And you’ll tell me how to share it on my side. You can take it from my Facebook page and share it from there. Cause I don’t, I’m not attached to your Facebook page. Gotcha. Okay.

All right. We’ll do that. I don’t want to minimize or we are there enough and I believe we should be up and we are. Yep. So one second more

So to do the share on Facebook and get it live on my page. Do I just share it right away

You could do that. You could start a watch party. You could share to group as well. Okay.

How do you

Do that What’s the best way to

Do it. If you’re watching

Through Facebook cap on the screen

Co where you can type in comments at the bottom share is all the way to the left.

Right. Lots of sharing, lots of sharing. And we go,

Well, ladies and gentlemen, as you always get to do at the very beginning of the show, you get to watch a bit of a production meeting as my guests and I get ourselves straightened out. And as I get all of my sharing done on Facebook, time is about five Oh four on Sunday, May 24th. He said probably yes, the 24th coming to you live from my very humble second bedroom makeshift studio in the wonderful, wonderful SOCAN Valley. Part of the Lehigh Valley in the Commonwealth of Pennsylvania in these United States on planet earth. The only one we have third rock from the sun and the Terran solar system. Welcome to the Kennedy effect, homepage that other side of information and share throughout various Facebook pages throughout the Facebook realm. My guest this week is my bankruptcy attorney and my increasingly better, better friend as we work through this process, Mr.

Charles Charles is a bankruptcy attorney, as I said, and has also written two books, one in 2016 called the road to freedom from debt and one in 2017 called rebuilding your life after bankruptcy. I want to thank everybody. Who’s here. Who’s watching on any page where you may be watching. Thank you. Thank you. Thank you. You are welcome here. We’re glad that you’re here. I, we’ll see your comments at the home page, that other side of information, I don’t care where you’re watching. We’re just thrilled to have you here. We’re glad you’re part of the program and part of the family, but it is only on the home page, that other side of information where I will see your questions and comments as always your questions and comments are welcome. I will be feeding them through to Charles as I have yet to figure out the phone thing. We’re still working on that waiting some equipment to be shipped. so welcome to everybody, Charles. Welcome. Thank you for being here. We’ve been working on this for a couple of weeks. I finally got ya. You lucky dog. You thank you for being here.

You’re very welcome. Thank you for having me,

Charles. You’ve been, you’ve been gracious enough to watch some of the shows from the past. So you have a bit of an idea how this works. you were kind enough to send me a very complete bio, nobody tunes in to hear me read. So let me hear from you. Tell me about you, not your, not just your, how you got well, I mean, how, how you got to where you are, how did you decide to become an attorney, especially in this, discipline of being an attorney, a bit of your personal story. How did you end up in Allentown Just tell me who Charles is before we get into the, the heavy dirt of bankruptcy.

All right. My pleasure. Absolutely. So, essentially I was born and raised in Hazleton, Pennsylvania, which is about an hour North or so of Allentown. and then I went to the university of Pittsburgh when I graduated from high school and I was there for four years earning my undergraduate degree. And then I evaluated my options after college and decided that law school was the option that best suited me. So I moved down the street from the university of Pittsburgh to Duquesne university, school of law, about two miles down the street, downtown Pittsburgh. And I studied there for three years. And my work history was kind of interesting during this period. When I went, when I was at the university of Pittsburgh, I was working for Mellon bank, which then became citizens. it was in the collection department, handling repossessions, taking payments over the phone, those, those sorts of things.

And then I to quit that job, it was a great job, helped me, you know, get my way through college, but then to go to law school, they made you quit your job because they wanted you to focus on your schooling and being an attorney, all of those things. So a couple months after starting law school, I realized that I did have a little bit of free time during the day. And I was broke now because I was used to working in the past. So I went to the job board at Duquesne university and I got a job with a consumer bankruptcy practice. So once I had that job with the consumer bankruptcy practice, I saw the other side of working for the banks in the finance industry. I saw the consumer, the debtor side, and I really enjoyed it. So I stayed there for a few years. And then I got a, you know, the proverbial offer. You can’t refuse to come back East and head home to the Allentown Lehigh Valley area, where I had some family that had migrated South from Hazelton. And I started working for a large creditor law firm here, doing 95% creditor work in the Lehigh Valley for a bunch of small banks. one of them used to be known as, Knb T it was a national, national pen before that. And essentially, I didn’t love it.

It’s hard to believe, Charles, are you trying to tell me that banks sometimes merge

Yes. As a matter of fact, when I represented that bank, I think in the time that I represented that particular bank, it was a, a four, four and a half year span. And I think it was three different things. Then it’s been four different things since,

Sorry, I interrupted you, but I just,

No, no, that’s okay because it’s a hundred percent. So, you know, in the time that I worked for Mellon bank in Pittsburgh and then became citizens, so, you know, always ever changing and merging, banks. So, after that, I, I really, after seeing the consumer side during law school and shortly thereafter, and then going back to the bank side, I just couldn’t take it. It wasn’t for me, it’s not my personality. You know, helping people is my personality and taking their vehicles and foreclosing on their homes while I understand to a certain extent, that’s a fact of life. It just wasn’t for me. So when the economy, I was pretty fortunate to time my exit from the bank side of bankruptcy, in 2008. So little did I know right before the, the economy collapsed in 2008, I hung out my shingle here in downtown Allentown on Walnut street.

And about a month later, the economy collapsed and it happened to really give me a good springboard to get my practice going. and, and I’ve helped a lot of people and been doing it ever since I was on Walnut street for about two years until I was able to get myself established enough to purchase a building on Hamilton, where my office is now, we’re on 13th Hamilton, a couple blocks down from St Luke’s and I’ve been in this location for about 10 and a half years. So still, mostly representing, I don’t represent any banks anymore. I do represent some private creditors, meaning folks that lend money to other folks to buy homes or finance their businesses or something like that. But my practice is 95% consumer based at this point. And I just love, you know, I love helping people when they need help, figuring out a way to help them get out of debt. Know a lot of what I do is bankruptcy, but there are also a lot of bankruptcy alternatives. There are other ways for some people,

Well, we’ll get to that. We have plenty of time and it is, it is a, an unpleasant subject, but it is a fact of our society. Your services are needed and necessary. the obvious answer would be because you live there, but why Allentown

Oh, so, I’ll tell you, I, when I was in Pittsburgh, I love Pittsburgh. I was there for just about 10 years. Love, love, love the small town feel of Pittsburgh. but I really felt like it was on an Island like Pittsburgh. And my opinion may have, well, may as well have been Idaho because to get anywhere of any relevance to me was at least a five-hour drive. So when my wife and I met my wife in Pittsburgh, we have three children. I don’t want to leave them out. so about that later dad. Yeah. So I have, I have a wife and three kids. We had one in Pittsburgh and the three of us moved here and we had two more. but essentially I really liked the beach and to get to a beach that is not Lake Erie from Pittsburgh is seven hours.

Right So you can’t go for the day. You really can’t go for the weekend. So I got this job offer, at the creditor from here and now in town, they were, they were missing a bankruptcy attorney. There was one that had retired and there was really only one for the firm. And my aunt was an employee there. And she said, Hey, did you ever think about moving home back East And I said, well, you know, if, if you’re offering, maybe it’s something we can work out. So that’s what persuaded me to come here, because I think the Lehigh Valley gives you and even more so today than 15 years ago, the Lehigh Valley gives you that small town feel. But if you want to do things like go to Philadelphia or go to New York or go to the beach, you’re anywhere between 50 minutes and two hours from pretty much anything that I wanted to do in life.

So you don’t have the traffic of a big city, unless you, unless you’re unfortunate and have to commute on 22 or 78, but I don’t, you don’t have the traffic, but you have the Lehigh Valley Phantoms. You have the giants, the Eagles, you know, any of the, of the, I’m not a flyers fan, I’m still a penguins fan, but I do like the fandoms. but you have everything that you could want in the Lehigh Valley. And it’s a great place to raise a family. my kids are in the park Parkland school district, great school district, little crowded, but great school district. it’s a great mix of city and country. You know, you don’t have to go too far, to milk a cow. If that’s the kind of thing you’re into or the mountains, don’t forget the Poconos. Well, that’s where I’m from, I’m from the Poconos. So I grew up there. So it’s not as attractive to me as it should be because I spent the first 20 years of my life there. And I think as I, as I come to get a little bit older, I understand that anytime somebody, wherever you’re born and raised is not necessarily the coolest thing. So if you were born and raised on a Lake, when you’re in your forties, you probably don’t want to live on a Lake. Cause you already did that for 20 years.

So I did half my life on the Eastern half of Jersey and in Sussex and Morris County. So, you know how many times I went to see the statue of Liberty, right I’d never see it again. It’s the same thing. I never went once. I do miss the ease of popping into Midtown Manhattan and all that and the park and the village that I will send it to you.

One of the beautiful things about Allentown, because it’s only an hour and a half, okay.

You may have said this. I want to, one of the things that a regular viewers and listeners to the show will know is that I will break the fourth wall. this is not, you know, this is not a college course. I do. I do hope that people take things away every single week and learn something. And I have no doubt that they will learn quite a bit, from our conversation here today, but I’m not afraid to break the fourth wall. as you were going through your history, I’m trying to communicate with the folks, over here on Facebook at the same time, there is a, about a 20 to 32nd delay from where you and I are saying to what shows up on Facebook, but that is where I can communicate with them. So forgive me if I missed this part. Why bankruptcy law

Oh, so, it is,

Well, I stumped you please. Don’t tell me I’m stuck, Joe.

The answer is, what I’m about to say may offend some and may not offend some, I guess it depends what side of, any particular aisle you’re on. But one of the things that I love about bankruptcy law, I kind of stumbled on it based upon the fact that just to out of nowhere, I got into the banking industry in the collections department. So once you get experience doing something for a number of years, if you enjoy at least part of it, you kind of gravitate towards that, right When you’re, you know, for example, when you’re 22 years old, do you know what you want to be when you’re 40 Maybe some people do, but I sure didn’t, but I got banking experience because I got that job, which, you know, this is the nineties when, when you’re, when you’re in the nineties and you’re 19 years old and you get a job making 12 bucks an hour part-time that was a big deal back in the nineties. It’s still a big deal for a lot of people today.

Sadly. Yeah, we can, we can, we can get into how the minimum wage is not kept track with, with many indicators.

Yeah, I got part-time bank money. When I was in college, I was working, I was working 20 hours a week making over 200 bucks a week as a college student. Like you really couldn’t beat that. So I got one. And then once I got that experience, it just seemed like the doors kept opening for me. And when I got to the consumer side of bankruptcy in law school, I really started to enjoy the fact that I’m very mechanically minded, right. And bankruptcy is like a puzzle. And I’m sure that’s something that we’ll talk about a little bit later too. But bankruptcy is very much like a puzzle. Like one of my hobbies is engines. I’m very, you know, whether it’s a weed Wacker that I have to repair, you know, most people that go to start their weed Wacker on a Saturday. And if it doesn’t start, that makes them angry for me.

That’s great. Because now, instead of using the weed Wacker, I get to go into my garage and mess with the motor, right Cause I’m mechanically minded because you can fix something. So as part of being a, a consumer-based bankruptcy attorney, people could come to me with their financial problems. I could work the puzzle pieces and manipulate what I needed to do, twist everything around and I could solve a problem, right When I became a lawyer and you learn about things like divorce. So a divorce case is the farthest thing from mechanical as possible because there’s so much emotion involved, even just regular litigation. Even, you know, if it’s, whether it’s a husband and wife, divorcing, husband and husband, wife, and wife, whatever, or like a business splitting, all of those things are emotionally driven and bankruptcy is like a puzzle. It’s a numbers game.

