowan a lifestyle and personal finance expert at The Penny Hoarder. "That outside company is a collections agency that specializes in getting people to pay their bills, and they can often be aggressive." Some laws have been established to prevent debt collectors from harassing people who owe money, so don't feel like you have to be silent about shady tactics. "Don't panic!" Rowan advises. "Yes, they want your money, but debt collectors are not permitted to harass you or even call you outside of reasonable hours of the day. Before you respond to a late notice or call from a collector, go through your files (contracts, bills, estimates) and make sure you are informed about your situation. Think about some options, whether it be a payment plan or a lump-sum negotiation offer, before you call back or respond by mail." She also advises tamping down on worst-case scenarios by talking to a trusted friend or family member who can help you look over any paperwork with you, or sit in on a phone call.Is There Any Recourse Before A Bill Goes Into Collections?Contact your service provider (a doctor’s office, for example) directly instead of waiting for the bill to get sent to collections as many companies will offer payment plans, Rowan advises. If you're unable or too freaked out to make a plan with the company, commit to making one yourself. "Partial payments won't stop the overdue notices from coming, but showing progress on your balance can prevent your bill from going to collections," she adds. Once you get going, you might help your case by taking a deep breath and calling or writing to the company to let them know you are making progress and will keep doing so until you're back in the black.What Is The Potential Impact Of A Bill Going Into Collections?Debt collectors can report your unpaid debt to the major credit bureaus, who mark them on your report as delinquencies. Rowan says an unpaid bill can affect your credit score for up to seven years.  That's a long time — but it's not forever. Remember that an important factor of determining your credit score is your credit saturation limit: the ratio of total available credit you have to the amount you use. That ratio is ideally 30% or less. When you pay off debt — whether it's in collections or not, Rowan says — you are actively reducing that utilization rate. So focus on knocking out as much as you can, as soon as you can. "When that negative mark finally comes off your credit report, you’ll likely see an increase of about 14 points on your credit score, according to a study FICO conducted on its own data," Rowan says.Can You Ever Challenge Or Negotiate A Claim? You'll have more success doing so if you keep track of your paperwork. Before you speak to someone to set things straight, gather any records of what you spent and what you owe, Rowan says. Doing so will make it easier to avoid being steamrolled over the phone. "It's easy to get overwhelmed, but having whatever information handy can help you keep your cool and know where you stand," she explains. "So don’t throw out past-due bills, even if you know you can’t pay them right now. You need to be aware of the original charges and any late fees." If you're seeking a payment plan, be realistic rather than appeasing, she adds. Don't succumb to pressure to pay everything upfront if you simply can't and keep in mind what you can really afford to pay. "There may be fees for breaking the bill up into parts or accruing interest you'll need to keep in mind. For instance, if a bill collector wants you to pay $200 per month when you know you can only send in $150 per month reliably, tell them that," she says. "They'd rather get a smaller amount of money on a regular basis than have you flake on a payment plan." Finally, Rowan adds, you may also be able to drive a hard bargain by paying a large fraction of the full sum upfront in exchange for the full cost being forgiven. For example, if you owe $1,500 on a late bill but have $1,000 in your savings account, you can inquire about paying them that money on the terms that the bill goes away forever. "Ask about it," she urges. "They just might accept the offer. A business would rather wait a little while and get all the money it's owed" — you choosing to work out a payment plan directly with them, for example — "but the debt collection game is about making as much money as quickly as possible. A collector may take a smaller amount in exchange for being able to mark your name off the list." If they accept your terms, pat yourself on the back — and make sure to get whatever agreement you make in writing. © 2018 Refinery29

Life in the Sweatbox
(reprinted from Credit Slips)

Pamela Foohey, Indiana University Maurer School of Law
Robert M. Lawless, University of Illinois College of Law
Katherine M. Porter,  University of California – Irvine School of Law
Deborah Thorne,  University of Idaho

Date Written: February 20, 2018  94 Notre Dame Law Review __ (forthcoming 2018)

