Thursday, December 3, 2009

The Seven Habits of Highly Unsuccessful People* (a "How To" for Going Broke)

I'm old enough to remember Romper Room -- a kids show on TV back in the dark (as in "black and white") ages.  Romper Room had a regular segment called something like "Do Bee vs. Don't Bee" -- the idea being that you should be a "Do Bee" (generally exhibiting good character traits, and avoid being a "Don't Bee". 

Well here's a tribute to that Do Bee vs. Don't Bee segment, except that these mostly "Don't Bee" examples rolled off my laptop this morning as I was thinking about some bankruptcy clients.  If you want to go broke and end up in bankruptcy, here's some helpful pointers based on my years of experience:
  1. DON'T bother opening your mail every day -- especially not your bills or bank statements or anything from the IRS. If you don't know about it, it can't ruin your day, right?
  2. DON'T balance your checkbook -- it's just a bunch of depressing stuff anyway. Certainly don't keep a running balance in there -- what a buzz kill it would be to know that you're about to incur a bunch of service charges!
  3. DON'T do a monthly budget -- just send out the money as it comes in. Bills come in, money goes out. What's the difference? They all gotta get paid anyway. Don't worry about prioritizing with your food, shelter, transportation and clothing and savings first. If you take care of Master Card, they'll take care of you!
  4. DON'T worry about saving any money. If you have an emergency, that's what Visa and Master Card are for. Besides, there's always tomorrow and you've got a good job, right? Trust me, it'll work out.
  5. DON'T waste your money on health or disability insurance. After all, you're healthy right? You don't smoke or eat too much, and you exercise regularly. (Didn't I see you at that 5k run last week?) It's not like you're ever going to end up with a serious illness or get in an accident or anything. That'll never happen to YOU.
  6. DO get as much car as you they will let you finance. (Leasing's a good way to do this. Why drive a beater when you can drive a "Beemer"?) You need something "reliable" -- and that means "new". Besides, your car is a reflection of you and your status in the world, and you deserve it.
  7. DON'T use cash -- put it on plastic. After all, you can use Visa's money for 30 days or so, preserve your own cash and pay it off in full at the end of the month. So what if they're betting that you forget to pay it off -- you're WAY smarter than they are; they're just a dumb ol' Fortune 100 company.
If you've been a "Don't Bee" for awhile now and want to turn it around, send me an email at or call me toll free at 918 409-2462 by clicking on the "Call Me" widget in the left corner of this blog page. I promise you that I can help with compassionate and sensible advice, that doesn't talk down to you or make you feel like a child.

After all, this isn't Romper Room anymore.

*With apologies to Stephen Covey.

Ben Callicoat
918 409-2462

Friday, October 30, 2009

Real Garnishment, Real Life: Can the Bank Really Take My Kid's Money?

Some clients were in the office and were consulting me about some business debts they'd personally guaranteed from a failed business. Facing the prospect of multiple lawsuits, they wanted to know if a bank could garnish their son's bank account.

"Can the bank really take my kid's money?"

The answer is "YES" -- any time two or more persons share a joint bank account, they both (all) own 100% of the amount in the account. Therefore, even though the kid has earned every cent in that account through a long, hot summer of mowing lawns, if Mom or Dad's name is on the account it is subject to being garnished to pay Mom or Dad's debts.

In other words, even though their teenager has spent his entire summer slaving away mowing lawns, and even though Mom and Dad have put precisely NONE of the money that currently exists in sonny boy's bank account, the mere fact that Mom or Dad's name is on the account with their son, means that the entire amount is subject to a creditor's garnishment action. This is because a joint bank account (and its contents) are owned jointly and severally -- meaning that all named account holders hold the money equally, whether they contributed to its contents, or not.

To illustrate, it's helpful to understand garnishment as a legal tool used to collect assets from a third-party (such as a bank) holding someone else's money or property. Stay tuned for a post about garnishment next week, and the landmark legal battle of Popeye vs. Wimpy.

Member, National Association of Consumer Bankruptcy Attorneys