And the best part is, and this is where I was saying, you, you know, you may stand divided depending on what side you think about this. But I see bankruptcy as not penalizing the banks while still helping my client. Right So when you’re fighting two people against each other, somebody’s always got to lose with bankruptcy. Guess who always loses it’s Amex, it’s discover card it’s Citibank. And in my opinion, the system has bankruptcy built in for better or worse. I’m not making a judgment, but let, let’s talk about the reason that people get credit cards with 29 and 31% interest rates are because the banks know exactly what percentage of people will default. And they know if they charge people 29 and 31%, no matter who defaults, they’re always going to cover. Right. So when was the last time that you saw a bank go under The answer is when the economy collapsed in 2008, but then they got, but then they got bailed out for the machines.

They never got the full opportunity. If that’s the right word, even to go under, because Paulson put them in a room and said this, you you’re buy that failing bank and you you’re gonna buy that failing bank and you you’re gonna buy that failing bank. So we never let, as a, as a, a person coming from the progressive new deal, democratic side of things, which is also something you and I have talked about in the past. one of the great arguments we love to hear from the right is it let the, let the free market decide, let the free market, let capitalism take its course, let the free market decide. We can’t subsidize green energy because that’s picking winners and losers, except that we subsidize the fossil fuel industry inside the Commonwealth over $3 billion a year. So that to me sounds like picking winners and losers. So when you say that those banks were going to fail, they never really had the chance to fail because they were absorbed by other banks. And instead of having eight big banks controlling, you’ll correct me probably, I want to say anywhere from two thirds to three quarters of all, all money in the country, privately held money, you know, savings, accounts, checking accounts, and so on. now it’s about five of those banks, I believe that are remaining.

That sounds about right.

That’s not exactly the free market.

No. And that’s why, you know where I’m saying, this might be a very, microeconomic view of this. But when I say that there’s no victim in bankruptcy, obviously that’s a broad generalization, right Because if I borrow money from you, Jeff and I filed bankruptcy, you’re not getting paid back and you’re a victim. But what I can tell you is that is a very small percentage of what I see the vast majority of what I see are folks that are eliminating business debt, that money that they probably shouldn’t have been linked in the first place. And that’s a different conversation maybe for later, but, it’s it’s business debt or it’s consumer debt. You know, it’s Wells Fargo, it’s bank of America. It’s chase Manhattan. It’s capital one. Those and it’s American express, I’ll say right off the top of my head, those are probably the four and five biggest.

And you don’t ever hear in the news that those companies are laying people off. You know, you don’t hear American express is laying people off. You don’t hear, they’re not getting their bonuses this year. You don’t hear that the corporate jets are being optioned and that’s, that’s a little bit cynical. But what I can tell you is for the, for the common middle-class household that owes American express 25 grand, well, that is actually $10,000 that they spent, but it’s been gaining interest over the last 12 years that getting rid of that $25,000, in my opinion, the benefit to that middle-class family so far outweighs the detriment to American express that I feel almost like, you know, it’s, there’s, there’s, I’m beating up on the other side.

It’s interesting that you bring that up because I’m literally looking it up right now, as we speak, I told you I’d break the fourth wall and I’m doing it right now. As a matter of fact, you talk about credit cards and I imagine that we will get deeper into credit cards as we go on here. And usually for anybody who’s a regular listener knows. I like to take the, you know, go through the history of what we’re talking about in the history of the person I’m talking to. I, we may, this may crop up again throughout our conversation, but you say that banks have done their research and setting those interest rates. What about on the other side, the fed is now lending money to banks at zero interest, but they’re still charging the 20. If you’re lucky, 25%, maybe an introductory rate of 11 or 12 or 17.

And before you know, it, you, you, you transfer funds or you try to transfer onto a card like that, pay it down six months. It goes back up to 28, 29, 31, as you mentioned, which is a new one on me, I have to admit, that’s about as high as it gets. Isn’t this might be a loaded question, but it seems to me that the system is set up. W when you say pitting one side against the other, it seems to me the set up the system is set up for exactly that and for the banks to always come out ahead, or you tell me if I’m wrong.

Well, well, yes. And let’s sort of plus one on that with regard to credit scores, right Like the biggest credit score and lending conundrum is that only the people with good credit scores can get low interest loans, but the majority of people with good credit scores don’t need the loans, right So the people that need to borrow the money are the ones that have low credit scores. And they’re the ones that have to borrow at 28% interest. As you know, the folks that don’t need it are the ones that get those American express express cards with 4.9% lifetime interest. And I can tell you that having good credit as you may or may not know, personally is not easy, right So, you know, I’ve been a bankruptcy attorney for 20 years, and I can tell you that it’s only been in the last five that I have been able to keep my credit score consistently over seven 50 and to get those great credit deals, you’ve got to be over 800. I’ve never, I’m, I’ll be 42 years old. This summer. My credit score has never started with an eight. It is not easy

If the credit score itself is so vital to, as an indicator, as a, you know, one of the very first main points that and potential credit tour is looking at to your financial strength or weakness. Then if that number is so important, and I assume there’s some sort of Pythagorean formula going into determining it, why can I sign up with Experian boost and immediately jump it by 20 points Just because I send Experian a check

Because 20 points does it make a difference to go from the six 62 is six 80, doesn’t make a difference.

Does my underlying premise of that question make any sense that the credit score itself is, is arguably a creation of the banks to judge you. That it’s a, that it is a semi artificial marker. And you know, if again, if you can hire a company and pay them a check for a quote unquote service and boost your, your, your score by that many points, very arbitrarily little, literally within a few minutes of signing up and paying them. And then the score itself would seem to me, is a, is at a minimum flawed, if not just a fake indicator and a fake bar that you are judged by and an excuse by which you are either granted or denied things. Okay.

Not only that, but I don’t know whether or not you’re aware, but there’s a, if I had to put a number on it, there’s about six different credit scores, right So there’s, piko, there’s phyco one, phyco, two phyco, three there’s, whatever you see on the internet. So, you know, one of the common, one of the things that’s very interesting, and it’s a common question that I get is, Oh, you know, I looked on credit karma and my credit score is seven 40, but I went to the car dealership and they said, my credit score is six 60. Why is that And the answer is because credit karma is not your real credit score, or let’s go deeper. What credit score actually is the real credit score. And the answer is the real credit score is whatever one that particular creditor is looking at when they lend you money.

Because I can tell you that I monitor my credit score personally, through my bank app, you know, with a PNC bank, there’s a credit score thing on there. That’s free. the mortgage on my house is with chase Manhattan. They offer a free credit score as well, monthly. And you look at all of those, but I can tell you the last time I bought a car, I walked into the dealership and I thought, you know, I, this is fantastic. I’ve got a seven 90 credit score on my chase Manhattan app. How can I go wrong I walked in and they told me, well, your credit seven 35. And it’s like, what You know, it’s, the credit score is very from source by as much as hundred points. You

Thought you had an a, and they gave you a, B

Yeah. They gave me a BB plus. I thought I had an, a plus. They gave me a B plus. And for, even for that kind of situation, when you’re financing a car, those numbers that I just told you are the difference between getting the at and getting the, the rate that you see on the ads and getting the second tier. Right So my credit score where I am right now qualifies me basically for second tier as for what I’ve seen. But you know, you see, Oh, the Chevy commercial comes out by a 20, 20 Corvette, 0% interest for 60 months. Yeah. Right. Do you know how many of those 0% interest loans actually get out there The answer is the 0% interest loans go to the people that could write a check for the Corvette. If they really want it, they don’t go to people like me.

They don’t go to people like you. I get, I get that same Corvette. I want to go. They want, you know, $15,000 down. And my interest rates going to be for right. Somebody with a seven 20 credit score goes to get that car. They’re going to want $15,000 down on their interest. Rate’s going to be nine, but don’t worry. You can get a Kia. You can get a Kia at 1% interest. They’re just going to sell you an $18,000 car for 25 grand. But you can pay 1% interest on the 25 grand. That’s a whole nother. So yeah,

But one way or another, the big boys are getting their money. Every time we’d talk a lot in my political life. And even on this show, when it’s in its brief young existence, that this system, and you’ve heard it a lot, especially when there were double digit numbers of democratic presidential candidates, the system is rigged. It would seem to me that this is yet another situation where the system is rigged. Would you agree with me or no

You know, it’s listen. The banking industry is just like the casino industry. The house always wins. Jeff House always wins. That’s how it works. Whether you say that’s rigged, or whether you say that’s rigged by design, whatever you want to say, house always wins.

It seems to me for the example that you just cited. I happen to be a Jeep guy as everybody, most everybody who’s watching or listening will know. So if I go to Brown dog, not to single them out, but they happen to be the dealer that I go to when I need service.

Yeah. This isn’t the dealer level problem there. So go ahead.

But no, no, I understand. It’s the banks that they’re working with, but if I walk in there and I’m, well, you’re probably gonna tell me, there’s, there’s one percenters with bad credit. I don’t know how that could happen, but if I walk in there and I’m a millionaire and I could just as easily throw down a wad

Of cash and pay for something, I’m the first one that’s going to get that 1% or 0%. But if I’m broke and, or the best I got is a $15 an hour job. And in this, and in the Lehigh Valley, as you well know, is, is good. Unfortunately, and my credit score is not, doesn’t start with an eight and heaven forbid, doesn’t start with a seven. I’m actually going to get charged more. They’re going to ensure that they extract more money from me if, for no other reason than I don’t have, it seems like a rigged system. To me,

You’re a better, you’re a more of a risk because you don’t have.

So I know that we’re how much of the credit score then is based on pure income. Not, not just, I’ve always made all my payments on time. I’ve never been late. I’ve never defaulted. How much then is it based just on income

I don’t think credit score is based on income at all. I think that a product of income is how you handle your credit by design. But I don’t think credit score is based upon income, but that doesn’t mean that loan terms are not based upon income, because what happens when you go to apply for something they want to know what’s your credit score and how much do you make, right.

Right.

And depending upon your credit score, this is also another interesting side note. Depending upon your credit score will depend on how they’re going to verify how much you make. If you go into a car dealership to buy a car and your credit score is six 40, they want to know how much you make. And they want to see pay stubs. If you go in to buy a car and your credit score is seven 80, they just want to know how much you make, write a number down on this piece of paper. All we don’t need to see your tax returns. We don’t need to see any pay stubs. That’s fine. You’re a seven, eight. And so to that extent, it gets involved. But in actually making the number, I’m not aware of a situation where the income actually dictates your screen credit score number.

