Chicago Bankruptcy Lawyer
Q.My lawyer husband let his obsessive-compulsive, passive-aggressive, possibly schizophrenic partner talk him into a long-term lease on an office costing over $7,000/month. Then the partner proceeded to run off all the associates and most of the staff by being extremely obnoxious and verbally abusive to them. My husband was so desperate to get him out that he bought out the partner's interest, leaving my husband with the lease. After a year, my husband was able to sublease about half the space, but that was still way more than he could afford to pay. He has not felt good, and he hasn't been thinking clearly. Unbeknownst to me, he has been just breaking even with his business for the past 3-4 years, and in order to bring home money, he's been using credit card draws. I had no idea what was going on until I was unable to use my credit card one day, and I did an on-line credit check which turned up $155,000 in unsecured credit card debt. We also own a house worth about $230,000, which has a $95,000 mortgage. We have 2 cars, neither of which is paid off. We also have money in retirement accounts, I'm not sure what they are, but I think they are worth about $200,000. I am looking for a job, but I've been out of the market for quite a few years, so it's difficult. I am reluctant to borrow against the house, given my husband's past history. My husband is now under a doctor's care, and he's feeling much better. When his diabetes was uncontrolled he was only billing about 4 hrs. a day, but now he's been billing 7-8 hours for the past 2-3 months. He has also moved his office, bringing his lease payments down to about $1700/month. If I can learn how to use Quick Books and Time Slips, we can let the bookkeeper go, saving us another $1500-2000 per month. We're thinking about Chapter 13, but I'm not sure we could handle it. We are not behind on any unsecured debt, so right now the house and cars are safe, but we've just decided to quit paying all the credit card companies and see what happens. Any advice???
A.Before assuming that bankruptcy is the best way out, I advise doing whatever you can to negotiate down your debts and find out for sure whether bankruptcy is unavoidable. It doesn't always work out as cleanly and simply as a person might hope. Also, in some situations the courts may be influenced by whether you seemed to approach bankruptcy with good intentions or were instead looking for an easy way out. In particular, I would consider talking to a non-bankruptcy attorney, preferably one with contract law expertise (see www.martindale.com), to determine whether your husband's reduced capacity would provide grounds to back out of any of his recent, ill-advised expenditures. Also, in any event, you may find that some creditors will be very amenable to negotiation if they fear that you are considering bankruptcy, which for all they know may leave them with nothing at all. You can also probably find more info in newsgroups on how to negotiate with specific creditors, if you use the right advanced Google.com search. I heard somewhere that a surprisingly large percentage of Ch. 13 filers do not succeed in making their payments for the entire 3- to 5-year plan. Aside from all the other suggestions I offered before, you really should be having at least the introductory conversation with a bankruptcy lawyer AND doing some serious reading on exactly how your bankruptcy options work. I wouldn't dawdle. If you can't find a lawyer willing to give you a free consultation, try another town. If all else fails, call your city or state bar association (or the ABA in Chicago), or look at their websites, and see what they can recommend. If you can't figure this out and you wanna cough up which state you're in, I'll do a web search for you, next time I'm in this vicinity.
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