Abstract
The time before a person files bankruptcy is sometimes called the financial “sweatbox.” Using original data from the Consumer Bankruptcy Project, we find that people are living longer in the sweatbox before filing bankruptcy than they have in the past. We also describe the depletion of wealth and well-being that defines people’s time in the sweatbox. For those people who struggle for more than two years before filing bankruptcy—the “long strugglers”—their time in the sweatbox is particularly damaging.
During their years in the sweatbox, long strugglers deal with persistent collection calls, go without healthcare, food, and utilities, lose homes and other property, and yet remain ashamed of needing to file.
Strugglers: those who need help, but afraid to ask
For these people in particular, though time in the sweatbox undermines their ability to realize bankruptcy’s “fresh start,” they do not file until long after the benefits outweigh the costs. This Article’s findings challenge longstanding narratives about who files bankruptcy and why. These narratives underlie our laws, influence how judges rule in individual cases, and affect how attorneys interact with their clients.
Read article….

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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article.  Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*

The post “Life in the Sweatbox” for Strugglers: appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.

By Andrew Kreighbaum The Department of Education signaled Monday that it is interested in tweaking the standards used for determining whether student loan debt can be discharged in bankruptcy.

That could point to an opening for potential bipartisan cooperation between the department and Democrats like Senator Elizabeth Warren, who have long sought to loosen bankruptcy law so student borrowers can discharge their debt.

However, what steps the department might take in that regard, including issuing new guidance or working with Congress to change the law, are unclear.

In a Federal Register notice, it requested public comments on the process for evaluating claims of “undue hardship” -- the standard student borrowers must clear to be able to discharge their loans through bankruptcy.

An Education Department spokeswoman said the notice should speak for itself. The document doesn’t indicate the steps the department may take, but consumer groups that work on student loans and bankruptcy issues said it would be hard to narrow the current standards.

Getting student loans discharged through bankruptcy is notoriously difficult. A 2005 federal law barred most student loan borrowers from that option unless they could demonstrate that they would suffer undue hardship from being forced to pay the loans.

Congress, however, has never defined what undue hardship means and didn’t delegate to the department the ability to do so. That’s left it to the courts to establish their own standards.

But debt holders and Department of Education contractors have often sought to aggressively block those undue hardship claims via litigation.

“It’s a very difficult hurdle for most consumers,” said John Rao, an attorney with the National Consumer Law Center and an expert on bankruptcy issues.

In 2014, the obstacles created by contractors prompted congressional Democrats, including Warren, to write to then education secretary Arne Duncan urging new federal guidance that would make clear specific minimum criteria for an undue hardship claim.

Among those criteria, the Democrats wrote that receiving disability benefits under the Social Security Act or being determined to be unemployable because of a service-connected disability should qualify a borrower as having an undue hardship. Contractors should accept proof of those or other criteria from a borrower without a formal litigation discovery process, the Democrats said.

The guidance released by the department the following year disappointed many Democrats and consumer advocates.

Clare McCann, deputy director of higher education policy at New America and a former Obama Education Department official, said the department’s call for comments appears to signal that it wants to broaden the definition of undue hardship. She said whatever change the department or Congress makes will have to strike the proper balance.

“You want to make sure it captures people who aren’t able to pay and won’t be able to pay over the long run, so you’re not wasting energy collecting debts you’ll never be able to collect on,” she said of the standards.

Opening up bankruptcy standards too wide, McCann said, could mean the federal student loan program becomes much more costly.

A report this month from the Department of Education’s inspector general found that the popularity of income-driven repayment plans and loan forgiveness programs could mean the federal government soon starts losing money on the student loan program.

But Rao said only a small percentage of consumer borrowers file for bankruptcy now.

“These are individuals who have some kind of hardship that is lasting, or they’re in a position where maybe they went to college and never got a degree,” he said. “In the case of some borrowers, they’re just not going to be able to repay the loan.”

Jason Delisle, a resident fellow at the American Enterprise Institute, said after the addition of multiple income-driven repayment programs for student loans since 2005, there is less of a case to be made for widening bankruptcy standards for federal student loans than for private loans.

“There are costs that go well beyond discharging loans for people who can’t pay,” he said. “There are also costs to discharge loans for people who can pay.”
 Copyright 2018 Inside Higher Ed.  All rights reserved.