We’re at about five 33 in Eastern time on Sunday, May 24th. This is the Kennedy effect at that other side of information homepage and about 20 other pages throughout Facebook. If you want to submit your questions or comments, I need you to come to the homepage at that other side of information. That’s my page and the page where the show, the group, I mean, where the, show originates. And that is where I will actually see your questions or comments love if you’re questioning and commenting on any of the other 20 different groups and platforms and pages that we’re sharing too. I only see them at the home group at that other side of information, please feel free to share the stream. This is a,

An educational historical type show. We want you to learn and gain from this. My guest is Charles LaPlaca, a bankruptcy attorney, my bankruptcy attorney, whose office is at 13th and Hamilton and Allentown. And we’re talking some personal finance and the pitfalls of credit and bankruptcy in general. Is it your, you treat your, your particular practice. I would hope that it would be this way throughout the industry. Sadly, I doubt that it is, but you treat your, because you and I have talked before this offline, before we ever did this, you do treat your people regardless of how much trouble they’re in, still as human beings. And I’ve always gotten the sense from you that bankruptcy does not have to be this predatory end of things, but can be a new start. Would you characterize it that way Would you agree with that general sentiment

I would absolutely agree with that general sentiment. And what I would tell you is that, so I I’ve been doing this type of work for 20 years. I’ve been a licensed attorney, where are we looking at 17 and a half years. But, for three years before that, I was working in a bankruptcy firm as a law clerk before I had my license. And the one thing that I can tell you is not only do I agree with that statement, but today more than ever. So let’s talk about that a little bit. Right So 20 years ago, the stigma surrounding bankruptcy was greater than now. I don’t want to say it was, you know, the most stigma of all time, because even when I started practicing this, the stigma level of a prior bankruptcy was fairly low, but in the last 20 years, the stigma has basically all but been erased.

what I can tell you now is a lot of people say, well, you know, how long will bankruptcy stay on my credit report And the answer is seven to 10 years. And people say, well, why seven to 10 What’s the difference There are two types of consumer bankruptcy, chapter seven and chapter 13, a chapter seven bankruptcy is the one where you do not repay your debts. You get a fresh start and you do not have to repay your unsecured debts. That one will stay on your credit report for 10 years. A chapter 13 bankruptcy is for folks who are either behind on their mortgage and they’re looking to cure the rear, just get caught up against the avoid Sheriff’s sale and keep their house or it’s for folks that make too much money. And I know this is on your list of things to discuss today is the 2005 amendments that put the means test in place. So if you make too much money to erase your unsecured debts, you have to pay back a portion. And that portion can be anywhere between 1% and a hundred percent. And there’s reasons why you would repay a hundred percent through bankruptcy if you had to. But that’s a different little bit off topic anyway. No, no,

It’s not because it’s not. We could, and you jumped right back on track after. I just want to ask who determines that Who pays, when you say you might have to pay back 1% or a hundred percent who’s who’s making that decision. Is that the judge

No. So in 2000 it’s formulaic 2005, there was some bankruptcy code changes. So there is, there’s a subjective test. This is the means test.

This is the 2005 bankruptcy bill. And we’re certainly going to get, we’re going to get into that later because it has everything to do with medical and student debt. And we’ll get to that. But this is the bill that you were, that you’re referring to most folks,

Bankruptcy, abuse prevention, consumer protection act, bap, Seabrook.

Oh, that’s all. Yeah. Short, short name, short name. That’s all. It was no, no mouthful there. Charles, thank you for handling that. Cause I never could have gotten to it, but for folks that are, that are, you know, we have to try to take in, take for granted that there are folks on listening and watching that have never heard any of these terms before. So you did just define that. But for people who are a little more politically in tune, you know, the political walks, some of my friends who are out there watching now, this is the one of the gargoyles on the side of the building, this, the bankruptcy law of 2005. This is the one that made medical and student debt practically a thing, if not any evil thing or at least evil in the eyes of the, of the law. So this is what we’re talking about now. So let me allow you to rejoin your, your stream of thought there, but that’s the bill that we’re talking about right now.

Well, right. And in my opinion, the bill in and of itself is an oxymoron. Just the title because it’s abuse prevention and consumer protection all in the same title. Right So you’ll, you’ll see how that’s interesting here in a second. So with these 2005 amendments came, something called the means test prior to 2005, when I started practicing bankruptcy law between 1978 and 2005, I don’t know what happened. I don’t know how bankruptcy works pre 1978 that’s as far as I’ve ever gone back in my history, before 1978, 1978, the year I was born very good year. But anyway, that was the major.

It was 1969, but we’ll give you a it’s right up close it’s on the list

Anyway. So, it used to be that the determination of whether someone qualified for liquidation bankruptcy, chapter seven, just to illustrate, eliminate your debts. That used to be based on a person’s individual situation. Like, okay, you’re if, if you’re a doctor and you make $300,000 a year and you live in a $3 million house, and because you can’t afford your, you know, I don’t even know what that would be because you can’t afford your 10,000 a month mortgage and your Amex bill, we can get rid of the Amex bill. You can keep your house, keep your mortgage because you have secured debts or other obligations that you’ve chosen in life that make you unable to afford your unsecured debts. We can get rid of them. Now that’s a very extreme example, but that’s the way it used to be. So that was considered bankruptcy abuse. And I think some people might consider that extreme example, bankruptcy abuse, but let’s talk about a less extreme example in a second. So the 2005 code comes in and instead of it being based on a person’s individual situation, now we have two tests. Now we have the median income test known as the means test. So what happens is the IRS goes out and calculates a formula and they say, okay, folks in the Lehigh Valley area, because it is regional, it’s statewide, it’s regional, it’s all of those things for an average household of two in the Lehigh Valley.

Wait, let me, let me, let me just stop you real quick. Sure. You’re this test, this formula that you’re talking about is regionally slash locally, geographically based, and it’s based they do that. I’m going to assume you can correct me that the general cost of living and salaries in the Lehigh Valley and actually the Lehigh Valley is a great example of this because we have two major metropolitan centers, you know, within an hour and a half, I was getting, Oh, sorry. Well then I, well, you know what, great minds, Charles, this is what we’re, that’s why you’re here. This is why this is going to be great. So what you would be making as a well I’ll take myself. I’m I’m my practical experience outside of politics is in the warehousing field warehouse. People, managers, supervisors, operations managers, safety managers, et cetera, et cetera, because I’ve been in management at a management level since I was 19, I’m only, I’m only 15. Now. I don’t want to stress that part. they don’t make the same thing here that they do closer to New York or closer to Philadelphia. And in fact, they don’t make the same in Philadelphia that they do in New York. So when you say that, when you talk about the, the, the local geographical content of the formula that you are currently explaining to us, that’s what you’re talking about, is that correct

Correct. And, and what’s interesting is to directly relate it. So a warehouse worker and Fogle’s Advil, and I only choose photos because there’s a lot of warehouses out there. A warehouse worker in Fogle’s Advil does not make the same as a warehouse worker in Jersey city. Right. Right. So, but the warehouse worker that lives in bill and works in Jersey city basically gets penalized because the means test applies to where you live. So let’s go, what’s the average household four. Is that still a thing Husband, husband, wife, daughter, child, or a husband.

I was going to say parents and men too, to point that the traditional 2.4 kids. Oh, a cat. Yeah.

Yeah. So for kids, so household of four in our area is $103,000. Now

I wouldn’t have guessed. It was that high to be perfectly honest. Yeah.

Let’s see. It seems like a big number, but it’s not necessarily a big number. And I’ll tell you why, because when you have four kids, when you have two kids, you have a household before, in order to get to that number, you have to be working. You have to have two jobs in this area, right. So mom and dad have to be working. And then depending on the age of the kids, they have to be paying for daycare. And then they have to have at least two reliable cars that they can get back and forth on. And then I think the median home price really high Valley, somewhere around a quarter of a million bucks give or take, right So when you start adding and rice

And rising, and in fact, it’s interesting because now Charles and I have referenced a few times now folks, the, the two, the big crash of 2008, the great recession, the banking collapse. It has many names as it was not a very simple thing. Although it kind of was a simple thing, but you know, economics has never a simple, but, as the housing market crashed nationwide, we saw New Jersey where I was still living at the time and Las Vegas area of all places where the, the leaders in, nationally in foreclosures, California, Vegas in Jersey. I can’t tell you which one was one, two and three, but those are the big markets. And, the Lehigh Valley, believe it or not, even from 2008 was one of the first places to rebound from that and have home sales pick right back up and have that even just that natural price, escalation kick back in this is one of the first markets to, to recover from that.

And why I’m sure a lot of different people will come on and give their opinions. My opinion happens to be one of the things that you and I have already referenced quite a few times is that I can live here, travel into New Jersey or New York in about 90 minutes and be in the city or two hours South and be in Philadelphia. of course I’m talking about commuting times, not regular driving weekend times for, for pleasure about commuting times and there, and a large number of people, me included have decided they’re willing to do that, to make the extra money and take the lower cost of living that were willing to spend so much of our times in our cars. Most of our conversations before getting this together

This week have been in my car. as you might remember, but so I will just say that. So this is one of the places that housing prices when Charles throws that number out there of a quarter million dollars and maybe, or from the Lehigh Valley. And you’re thinking, gosh, that sounds like a lot of money. Well, first off it is a lot of money. If somebody handed it to you, you’d gladly take it. But this is one of the, the hotter, quicker places to sell faster tuner of our homes in really all of the country is the Lehigh Valley. There is a shortage of homes for sale and a surplus of people looking to buy them. So again, I, I know I interrupted you, but I wanted to get that clarity out there.

Let’s put it in perspective a little bit, right Because a quarter of a million dollars, $250,000 sounds like a lot of money, right So what is, what is $250,000 gets you within an hour’s commute, you know, commuting time, but then an hours commute, a Philly or New York, a quarter of a million dollars gets you a townhouse, right It gets you three bedrooms, three bedrooms, one and a half bath, one car garage. If you’re lucky right here in the Lehigh Valley, a quarter of a million dollars can get you four bedroom, two bath house, two garage on a, you know, a, a sizeable lot, depending upon where you’re going now. Yeah,

Yeah. I was going to say, I guess I could argue that two 50 is not going to get you that in Doylestown, which is probably, which would probably cost you, even though it’s obviously much closer to Philadelphia, it’s probably still an hour commuting because of the sheer number of people who were doing it. And, but again, I just want to clear these things up as we go so that we don’t just assume everybody knows that what you and I are talking about. So again, I did interrupt you, but

You can still buy a place to live in the Lehigh Valley. Now it won’t be the posh areas, or however you want to describe it, but you can still buy a dwelling in the Lehigh Valley for 70 or 80 grand. You can’t buy a garage for 70 or 80 grand closer to the city, right So, you know, when you, when you’re putting those things in perspective, that’s what you have to remember. So, so back to the, the 2005 amendments and chapter 13 bankruptcy, let’s go back to that. So why does some people have to pay their money back Well, if this form arbitrarily says that you make too much money to file chapter seven bankruptcy and eliminate your debt, then it trips you over to a chapter 13 as your only option, which is a repayment. And then the amount that you have to pay in a chapter 13, bankruptcy is dependent upon how far over that line you are now. I don’t want everybody to think that this is an absolute, you know, black Sharpie line. It’s a, it’s a gray fuzzy line for an experienced bankruptcy attorney, but it’s a line, nevertheless, right So you, you do have some folks that don’t want to,

There’s a formula, but you’re saying the has some

Give

The formula has some give, right So I would say for the right situation, there’s somewhere around $10,000 worth of gift. Meaning if a household of four, if the numbers, I took it off my screen here, but okay. So household, before I got it back, household of four, the number is 103,000. So for the right situation, a household or for making 113 to 115 with the right circumstances and by circumstances, I mean, additional expenses above the average expense. So if you’ve got both of your kids in daycare and addition to your house in two cars, you have a travel camper and two kids in daycare and extraordinary medical bills, then there’s some wiggle room. So it’s not a black line, but it’s, there is a lie. So have you good

You said you’re, you’re, you’ve been the actual practicing attorney for 17 years. So from 2020 to put you right at around 2003,

Correct. I was licensed in the fall of 2003. Can you,

I guess I would say generalized, cause I don’t want to, I mean, obviously we’re not going to talk about any individual cases, but did you see the bankruptcy problem in this country or at least in the Valley in your practice, I’m sure you speak to other attorneys in your field as well. Did you see it get better or worse after the bill of 2005

Well, that depends on the perspective. It got better for creditors because more people had to pay back something. And the creditors

Being the person who originally loaned the money in the first place, the credit card company, the bank, the mortgage company, the car finance,

