Bankruptcy Attorney Denver

Meet Paul, a young man with ambitions to help kids and a willingness to take the necessary steps to get his teaching degree.  Through a series of bad choices and bad luck, Paul winds up at our office with some pretty bad financials.  He decided to go to a private school, thinking this would allow him to get a job when he got out of school.  When looking at his finances, this is what we saw…

$94,000 in Student Loans (About $500 per month with his current structure)!

$9,200 in Auto Loans (About $250 per Month)

$12,400 in Credit Card Debt ($300 per Month Minimum)

$700 per Month in Rent

$600 per Month for Food

$400 per Month for Medical (Depression and Stomach issues) with a backlog of $11,000.

$100 per Month for Cell Coverage

$500 per Month for other incidentals (such as Cable, Clothing, Gym Membership, Toiletries, Entertainment)… 

Monthly Income — Private Christian School — ($2,200 per Month after taxes)

So, when he walked in, he was outlaying about $2,950 per month, but only bringing in $2,200.  Not a good start.  Some people will want to immediately talk about bankruptcy, but this is a case where some common sense and lifestyle changes were drastically needed.  Paul had some good computer skills, but didn’t really capitalize on these skills being so challenged with his budget.  The first thing we had to do was to look and see what the POTENTIAL could be for Paul if he re-structured…  So we worked out a budget where he had these payments, while hopefully eliminating harassing calls and get him in a better position…

Student Loans (Defer– With no penalty due to hardship)

Credit Cards — Worked the Interest Rate Down (Was at 26%) — Kept same payment — $250

$9,200 in Auto Loans (About $250 per Month)

$700 per Month in Rent (Had 2 Rooms, recommended a roomate –$350)

$350 per Month for Food

$100 per Month for Cell Coverage — Changed plans to a $50 per month plan

$500 per Month for other incidentals (such as Cable, Clothing, Gym Membership, Toiletries, Entertainment)… Reduced to $300 per Month.

New Totals:    $1,600 outlay

Income: $2,200

There was still work to be done, finding grant money for the schooling, helping to keep track of the budget, but what Paul needed was not bankruptcy, just some better habits and a little counsel.  Within a year and a half, the credit card debt was gone.  The car is almost paid off and there were forgiveness plans available on a large part of his student loans.  We will not always rush you to bankruptcy when good alternative habits are available, sometimes though, the hole is too big and we need a fresh start.  Medical bills are a big culprit for us when clients have bills so astronomical, they’ll never catch up.  Paul had a bad situation, but it was manageable, others take his situation and triple the liabilities which is impossible to fix with “re-arranging”