Right So the, the whole, in my opinion, which I think is also grounded. In fact, at least in part, in my opinion, the entire purpose of the 2005 amendment was to have more people paid back something. Even if they were paying back 20%, they were, they started to have to pay back 20%. And there’s another interesting dynamic to this too. They started having to pay back 20% instead of being able to walk away with a complete fresh start. Here’s another really interesting twist, right The not only that, but the people that go above that income line actually have a worst credit result. So not only are these people down trying to get a fresh start, but their fresh start requires them to pay back 20%. Oh, and by the way, while you’re down, we’re going to kick you in the head and say your credit is going to be worse longer because while a chapter 13 bankruptcy only stays on your credit for seven years, you have almost no ability to borrow money while you’re repaying, which is mind blowing. It’s actually absolute opposite of the way it should be, right. Somebody who has to pay back 20, 30, 50% of their debt, their credit should get faster than the guy who just got to walk away. Scot-free right. Well,

This is the, this is to, to, regular listeners and viewers will know, I love my analogies. This is analogous to debtor’s prison. Yeah, you can’t pay. So we put you in prison while you were in prison. You can’t work, earn a living, make any money so you can’t pay. And it becomes then a bit of an endless cycle. So what you’re saying, I’m repeating what you’re saying, but I want to repeat it for emphasis. I, I remember one of the arguments for the bankruptcy bill was that people who are declaring bankruptcy have to have some quote unquote skin in the game. We can’t just let them declare bankruptcy and walk away. We can’t just let them run up bills, untold numbers of bills, bills. They know they’ll never pay. And then just go, Oh, well I’m broke and walk away from it. But suppose the point of the bill, the supposedly selling, well, it was a selling point, but I mean, there’s supposed of logic behind it. I happen to think it’s the benefit banks. And they did lobby one heck of a lot, you know, and it originated from the state of banks, but was to supposedly have people put skin in the game. But what you’re saying is that even once they had that skin in the game, given to them by law, they actually suffered more by declaring bankruptcy or more by declaring it after 2005.

So people that were above the income line suffered more in that clarity that you were talking about in that formula. I was talking about suffered more after 2005, for two reasons. One, because they had to repay a portion of their debt. And two, because while you’re in the repayment, bankruptcy, your credit score does not increase. So to give you a perfect example, right So how long this is the example I use when I’m talking to people who are considering it, the question is, how long does it stay on my credit And the answer is nobody cares. You don’t need the care. How long bankruptcy stays on your credit. What you need to care about is how long until banks will consider you loan worthy again. And the answer is from a chapter seven bankruptcy, the biggest purchase you’re going to make as a house. And in order to get a house in order to buy a house after a chapter seven, don’t pay your debt bankruptcy. It takes about two years in order to get a normal interest rate. You could actually buy a house after a year, but you’re going to get surcharged because you filed bankruptcy, right For a chapter 13 case, you really can’t even get a mortgage until you’re done paying back what you had to pay back, which is anywhere between three and five years. So what really has happened as a result of this, Jeff is the hard working middle-class Americans are the ones that got screwed.

Anybody who is a regular watcher viewer, this program, or my business partners and blue collective, my, my brothers and sisters in the democratic party, in the union movement. I am sure that that last statement came as no shock to them whatsoever. But if I could just ask you to say, to be clear and for a point of emphasis. So you’re saying if you declare chapter 13 where you are required to pay back a percentage of what you still owe, not the full amount, but a percentage of such based on the formula that we were talking about. You actually. So even though you are still responsible for paying something back, you are still on the hook. You’re not walking away, you suffer worse for that than you did before 2005.

Yes. And you suffer worse than those, that qual that qualify to walk away because the walkaway option is still the same. It’s just, that applies to fewer people now. Okay. And it just so happens that those fewer people to, to address the individuals that you were just addressing, those fewer people are the labor union folks that make just a little bit too much historically, to qualify for anything that the people that make less than them qualifies, same thing in bankruptcy.

So I come to you and I have, and I will and say, I want to declare chapter seven, you put me through that formula. There’s a chance I can, there’s a chance I can’t, depending on the formula. And if it ends up being 13 or nothing, 13, probably still better, but I’m still getting, I’m still getting a kick in the face regardless.

And depending upon your yeah. And depending upon the percentage you have to pay back when you’re faced with 13 or nothing, sometimes the answer is there’s a way other than bankruptcy to get a better result, basically by negotiating reduced payments with your creditors outside of bankruptcy and just paying them back some reduced portion. Now that’s a fairly rare circumstance because it’s a fairly rare circumstance where you’d have to be in a chapter 13 bankruptcy and be paying 70, 80, 90, a hundred percent back because somebody who would have to pay 70 to a hundred percent back in bankruptcy may actually be better off negotiating the debts and settling it themselves. Or with a third party, you might get a better that

Is that a service that you provide as well, when you get, when you fit into that narrow little lane of it is either nine or seven or 13 is good. Let’s see if we can split the difference and, and talk to these folks and work something out.

So it is a service that I provide. However, I, I try my best not to provide it. And let me tell you why there’s no magic, right It’s calling your creditors, telling them your story and seeing what they’re willing to do for you. And one of the things that I don’t that I don’t do here in my practice is I don’t charge somebody to do something that I think that they’re just as good off doing themselves without telling them that to their face. So I’d say to somebody like that, listen, you can probably call these creditors and negotiate a very similar deal that I would get. And if I could get a little bit less, the amount that you’re going to pay me, probably next that out. Anyway. Now when I say that to somebody, they oftentimes say to me, listen, I don’t have time for this.

I would much rather just pay you to do it. And that’s okay. But what I want everybody to know, whether you’re meeting with me or listening to this radio show is you can negotiate with your creditors. You don’t need an attorney. You don’t need one of these, companies that you see, you know, these debt settlement companies that you see advertising on the radio on the TV. Those are the kinds of folks that will tell you. We have pre negotiated arrangements with the creditors, blah, blah, blah, listen. Bank of America is not given any special deal to E E refinance.com or whatever, you know, debt, consolidation.com. I just made that up, right, but they’re not given any, any special deal to them, but they’re not going to give to you if you call and sit on the phone for an hour and talk to somebody

We’re at the top of the hour on the East coast, 6:00 PM. This is the Kennedy effect from May 24th, through that other side of information, and many, many other Facebook outfit outlets. My guest this week is my bankruptcy attorney, actually, and my friend, Charles 20 plus years in the business dispensing some, really invaluable information, as well as, grounding this discussion in the entire policy of bankruptcy itself. Not just is it for you Is it not for you What happens, but how did we get here How did we get to this point where so many Americans, so many of our, our friends, neighbors, family, so many of the Lehigh Valley is declaring bankruptcy. How can we avoid it What’s the policy and policy positions, policy, reasoning behind it. How can change it How can

We make it better Make it more fair. The credit companies, Charles, that I hear advertised on TV or more so the radio, for some reason that can, we can get you out of whatever we can work with your creditors. If I could think of a name of a company at the moment I would, I know that, you know, they deal with there’s a lot of those tax, ones that you hear on the radio about are you, you know, a hundred thousand dollars behind in taxes will humbly. If you’re a hundred thousand dollars behind the taxes, you got better, you have bigger problems, but that’s a whole different, topic, or at least how much you’d have to not, how much you earn to be that far back or how long you’d have to go without filing. But those type of businesses that say, are you in financial trouble, we can get you out of it are those. I would have to assume you’ve come across those companies. You probably come through them. Of course, come pass them all that all the time. perhaps a bit general of a question, but good, bad. They’re worth it. They’re not worth it. They get you in more trouble. They get you in less trouble or are these all individual cases.

So the answer is they are good for a specific type of person. And let me just, let me just offset that very quickly by saying there’s a lot of them out there that are scams, right Anytime you have folks in a desperate situation, whether it’s health finance, or some other type of desperate situation, you’re going to find predators, whether it’s predatory banks, lending money, or whether it’s predatory debt, consolidation companies trying to help you get out of the debt that the banks lend to you, predatorily whatever

Which, which they’re asking you to pay them to. Of course, they’re not providing you that service for nothing. You have to pay them. And when we talk about predatory lending, right And when we talk about predatory lending, we talk again about the 2008 financial crisis, because that is part of what caused all of these bank problems as deep a Democrat, as I am as much of a progressive new deal Democrat as I happen to be. I do think that one of the very few things, the president George W. Bush tried to do, and we have not done it since, and we did not do it for a good bit beforehand was to encourage home ownership over renting. Some people have to rent the first time or moving out of mom. And dad’s, the student who may have just graduated. Some people just choose to rent because they don’t want to have responsibilities. They get a leaky faucet. They want to be able to call somebody and it’s taken care of, but it used to be a time in this country when home ownership was not

Just the goal, but a policy position, because home ownership is one of the first off. It’s one of the first ways to build wealth. Because presumably as you age, your home appreciates, you keep up maintenance. You may modernize it. You might put a new kitchen, you have to do a new roof. You might go from a regular water heater to a tankless water heater. Maybe you install solar, whatever it might be, but at least in theory, your property appreciates in value. When you get older and you can’t take care of it anymore, you may decide to sell it. That what you make off of it is kind of your nest egg. And then maybe you go to Florida. Maybe we go to Belize. Maybe you go wherever you go. But that’s your, that’s your wealth. That’s why when Elizabeth Warren talks about property taxes, she’s talks about it as a wealth tax.

It’s you are taxed over and over again, every single year on what is already yours. So that said in 2008, well really at the beginning of the second term, George W. Bush began to push home ownership. I want everyone in the country to be able to own a home. If they want one and his administration through the various agencies, encouraged, increased loaning and mortgaging out. It was the banks that then of course, made these loans to people that they knew could not pay them because they paid themselves commissions and fees on them. Then they took those loans, bundled them up into default credit, swap derivatives, which is a very fancy names. Basically took a bunch of loan mortgages, put them in what is essentially a stock and sold them because it was supposedly guaranteed income. Everybody pays their mortgage, its income. Every month. It’s like owning. It’s like owning a rental building. I might have it. Yeah. It cost me 10 million to build it. But I got 300 units in there and everybody’s paying me 2000 a month. It’s guaranteed money.

But we loaned. We gave too many mortgages to people who couldn’t afford them and people who couldn’t pay them and people whose credit scores as Charles and I were talking about earlier, didn’t warrant those loans. They were granted the loans either through incentive from the government from, well, we can give it to you, but we’ll just have to pay. As Charles was talking about with cars, a point or two higher, or perhaps write a bigger down payment check or whatever it might be when those loans came to not be paid or the default swaps then collapsed because the loans were being paid. Boom, there’s your financial crisis now summing up the entire 2008 financial crisis in

The 60 seconds or so that I just did. It is folly to a great extent. It’s not that cut and dry. There’s a lot of things involved in it, but that’s the biggest reason. So would you say that, well, let me put it this way. What would you say maybe before 2005 and since are the, are the biggest reasons that you see for people that have to file or have to come to you for your services, whether they file seven or 13. W what would you say at this time is really driving that

Oh, I would say that that’s broken down a lot by age demographic, for example, a lot of the older folks that I see the retirement or post retirement age folks that I’ve meet, essentially what’s happened is they’ve lived their life according to income. And then when they retire, they’ve not saved properly in air quotes, because that’s a loaded term, depending on who you talk to, but basically their retirement funds are less than their income. So for the first few years, they’re supplementing on credit cards to maintain the same lifestyle with less income until they can’t anymore. So that would be

Making that adjustment from a working steady income to our retirement in common. Usually there’s a drop off from there,

Correct. And what money they do have saved in IRAs, 401ks is not enough. So essentially what happens is they supplement with credit cards because we don’t want to use our retirement money. So they supplement with credit cards and then they can’t pay the credit cards. And then they start using their retirement money to pay the credit cards. And then when that runs out their bus. So for the older folks, that’s the situation for the younger folks and by younger, I mean, let’s say let’s call it 33. And under the 33, and under crowd that I filed bankruptcy for, it generally has to do with the fact that they cannot get a job that allows them to pay their student loans and live the lifestyle that they were accustomed to from mommy and daddy. And they use credit cards to supplement. And when I say the, the lifestyle custom to mommy and daddy, I don’t mean, I don’t mean driving a Mercedes and eating at fancy restaurants. I mean, the regular things that most middle-class America is able to afford the folks under the age 33 are not able to afford. Can’t go buy a Honda accord and pay rent and go out to eat, or to go, go on dates once in a while, you can’t do all of those things and pay your student loans. So,

Or even, or even just pay the rent, the utilities, the groceries, the laundry mat, if you don’t have it in your union, that those look we have, you know, my girlfriend has some older kids who they can’t wait to get the hell out and be on their own. And they think sometimes it’s just going to happen. You know, they don’t get it. I mean, they just don’t get it. They’re going to hate that I’m talking about it, but that’s too bad. They don’t get it. They don’t understand it, but it’s

Just, I’ve got a 20 year old in the same boat,

But it’s not right. Did it end Do they tell you how much they’re going to move out Oh, I can’t wait to get out of here. I’m going to, I’m going to move. I’m going to get my own place. And how’s it going It’s a hell of a wake up call, isn’t it Yes.

Yeah. I can tell you that since he has moved out that his lifestyle has changed dramatically. He thought he had a bad at home with the things that we required him to pay at age 20 while he was working in order to stay under our house. I think he, his pride is preventing him from coming back at the moment. But I think he’d really liked to be back on the couch in the basement if he had the option.

But what my point though, is that it’s not just the rent that we’re talking about. Although we could get into a whole discussion about rents because you want to talk about scams. You know, we can talk rent, we should write it down. So I don’t forget to talk about rent, but it isn’t really just the rent though. It’s the student loan debt that you mentioned, but it is those other things that kind of chip away at you. It’s kind of death by a thousand paper cuts. Isn’t it It’s the, it’s the electric bill. It’s the cable. It’s the internet. It’s the groceries. It’s the, the, the, the gas, it’s the, your own auto insurance, because you’re not under roof anymore. It’s even if we took the student loan debt out of it, it’s not easy to just pick up and move out. Not the prevailing wage in the Valley, I think is in the $12 range.

Yeah, that sounds, that sounds, that sounds right to me. Right How far off

So I just want to say that, that I’m not trying to put words in your mouth, but I just want to say it’s not even, even if we didn’t have that student loan debt, even if we could take that and just set it off to the side, or if we were lucky enough not to have student loan debt, it, all those other things are quite an adjustment. Absolutely. So that knocks away at the income pretty quickly.

Well, and I think if you look back historically that, and I’m more or less making this up, but there was a time period, whether it was the seventies or the eighties, when you turned 18 and you could afford to move out of your house and get a job and start a family. And what we’re seeing now, I think is that that is happening later and later, maybe now instead of 18 or 19, it’s 26 or 27 or 33, or in some cases never

You’re reminding me of something that I wanted to get to earlier, when you were talking, we were doing the, you were looking it up the, you know, mom, dad, two kids, dog cat from the new deal until say the early to mid sixties. And this was the goal of the new deal. By the way, was in FDR second bill of rights, the ability to believe it or not take a vacation own a home, take a vacation selling that said essentially from the new deal, what was the golden economic age for this country, really And top to bottom from the top 1%, all the way down. It was essentially the golden economic age for this country. Not perfect. Relax before the comments come, not perfect, but pretty much a golden economic age. We grew the largest middle-class and so on. And so on. I won’t go into the whole thing. We’ll do a whole other show, probably on the new deal. It took an average of 1.2 full-time jobs within that household to support that household groceries, mortgage car, medical utilities, the whole thing. It now takes on average, not just in the Valley, but nationwide. I don’t have a Valley number to be honest, 2.7. So that takes into account. Then if we’re talking about mom, dad, son, daughter, daughter, son, mom, dad, or working, that means either mom and or dad is picking up that other 0.7 or that

Polygamy is still illegal, correct.

Or they’re splitting that 0.7. Or if I use your 20 year old son, as a, as an example, or my girlfriend’s older kids, as an example, they’re not just working for themselves. Now they’re contributing to the household because you know, you’re gonna that’s 2.7 full time jobs to support that same house, house, car, not two cars, car utility’s ability to take a week vacation. 1.2 from the new deal on 2.7 after Reagan. Well, think about that. And what does that have to do with Charles being here Because it’s all debt. When you say that folks retire and they’re living a 2.7 lifestyle, but retirement savings is only providing 1.2 to fill in the 2.7, we start to get ourselves in trouble. I’ve done it. I’m here. That’s how I know Charles. So would you, does that sound like a, a set of, of numbers that make sense to you that you see come through the door each day

It does. And, you know, as, as folks are also living longer, because that’s a factor here as well, you know, the, the life expectancy is greater now than it was in the sixties and seventies. as folks are living longer, they’re using that money faster as well, too. So it’s a combination of all of those things.

How much of a factor in your business is medical debt

Less than you would think would be my guess basically, well, maybe not. So almost every single person that I filed bankruptcy for has medical debt, but very few people, the medical debt is the reason unless you’re factoring in. Okay, well, you know, I had a knee replacement, so because I had a knee replacement, I couldn’t go to work for two months because of the type of jobs that I have. I didn’t get paid for the two months that I was rehabilitating my knee. And I put all of my expenses on credit cards. So, you know, I, I don’t necessarily have that conversation with a lot of folks, but just about every person I filed for owes medical debt somewhere. And it’s funny that you should say that because one of the things I wanted to do when I moved to the Lehigh Valley before I considered starting my own firm in 2008, 12 years ago, was working for that creditor firm. I very desperately wanted to do consumer law at the same time. One of our clients happened to be, one of the largest healthcare systems in the Lehigh Valley. And

We’ve only got two Charles it’s gotta be one or the other. There’s only two. Yup.

So every time I would meet a consumer that I had the ability to help, I was, I couldn’t help them because, Oh, they owe 400 bucks to the hospital from some surgery from two and a half years ago, some, some random copay, or they owe 300 bucks in lab bills from this and that. And that would be a conflict of interest. So one of the, when I parted ways with that firm, it was very, very amicable because I simply went to the powers that be at that law firm and said, listen, guys, I’m miserable. I am. How old was I Then I was in my late twenties. Right

No wonder you knucklehead, you didn’t know what you were doing in your twenties. I

Went there and I said, I’m miserable every day coming here. And it’s not because of you. It’s not because of where I work. It’s because of the kind of law that I do and the kind of law that I think will make me happy. We can’t do here. So I’ve got to go. So I had, I had a great parting in that, but yeah, the medical debt is a factor. And I think it’s more, you know, when people think of filing medical debt as a result of bankruptcy, they’re thinking, Oh, well, you know, I went to the hospital, I had a heart attack and my insurance covered 50,000 and I got a bill for $67,000. So I had to file bankruptcy. That is actually a lot less than you think. But if somebody something,

Yeah, well, yeah,

Listen, there’s not a week that goes by that. I don’t get a quest diagnostics bill for some damn thing that I swear. I paid for four times already. Right.

I know. Right. Well that’s because you’re paying quest, you’re paying the person at the desk who said, hello to you. The one that opened the door, the one that gave you the paper, gown, the one that stuck in the bloody tube, or you’re afraid the pack-out cause that’s what I do freak the, you know, out that said. So if the, if, if like we were talking about like our, our older kids moving out and facing this list of, of costs that they all too often do not take into account. If somebody comes through your door and they’re not, they’re not coming through specifically because the bill, I O one of the two big hospital firms in the Valley, it’s not that necessarily that’s killing me, but it’s in there. It’s a line part of it. It’s a line item. Even if I’m sending them 50 bucks a month, that’s 50 bucks.

I can’t use to pay the electric or the gas cell phone bill. Right. Or the cell phone bill. Well, that’s a whole, you know what, I gotta take a deep breath from that, Oh God, the cell phone bill. I can’t even, I can’t even, I can’t handle it. All right. You know, you say something and you’ve said it a lot. You said it from the moment I met you all the way through to now. And, you don’t tend to refer to it as the people I do business with the cases I work on. Do you seem to reflectively say the people I help and that’s literally how you look at it, isn’t it

Absolutely. Absolutely. Every one of my clients, somebody that I am helping to advance their life.

It’s an odd business in a way that you’re in, because we kind of hope we didn’t need you, but you do have to be there. And you do, you do look at it that way that when these folks come through the door, they’re not just buying Lamborghini’s then saying, I’ll just declare bankruptcy and write it off. I mean, these are the salt of the earth. These are the salt of the earth that, well. Yeah, well, they didn’t actually have the money to get out of it.

It’s really small. So the percentage of people that I meet that are filing bankruptcy by design is almost non-existent, but it does exist. Like, I wouldn’t even say it’s 1%, but I’m not going to say that there’s people that came here. I’ve at all. I’ve been planning this for six and a half years, and here’s what I did. And here’s the debts. And I just decided six years ago that I was going to methodically run up my credit cards to a point where I couldn’t pay them. I’ve kept my income and my assets to the exact certain spot so that I could get one over on somebody. The amount of people, I could probably count the amount of people that have done that with me, that have said those things to me on one or two hands in 20 years.

So the people I would, would it be safe to say that the majority of people that you see come through your doors on a daily basis are just, they’re just folks. They’re just decent folks who just got off track. They got sick, they got fired, they got laid off. They got the $70,000 job turned into a $30,000 job. I mean, there’s the roughly salt of the earth people.

Absolutely. And I will tell you that I think the most common trend and you know, I, I didn’t, we didn’t plan to discuss any particular questions. So this is kind of developing on the fly, but one of the most common challenges that I see,

That’s the way we like it. Okay. I don’t like to plan it out. I like to see where w where we go, look, we’ve talked about a lot of different things already. We’ve talked history. We talked policy, we did banking history, you know, and before we’re done, I want to get into, you know, what you think we could do better as a society. But if we can

Never talked about the middle contingent. So we talked about the old folks that are outliving their retirement, or didn’t save enough. We talked about the young folks who can’t get that job to get a fresh enough start. We never, we never focused on the middle. So the most that I see are basically the salt of the earth, two working parent families that are living exactly at their means. So I don’t meet a lot of people that are living over their means. They’re living at their means. And they’re one thing away. One tragedy, if you want to, I mean, that’s a strong word, but there are one blowing water heater, or one flat tire away from spiraling, adequate

Tree falling on the roof, you know, busted. And you talked about engines before a blown engine. There was there one thing

Blown engine in a, in a, in a minivan that has a payment on it. There are one blown engine in a minivan with payments away from complete financial disaster.

Let me just repeat that again. These are Pete. Most of the people that you see are working people. Oh yeah. They’re not sitting home, not collecting. They’re not an adult and they’re not just hit the lottery through all the money away. These are working individuals. They have employment. They have just, yeah.

You usually both, both family, husband, and wife are working.

Wow. Okay. Yeah. I mean, that’s Senator Sanders mentioned a lot during his campaign. And while he continues to talk about it, that 40% of the population of the country cannot absorb a $400 emergency. Now, whatever you want to fill in as emergency folks, you fill that in whatever’s appropriate. It could be medical, it could be a car repair. It could be, again, that tree comes down through the roof, but before the insurance company gets to it, but you don’t want it raining in the roof for three months, do you, or a thousand dollars deductible or deductibles thousand dollars that Charles just mentioned. If we move that emergency up to a thousand dollars, the percentage of the American public who cannot handle that thousand dollar emergency goes up to 60%.

Jeff, I see a skewed segment of the population by the nature of what I do for a living, but I have no reason to doubt that number whatsoever.

It is a solid, yeah, my word, it’s a solid, where’s the, I don’t know how to do the Scouts thing. I promise. I promise you. It’s a good number. It’s one of the foundational statistics that you can take away from the Sanders campaign, whatever you, whatever your opinion is. Senator Sanders may be. I happen to have a very high opinion of him, but whatever your opinion may be a fact, as a fact, as a fact, that’s a fact 40% of the country can not handle a $400 emergency. 60% of the country can not handle a thousand dollar emergency. And the richest three people in the nation hold as much wealth as the bottom 60%.

And the thing that bothers me, although, you know, obviously I’m part of it. Everybody’s part of it for the last two and a half months with this, health pandemic. But the thing that bothers me is the folks that can’t handle the $400 expense are the ones that we see every day, delivering packages for Amazon, you know, checking us out at the grocery store with a smile on their face every time it’s a, that’s a real problem.

What has happened to your practice since the, the stay at home, guidelines and so on have happened Are you, are you still taking cases working from, do you pop

Into the office Occasionally the courts themselves are closed. How are you or the courts are not closed The bankruptcy court

Court is bankruptcy court never closed through a day. Wow.

Wow. Well, I stand corrected. I’m happy to learn.

I don’t know, state courts are closed.

I assume that carried her off to, to the courts that you deal with when the bankruptcy courts fair. Okay. Fair enough.

There was never, there was never really a federal, as far as I know, there was never any federally mandated closures. There were suggestions, but governor Wolf has decided to close Pennsylvania along with, you know, 50 other 49 other governors closing their States. but federal government never closed. And I am fortunate in that based upon my age or my knowledge or whatever. I was basically able to flip the switch in about 24 hours and go from having my office, being, meeting people and shaking hands in person to everything being remote. We had that capability here, but I can tell you that a lot of my colleagues in their fifties, sixties, some of them still practicing in their seventies were not as fortunate. And some of them have not been working at all. I can tell you that my business has remained fairly steady. I have a lot less people hiring me today and paying me today, but I have the same amount of people hiring me today, but going on a payment plan because they’re uncertain about their income.

And I will tell you that that is fine as well. You know, I’ve got no issues with that. The biggest thing that I want people to know that are feeling the pinch is I want them to come meet with me so that they can put a plan together. I don’t, you know, cause for a lot of people, it doesn’t matter whether you have the money or the ability to file bankruptcy today. It’s having the peace of mind and putting a plan together. And if you have to save for it, you have to save for it. You know, there are very few circumstances except for foreclosures of homes. There are very few circumstances where somebody comes to me and they need to file bankruptcy today. So even if somebody had the money to pay me to file bankruptcy today in a time like this, I’m saying to them, listen, you know, give me a hundred bucks a month until we figure out where your next paycheck’s coming from.

If you’re getting unemployment, if you’re keeping your job, if you’re losing your job, just, you know, start setting the money aside, whether you give it to me, whether you open a savings account and put it in there, whatever you need to do, there’s no emergency to file right now. And that’s one of the good things about the state courts being closed is because the foreclosures were pushed. So every month in every County, there’s a Sheriff’s sale. And the sheriff sales for all the homes in foreclosure, in the County and in the, you know, in the past, this is the first time in my 20 years that the County courts have been closed. The Sheriff’s sales in the past, on the Thursday, before every Sheriff’s sale, the phone starts ringing, you know, can we file bankruptcy today to stop it The answer is yes, but for the last three months, we haven’t had any of that. I can tell you that in Lehigh County that goes back into effect for June.

delighters sales are back on in June a delay to the inevitable, unfortunately for some

Right. And, and really what’s happened is the list has gone. And again, these are semi made up estimated numbers. The list has gone from a hundred houses a month. We’ve been closed down three months. Well, now the next list just has 300 houses. So nothing’s changed.

So I would, I maybe should save this question for, you know, closer to 7:00 PM, but bankruptcy is not a death sentence. No, I have a car payment. I have a house payment and I have some medical debt. I have a list of credit cards. I come to see you. I don’t have to, because I asked you this question. One of the first times that we spoke, I have a reasonable chance of keeping my home. I don’t have to lose my home. Of course I don’t have to lose my car. Of course,

As long as you can afford to make the payments. There there’s some equity issues in certain occasions, but I will tell you they’re few and far between probably 90% of the folks that I meet with can keep their house and their car, as long as they maintain the income to pay them. We’re basically just getting rid of the unsecured debt, which in theory, frees you up to pay those things again.

But the fear of most people is if I declare bankruptcy, I’m going, they’re going to take everything from me and I’m going to be living on a box in the street. And it just is definitely a fear, but it just is not that way. Generally speaking

Is not that way. And as far back, as I know, never has been that way. I don’t know where that fear came from. I couldn’t put my finger on it, but it’s never been there.

We’re at the bottom of the hour on the East coast. This is the Kennedy effect on that other side of information and throughout various platforms across Facebook, including some of my, my own groups, my friends and so on and a shout out to the hot one Oh one family. I’m Jeff Kennedy. This is the Kennedy effect from may 24, 2020 episode four or five. I believe it’s actually going so well. I’ve forgotten what episode we’re on. My guest is my friend and bankruptcy attorney Charles he’s been in, he’s been in operation, had his license for 17 years, been in the, in the field since law school. And, we’re discussing personal bankruptcy. Some of the circumstances, a personal bankruptcy, and some of the policy and history behind bankruptcy. What can you expect if you have to file for bankruptcy, why would you what’s causing it

Things like that, Charles, what I make you, I tap you on the shoulder with Excalibur and I make you in charge of federal bankruptcy policy. We discussed earlier about the, that it’s just the middle income working. Low-income people who are taking it here. What would you fix Would you repeal the 2005 law Would you change the 2005 law Would you, what would you fix What I mean, when you think about the folks that come in and see you and you look them in the face and you have to break some of the bad news to them, you see the pain, you see the struggles. What would you, what if I could make you the Dean of bankruptcy in the United States What, or within the Commonwealth, what would you change

So honestly, the idea, at least the consumer effect of the idea of the 2005 changes, just like most things, government in theory, it was a pretty good idea. It is in practice. I just feel like it’s a little too rigid. I understand what they were trying to accomplish. And to a large part, I think it did accomplish curbing some of the abuse. but I think the way that it was structured is too rigid. There are not enough exceptions to the rule. So I think somehow I would try to figure out exceptions to the rule.

Are you saying that the, the, the formulas that we were talking about are too rigid Correct

I think the formulas are too rigid. Remember I said, it’s not, it’s not a bright black line. There’s some gray, some fuzziness to it, but I think that I, if I were in charge, I would make it a little fuzzier. And there’s something that we haven’t talked about yet. I know it’s on your list and maybe now is not the time, but the student loan issue something’s gotten,

Oh, please let’s have at it. Good. Okay. Excellent transition. Thank you.

The big issue is the student loan issue, right The, the problem that I see in bankruptcy is no matter what I can do, Excalibur magic wand, whatever you want to call it, no matter what I can do, basically I can’t touch your student loan. So there’s something called the Bruner test, right And the Bruner tests, if you want to Google it, or if anybody that’s listening wants to Google it to understand how you can discharge student loans and bankruptcy. The answer is through the Bruner test. And that is a case it’s in Ray Bruner. I have no idea what the numbers are off the top of my head, but I guarantee you, if you Google student loan pruner test, it’ll come right up and you can read for probably 10 to 20 days on the topic straight. but essentially what it comes down to is unless you are completely unable to work in any field related or in any way that would allow you to make some income to repay your debt, you got to repay it. So there are people that will say, well, student loans are dischargeable in bankruptcy. You just have to pass the brooder test. The problem is the test is a nightmare, right So,

You know, the bar exam of bankruptcy.

Yeah, exactly. So, so if you were to go to, the other thing is it’s not necessarily universal. This is also a regional quote jurisdictional thing. In some States it’s slight some jurisdictions. It’s slightly easier. Some sites it’s slightly harder, but I’m not aware of anywhere that it’s easy. I’m not aware of anywhere that you could move right now for a couple months, file bankruptcy there, get ready, get rid of your student loan debt and then move back to Pennsylvania. I’m not aware of that.

Let me ask you this then. Cause we can, we can easily ride out the rest of the show on this topic. I think in all like the head was there, the student loan problem or issue or whatever you want to call it, did that exist before the 2005 law

yeah.

Did it exist to the extent it exists now

No.

I think if memory serves me correctly, the real changes there were back in the late eighties, early nineties, but I’m not really well-versed in those changes because I was still in high school. and I just never went back that far because my, my practice of law is not really focused on prior policy. It’s focused on what do I need to learn today to help my clients tomorrow It will will,

Or should it come as a surprise to no one, we talked earlier about credit default swaps and the bundling of mortgages in Oh Oh four Oh five Oh six Oh seven. And selling them essentially a stocks that has been done with student debt. And it’s been done specifically because you can’t discharge it. It is a form of guaranteed income. If you own, you package up a bunch of these loans, you make a one type of commodity out of it and you sell it as a stock. You’re essentially buying that guaranteed income. And because you can’t discharge, it it’s makes those particular type of default swaps much more secure because you can not discharge that. was with Warren, talked in the campaign about going to a community college in Oklahoma that costs her fifth, $15 a semester. And she that old, well, she was going to college in the yeah. In the sixties because she’s 71 years old. I believe someone will. Some of them will certainly, correct me if I’m wrong.

She looks great for 71. Am I One of my favorite things is the skit with Kate McKinnon on Saturday night live where they’re both dancing, flipping back and forth. I love it.

Let’s see if let’s see if we all make it to 71 little, I look that good, right Yeah. But yeah, I believe she paid $15 a semester to go to a community college in Oklahoma. And now we have some institutions right here in the, in the Lehigh Valley that are, you know, Ivy league. What w what used to be Ivy league costs, college was not something that used to be for profit. It is now a for-profit industry and is not entirely about education. It’s about profit. And with that profit with those higher costs comes. So you have to pay for it somehow. And if you don’t scholarship yourself, by having near perfect grades, you take loans and those loans eventually have to be paid back. And that of course, is the student loan brings us to the student loan crisis. I believe the total, student debt regarding student loans now is that has eclipsed the $1.5 trillion Mark. Isn’t it just a coincidence that the Trump Republican tax cuts at the very beginning of this regime totaled over 1.5 trillion. It was closer to 2 trillion with 83 plus percent of the benefits going to the top 1% in the largest corporations. When in fact we just could have wiped out student debt. So student debt, as a component of the folks that you see is larger is certainly a component, if not the component, but yet there’s nothing they can do about it.

Correct. I would say that, like, have you had,

Have you had anybody that’s passed the Bruner test

I personally have had one person in 20 years and, and basically, you know, the way I like to describe it to some people and this, this is a little bit of an exaggeration, but the way I like to describe to people is if you had, you know, you went to college, you got, I dunno, a communications degree, and you got a great job at a television studio or a radio studio, and you’re making 60, 70, 80, $90,000 a year. And then one day you get hit by a tractor trailer on route 78, and you are paralyzed and your brain has lost function. You can get rid of your student loan debt. That’s about what it comes down to,

But it takes, just a minor little incident like that to get it done. Yeah.

Yeah. And then, and then it’s not part of a normal bankruptcy fee, right So, in addition to whatever it would cost to get rid of your regular debt, your credit cards, things of that nature, you then have to go to the court and you actually have to have a whole separate trial. You have to file a complaint against your student loan creditor in the federal court, and basically have a trial as to whether you are unfortunate enough or disabled enough, or whatever, your, whatever angle you’re going on enough to qualify. And that trial alone can cost, you know, w with the attorney’s fees, if it’s contested by the creditor, you look in somewhere between 10 and maybe 20, $25,000 on the higher end, $10,000 on the lower end. So, you know, and it’s a gamble, right But you can spend 10 grand and lose it still over the debt.

Well, I was going to, and that also presupposes that, you know, why would you have to go to court if you had the $10,000 to spend on court so it seems to be, that seems to be a bit of a downward spiral cycle as well. I wouldn’t have to go to court to try to wipe the debt out if I had the money to pay it. But yet I have to pay the 10, the 10, 20, $25,000 for court to try to wipe out the debt. But doesn’t, that seem like quite a cycle.

Well, and, and, you know, it seems like something that is possible for, let’s say a doctor who has $200,000 in student loan debt and then has a stroke, right So let’s say you’re a surgeon and you have $200,000 in debt and you have a stroke and now you’re handshake. Well, you know, how can you be expected if you’re a surgeon with shaky hands, to be able to repay $200,000 of student loan debt, the answer is maybe that’s dischargeable, but it also might be worth it. And you might have 10 to $15,000 to try, but then the court might come back and say, okay, well, you can’t be a surgeon anymore, but you can do this job in the medical field. You didn’t lose your, your doctor’s license. You just now, instead of making $600,000 a year as a heart surgeon, now you’re making $300,000 a year, right. But you know, $300,000 a year on a lifestyle that you’ve set up, you’ve got a wife and you’ve got six kids, and you’ve got the lifestyle you set up, and I’m not suggesting that people should feel bad, but how do you pay back $200,000 worth of student loan debt if ever, right.

I mean, we do see there, there are contemporaries of mine who are still paying. I I’m, again, I’m 50 that are still paying student loans. There’s, I’m sure there’s, I’m sure there’s contemporaries of yours that are still paying student loans.

I will tell you that I have a friend who, was a dear friend in college and law school. We ended up doing both together, which was fantastic. It just happened to our paths, went in the same direction after we graduated, he got a job with the federal government and he is a contract attorney in the federal government. And he still has student loan debt. 20 years later, I was getting close. I think he’s got it down. The last I talked to him, I think he said maybe 40, 45,000 left. And he’s getting close. By the way, if you’re that

Surgeon, I have to throw this reference in there for, for the geekier friends among me, including my friend, George, my a remote engineer. And it specialist, if you’re that surgeon, you’re Dr. Strange anybody know who Dr. Strange, come on folks. Dr. Strange, you’re a surgeon. You’re handshake. You become a wizard. That’s what happens. And you defeat and you defeat, you become a superhero, but that said, wow, thank you for getting that, Charles, you bailed me out. I gotta say, cause I don’t, I’m not saying I’m not seeing the comments running through, but we’ll say so what I know I asked you this and you did kind of answer it, but let me just circle back to the same question again, at the risk of being a little repetitive, what would you change You know, if you could, if you could do,

What would you say Something about student loan debt. That would be something I would definitely change that I had an opportunity while you were talking at the bottom of the hour to look up the legislation and to just review it real quick. 1978 is when student loan debt first became non-dischargeable. And I would argue that that’s probably when student loan debt started to become a thing, because college became less affordable student loan debt became a thing. And then everybody thought, Oh, well, we should let that go in bankruptcy. Then that was tightened up again. In the early nineties, it looks like 90. Why was right, right around there. 91 92 is when the higher education amendments were, were enacted, to further eliminate student loan debt. And then in 2005, they added an exception to discharge, meaning you cannot discharge qualified educational loan. So let me tell you what the 2005 change actually was. And then we’ll talk about how we change it. So it used to be money that you borrowed to go to school like to pay your tuition was non-dischargeable for the entirety of my life. If you borrowed it from the government, it was non-dischargeable for the entirety of my life. If you borrowed it from a private bank, but it was used for tuition that was dischargeable up until 92. And then that became non-dischargeable. Then in 2005, it’s that extra loans that became non-dischargeable. And those are the ones that actually cripple people, because I tell you

That would be the loans to fill in the gap between possible a scholarship or Pell grant or something like that. That’ll be the loans that I can. I got a scholarship for this much. I got a Pell grant for that much, but I still owe this much. So if I had a loan, I had a loan that gap,

The majority of that money is used for books and room and board. That’s where this extra money came in, right. In my opinion. And I’m sure there’s some of it for tuition as well, that doesn’t get covered. But the folks that I went to school with, the folks that I went to school with were borrowing this money to pay their rent so that they didn’t have to work while they were in school. Whether whether that was a good choice or a bad choice, it’s their decision. I had a job the entire time, but they were using it for their bar tabs. Some of them using it for their part tabs books, you know, gas to get home, pay their rent, pay their electricity by a PlayStation game. Cause you know, that’s the video essentially.

So college tool, I mean, let’s just be honest,

Depending on how you feel about it. But yes.

So, so it’s that my 2005 is what block that money. So now basically any money that you borrow as a student is non-dischargeable and that was a big whack in 2005, the study loans, right So if you’re going to be a professional, if you’re going to get a, you know, if you’re going to try and pass the bar exam right after law school, you got to go take another class to learn how to pass the bar exam because the bar exam, like any standardized testing, a whole separate topic, the bar exam, like any standardized testing has a methodology. And when you’re in law school, they’re teaching you law. Right The interesting thing about law school and it’s, it’s a lot like this is medical school too. They don’t actually teach you how to be a lawyer and they don’t teach you how to pass the test.

They teach you how to think like a lawyer, just like when you’re in med school, they don’t actually teach you how to be a doctor and they don’t actually teach you how to pass the board test. They teach you the theory behind the body and how it all works. And then you become a resident, right And when you’re a resident, just like the lawyer version is a law clerk. When you were a resident, when you’re a law clerk after you graduate, that’s when you really learn how to do the job. But anyway, you got to take loans for that stuff. Right So after you’re done with law school, you’ve got to take a loan to learn how to pass the bar exam and that’s 12 grand or whatever it costs that loan is now non-dischargeable anything that’s basically education-related and that’s the first thing I would change. You gotta get rid of that stuff. Private. So so-called private education loans should totally be discharged.

What about from the consumer side I think one of the easiest things that we could probably agree on, I would hope we could agree on would be increasing the minimum wage, increasing wages, generally increasing unionization, which tends to bring up wages and provide some sort of retirement, that, you know, it’s, it’s easier to dig yourself out of debt if you’re making more money. And I would think that’s something we could agree on. Yeah. What’s the minimum wage

We could do a show on the minimum wage. well, no, you know what it is.

Well, I did, we did say, I did say I was going to do this earlier, so thank you. you reminded me of something that you didn’t even know you were reminding me of. yeah, the minimum wage here in the, in the Commonwealth is the same as it is still, nationally, obviously some municipalities and States have increased at all of the municipalities and States surrounding the Commonwealth have done.

So, we are an Island still at $7 and 25 cents.

Which lots That, that might be the case, but I can’t believe how long ago I knew that. Like I thought it had to have changed to at least seven 85.

Oh, there you go. One of the beauties of it is that you learned it 10 years ago and it’s still valid. that’s, which is a sad statement in, and of it.

I don’t pay any of my employees minimum wage or anything close, so I’ve never

And to know, well then I’m going to run to your that’s, how I’m going to pay you. I’m gonna work for you. But, the seven 25 puts you still under the poverty line. Oh my God, you worked. If you worked 40 hours a week, it is seven 25. So I’ll put you under the, under the poverty line, by the way,

You can find a calculator to see what that even is federal

The federal poverty line. Again, somebody will correct me if I don’t remember it correctly. I want to say is in the neighborhood of grand a year. I think the federal poverty wage though salary, yearly income, wanna say as 18,

I think that’s right. I feel like I’ve heard 18 something. Yeah, it could be as seven 25, an hour, 40 hours a week as 15, one 38.

It could be as high as 23. But I think that minimum poverty line is in the 18,000 range. By the way, on a related note, if the minimum wage was pegged to worker productivity, it would be roughly $22 an hour. Now

I don’t know that I understand what that means. Can you flesh that out a little bit

It means that if worker pro, if the, if the, if the, the measurable statistic that measures worker productivity, if we start at seven 25, and if we were to tie the minimum wage to worker productivity, that means worker output is, is directly tied to increases in the minimum wage, the same way you could, could, and should at the minimum tie, the minimum wage to cost of living. If you tied it to the way social security is supposed to be tied to cost of living, but isn’t, if you tied the minimum wage to worker productivity, the minimum from the time that it made it to seven 25, it would be $22 an hour.

So you’re saying that workers are three times as productive now as they were

Getting to go and not getting paid well. So I know I take that back from the establishment of the, of the men from, I think if you took it from, I think 60, I think if you took it from 1968, I think it takes you to $22 an hour. Okay. Now there’s the worst sense to me Here’s the worst. Well, still I’d still take, I’d be happy to take the $22 an hour. Oh yes.

And I don’t care where you started. I’ll take the $22. I was just trying to figure out how the person who makes hamburgers at McDonald’s is making three times as many now as they were 10 years ago and the way that they are

Overseas, they do make 20, 20 to $25 an hour.

And that in no way, no idea how much they pay.

No I’m saying even at places like McDonald’s, they do make that kind of wage overseas because they won’t stand for it.

Tonight is I made four and a quarter

April just looked up for me to the federal poverty is 18,008, 50 per year. So when you and I were in that, we were in, right, but here’s the worst one. If you tied that same minimum wage To CEO pay, It would be $33 an hour.

Before Reaganism really took hold in this country. The average CEO made about, I want to say it’s 27 at the max times with their lowest paid worker that is now over 400 times with their lowest paid worker. Makes,

Say that again,

You have a corporation, you have a corporation with 500 employees, let’s say thousand employees, 10,000 employees. You’re the CEO of Walmart

Before

The Reagan administration put in, put what we generally refer to as Reaganism into effect the dismantling of the new deal, the dismantling, you know, rugged individualism and trickle down economics tax cuts for the rich. If we cut taxes will somehow increase revenue. I don’t, you know, I have four tires. If I take one off, I don’t get five. But, the, the average CEO made about 20 times, 24 times what their lowest paid worker made after 40 years of Reaganism that split is now around 400 times what their lowest paid worker makes. And inside some companies it’s a thousand.

I asked you to repeat it because that seemed to, I wasn’t sure I heard you correctly. Cause that’s such a,

It’s exactly policies like this 40 years of an outright economic war on the bottom 99%, that leads to many good and decent people to seek you out. And that’s not to say, you’re not doing anything wrong. You’re helping them. I have every belief in that. You’re going to help me eventually. But these are policies. These are the reasons why there’s always been bankruptcies. Even after the new deal. Even after the greatest economic peace time economic expansion in the history of the country, there’s always been bankruptcies and there always will be. But it’s these types of policies when we don’t spread things out, not perfectly equally, that’s not the kind of society we’re looking for, but at least a lot more fair and a lot more equitable. That’s what we’re looking for. And then your services may not be great for your family, but they wouldn’t certainly be needed at the rate that they’re needed.

And, and at least, hopefully not with the, with the incredible stress and desperation that some of the folks I’m sure come to you. I can only imagine, you know, we talk about, people coming to you because of medical debt or at least that being a component of it. I can only imagine you the stress, just the way folks are probably beaten down that you must see that come to your office. I can’t, I’m not, you’re a good man. I would consider us friends and yes, I’m going to need your professional services, but I consider us friends. I can only imagine when you’re just sitting on the other side of your desk and you see good decent people walk through that door and the weight, the S the, the stress that must be on them. It must, I wonder sometimes how you, how you deal with it.

Well, Jeff, that’s my favorite part of the whole thing is that there are, and I meet with folks and I can see how heavy their shoulders are and how burdened they are. And you know, some of the chapters in the book that I wrote the road to freedom, that the chapters are titled unburdened, and it goes through the 15, you know, the 15 things that are burdening you and how bankruptcy lists that burden. But, one of my favorite parts about this job is watching the stress melt away from my potential customers that then become my clients. Like people come into me with the weight of the world on their shoulders. They have no idea how they’re going to get out of it. I sit down with them, I offer them a free consultation. We talked for 45 minutes and I can already see their shoulders lightening up because there’s a plan.

They haven’t paid me a dime. They haven’t even made a decision what they’re going to do yet. I’ve just shown them a Ray of hope, right They go to the shoulders, go up a little bit. Then they decide they make a decision. This is what they’re going to do. The shoulders go up a little bit more. Now they’re standing a half an inch taller than they were. The first time they walked in my door. Then they hire me and we filed their case. We get them a case number with the court, and now they’re standing an inch higher. And then we go and we have their, their three 41 meeting, which is your bankruptcy court hearing. And that’s my favorite part. When we walk out that hearing and they realized that all of the fear, all of the dread that went into having the debt, thinking about the debt, the stress of filing bankruptcy, it’s all over. And they walk out of the courthouse with me two or three inches taller than the first, the first time I met them because they’re not weighed down by all of the stress. And that is literally one of my favorite parts of this, of what I do for a living. And I didn’t have to kick some other guy and get them that way. It’s just American express,

Right Well, you didn’t have to climb over, out over somebody else’s body to get to that, to get to that part. It’s, it’s just part of the service, Charles, believe it or not. And hopefully you are as surprised as most of, as all of my guests have been. It is the top of the hour at 7:00 PM Eastern time, we just did two hours. You and I, and my friend, wow. Back go

Very quickly. I feel like it was about 25 minutes.

What I want to ask you to do as we wrap up, we generally wrap up at seven o’clock. So we will do so, you know, roughly here, tell everyone how they can get hold of you. Where is the office phone numbers, websites, Facebook page. Tell me, how do we get ahold of Charles LaPook if we need your services.

Absolutely. I’m happy to do it. And thank you very much. the, the answer is you can get a hold of me pretty much any way in 2020 that you can get ahold of someone. my, my office phone number is (610) 477-0155 (610) 477-0155. you can call that from nine to five, Monday through Friday, somebody will always answer the phone. I have a wonderful and large staff, to make sure I always get answered

Just by the way, I’m going to let you finish. But Jennifer, by the way is incredibly compassionate. She’s just a nice person. She knows. She knows why you’re calling and her patients. She’s got a soothing tone to where, I mean the whole nine yards she does.

She’s wonderful. She’s been doing this for 20 years as well, by the way, I hope that doesn’t offend her by me explaining how old she is, but she’s been doing this 20 years as well, and she is phenomenal. you can also visit my website on my website. I’ve got a lot of great information about bankruptcy. That’s also coincidentally, a place where you can get a free copy of my book. You can get an ebook right now. If you go to LA law.com, that’s L a P U T K a L a w.com. So law.com. If you Google Charles Allentown or Charles Lupica bankruptcy, I’m sure the first five things that pop up will be a way to get in touch with me. I’ve also got a Facebook page that you can request the book on lots of great information on my website. I’ve got a lot of great videos, a YouTube channel with a lot of great videos.

I really have been able to use the marketing to get out there. I’ve got a few billboards around the Valley. I’ve got some commercials on cat country and the Hawk. and really, because I think now is going to be a time of need for a lot of people for planning, right we’re we’re going to start doing some television commercials on WFMT here within the next month, because I think there are a lot of people out there with questions. And I honestly, this is, you know, believe me or don’t believe me. If you knew me, you would believe me. I honestly want everybody to know what their rights are. Okay. I don’t care if you hire me to file bankruptcy. I probably care if you come to me to file bankruptcy and then hire somebody else for gosh, knows what reason, but, I don’t care if you come to me, learn about bankruptcy and I tell you another solution and you choose to run with it.

That’s great because I honestly believe that givers get, so I’m willing to give my time to explain to everybody how their situation works with bankruptcy, or I should say how bankruptcy works with their situation, whether you decide to do it or not. Doesn’t matter. All that I ask is if you, if it’s not for you or you decide that you don’t want to is tell somebody else about me, because there are lots of people. There’s plenty of people in a Valley that need my services. I just want to make sure that those folks can find the right man and the right team for the job when they need our services.

And it isn’t just the strict law type thing. I mean, this is, you know, I’m sure you do a lot of listening in this business. I mean,

Well, that’s part of what you sign up for as an attorney. You’re you’re part therapist, part attorney, part therapist, part friend, you know, you, you were talking about it before about unburdening. One of my favorite things is the amount of hugs that I get when we walk out of the courtroom is pretty awesome. I’m a hugger. And I think it’s one of the things that I’m sadly going to miss, you know, until I, I don’t know if the world has changed forever as a result of COVID-19, but in the near future. And for the last two months, I have really missed some post court hugs in the hallway.

You got, you got me out. I’ll, I’ll take that risk. Cause that’s how I am too. I’m a hugger too. I just is what it is. I just, it just is. I don’t know, Charles, last, last thought from you before we say good night, you know, you gave us all the contact information. I, I did post some of it, post some of it in the Facebook. I can continue to post it, after, as we go, I got your number and website in there. you’ve shared the stream too. So other people will see it again. We’re, we’re crossed so many different groups and platforms. what’s your last, there’s one overarching last thought, last word. You know, whether it’s don’t be afraid or we can help or you’re not alone or because all of those things are true. Leave everybody with a last thought before we sign off and say, good, absolutely.

Jeff, and thank you very much. It’s been a pleasure. And the last thought that I’ll leave everybody with is if you’re struggling financially, even if the word bankruptcy scares you, you know, it’s not the only thing I do here. And I can promise you that if bankruptcy, if bankruptcy is your only option, I will tell you that, like, if you come to me on a Wednesday and your house is going to be sold on a Friday at a foreclosure auction, and you don’t want it to be sold, let me tell you, you don’t have any other options other than coming up with all the money to pay the bank in 24 hours. So unless that is your situation, there are often times where I will meet with somebody and I will give them anywhere between probably three and five options is the average. and of course, the longer you wait, the less options you have from the very first moment that you can’t pay one of your bills.

If you come to me then, or if you think you can’t pay your bills next month, that’s the time to come to me. Don’t wait until you stop paying them for two and a half years. And now your bank account’s been levied or your house is in foreclosure because then your options are very limited. Come to me at the beginning, find out what five options you have. Stay in touch with me, heck try two or three of them. And if they work out great, if they work out, give me a good Google review. If they don’t work out and you have to come back and we file bankruptcy, we’ll do that too. And give me a good Google review. But you know, the, the, the moral of the story is don’t. Wait, if you think that there’s a point, if you think there’s a chance, you can’t pay your bills next month, come to me and find out what happens if you don’t

Be preventative. In other words, don’t, don’t wait till you’ve got the stack on your desk of past dues, credit or calls. We’re taking you to court. All that fun stuff. Act a little bit of shit.

Health financial health is just like physical health, right The same people that have mental health or mental health, right The same people that have problems. If those problems are left unchecked or untested or unresearched, all they do is compound, right If your shoulder has been hurting for three months and you haven’t gone to the doctor, guess what You probably have less options to get it, to stop hurting than if you went three months ago, same thing with not paying your car loan. You know, if you’re same thing with mental health, if you’re, you’ve got to, you’ve got to find out what your options are. So if you choose to go to the doctor, when your shoulder starts hurting, he’s going to give you five ways to fix it, right Maybe do some exercises, maybe some late, late weightlifting, stretch it out and work it back up. You wait a year. You’re guaranteed that rotator cuff surgery, cause there’s no other option at that point, everything, everything, all of the options are available on day one, wait a year later, and you, all of your options may have disappeared,

Preventative medicine, so to speak or this case, preventative, preventative financial advice. Don’t wait until it’s too long. Remember Charles is telling you flat out, even though this is his business, this is how he makes a living. If you go to him and you don’t need him great, good for you. It’s an option. Check out your options, more your options.

There’s plenty of people that need me. And if you’re not one of them, you know, somebody who does. So I, if it takes, you know, if it takes me to meet with you and help you to get a client in somebody, that’s your friend or family member. Great. It re I really, honestly, when I offer our free consultation, it is zero commitment. I mean, we’re going to call you, right So you come in, you have a consultation with me and you say, you’re going to think about it. And a week goes by. I mean, I’m going to call you a week from now and say, Hey, what do you think Do you have any followup questions Like from that standpoint, that’s going to happen. That’s business, right But if you really, if we call you and you say, you’re thinking about it, then we’re going to call you again a week later, I’m going to send you some emails. But if you, if I call you a week later and you say, you know what Bankruptcy is not right for me. Thank you very much. I no longer want your services that we don’t call you again. So there, there really is no obligation,

Charles, two hours, my friend. How about that Wonderful Jeff piece of cake, piece of cake. And you thought law school was tough. This was nothing. This was nothing than ice. Iceland. I sincerely want to thank you for being here. I know taking out two hours or actually two hours plus because you know, we started a little bit early to make sure all the technical parts are working. I want to thank you for taking about two and a half hours out from your family time on a Sunday to be here with me, with my listeners and viewers and followers and so on. It’s incredibly important, information. It just is kind of one of those things you wish you didn’t have to use it. but you do. It’s a reality in life. And when you want to, or when you have to use a service like this, you want to go to the right human being. And that’s one right there. Not just you, don’t always just want, you know, skill and knowledge. That’s all great. But you want a human being with you on the other side of the desk, looking at you and treating you like you, you haven’t committed a crime. So, thank you again for being here, especially for taking all the time. And, I’ll be talking to you soon, my friend.

Thanks, Jeff. Have a wonderful evening, have a great Memorial day.

Thanks so much for all of the folks who have served our country. Thank you. This is Memorial day weekend. I think COVID has actually changed the way a bit that we look at Memorial day. I think sometimes too often, we look at Memorial day as a nice three-day weekend. And the unofficial beginning of summer, since a lot of us have been home and every day starts to look like the next Memorial day becomes a very special thing. It is not just a day off, but a day to remember, and in an, you know, in a sort of way to celebrate my dad was in the military for 37 years and my brother for over 20. And, I, it wasn’t for me and they never judged me for that. And for all the people who are aren’t in the, who are in the military, the families who maybe aren’t in the military, but serve right along with the family members who are in worry about them from day to day, who watched them pack up for the two weeks in the summer and the national guard and the one weekend a month.

You know, we thank you all as well. It’s an important day. It’s a day off for a lot of people today to be with family. It’s a day to, you know, take an extra day off and relax and regather ourselves before we head back out into the work world. But let’s remember what the day is really about. Memorial day is a very important day and, our thanks and our memories and our sympathies to those who have lost our sympathies to those of lost through COVID our sympathies to, you know, in our, in our memories and our heartfelt thanks on this Memorial day weekend to everybody who has been with me for this episode five, I want to say, we’re doing this so much. Now it’s just become an old, it’s become an old hat kids. thank you very much for being here. Every single person who stopped in and who watched for five minutes, who were stayed for the entire length, you are valued. You are welcomed your opinions and are respected, and you will be heard here. You have a home here through all of the various Facebook platforms, pages, groups, and so on. Who watched today. Thank you very much. We invite you all to visit that other side of information. That is the homepage for the Kennedy effect, and we will return next week by PM. You’ll have an announcement during the week for our guests, and I will talk to you then everyone

Have a great night.