Finance Friday: Lawyers

**Disclaimer: I am not certified to give legal or financial advice. This is simply an explanation of my process. The ideas contained here are my own opinions.**

I had a reader post a comment, in reference to my bankruptcy post, asking about how to find a good lawyer. This actually isn't the first time I've had to go though the process for finding a lawyer. The first time was with some legal issues that my husband had. But, we still went through the screening process to find one we wanted to work with. I tried responding with a short comment, but after about 4 paragrahs, I decided to just make a post about my process. Then I could add in other details!

I feel very fortunate to have immdiately found a lawyer that I felt comfortable with for my bankruptcy. Not only am I admitting to this person that my financial skills have failed, I'm revealing all sorts of personal data to them. By the time you're done, they have a copy of your driver's license, Social Security Card, pay stubs and bank statement for the previous 6 months, a copy of your credit report, and just about everything except your first born child!

My process was pretty simple. I opened up to Bankruptcy Lawyers in the yellow pages, wrote down a few names, and started Yahooing (like Googling, but only with Yahoo) them to find out any other information. Some bigger law firms have websites which allow you to do everything online. Secretly I was hoping to find one of those. I don't think I was ready to admit out loud that I was a failure. I didn't find exactly that, but I found a small website and an email address for a local lawyer, so I decided to do the rational thing and email him. A day or so later, he emailed me back and told me he wasn't taking bankruptcy cases anymore. He then referred me to a friend that was doing bankruptcies.

I had to summon all the courage I could in order to pick up the phone and call this guy. I'm not sure why, but talking to strangers on the phone gives me mini panic attacks. My hands start shaking, my voice cracks, you get the idea. Just picture a 13-year-old boy trying to talk to the cute girl he likes at school. That should about sum it up! Maybe it's because I've been trying to avoid creditors for years now? A sort of Pavlov's Dogs type thing? I've talked to so many creditors (strangers) over the years that calling strangers makes me freak out?

I finally did call the guy (without a dial-and-hang-up fiasco) and was able to just leave a message. Phew! Bullet dodged. Anyway, he eventually called me back and we set up a consultation appointment.

The first thing I noticed, and liked, was that he was very good-natured and made a very awkward and uncomfortable situation into an easy going but still serious meeting. We even laughed! So when you're screening lawyers, make sure to ask if they offer a free consultation. Most worthwhile lawyers will. In my opinion, if they don't, then move on to the next guy. With bankruptcies, the initial consultation is to see where you're at to see if filing bankruptcy is really necessary. At my consultation, my lawyer told me of a guy who was living on Social Security and wanted to file bankruptcy because he couldn't afford to pay his debts anymore. He told the guy that he shouldn't file bankruptcy because he was judgement proof - Social Security wages can't be garnished and the creditors wouldn't be able to do or take anything. He should save his money for something else. To me, that was pretty cool that he would tell the guy not to do it, even though he could have taken the guy through the process just for his own profit.

Unfortunately, for most people, it comes down to price. How much does the lawyer charge? How much am I going to have to fork over to some yahoo who may or may not do what I want him to do? Very few people, whether facing criminal issues, divorce, bankruptcy, or anything else, have the ability to shell out $1500 - $4000 as a retainer fee. And, as with any product out there, higher price doesn't always mean higher quality. You need to know, upfront, how much they're charging you. And, after they've used up the retainer, what are their fees? I'm not sure if you know this or not (I didn't when we started the legal process with my husband) that the retainer is not expected to cover all of their services? That's their upfront fee and then you have to pay them for everything else after that. After the $2000 retainer fee we paid for my husband's lawyer was used, we still owed almost another $2000!!! They charged for every minute of every phone call and even the simple intake of any paperwork we sent them. Those are things that I/we didn't know about.

You're also more likely to find better rates if you go with a single, more unestablished lawyer rather than a law firm. For instance, the lawyer I have right now doesn't have to worry about costs for renting or owning a building. Instead, he borrows the conference room of a local law firm. Those savings get passed on to me, in the form of lower retainer fees, filing fees, etc.

During your consultation and at anytime with the lawyer that you choose, DO NOT BE AFRAID TO ASK QUESTIONS!!! They've spent years going to law school and you're paying them a small fortune. You have every right to ask questions - no matter how silly you think they think you are. You need to be informed about every aspect of your case. Make sure to get copies of all documents and forms.

Talk to others about reccommendations - good and bad! Finding out the bad is just as important as the good. Like I said before, this is someone you're trusting with very personal and confidential information. You need to feel comfortable with them. And you don't want to get stuck with someone who's going to screw you over.

A couple of side notes directly related to bankruptcy cases. You can handle the bankruptcy yourself or work with a "pro-se," or someone who is qualified to help you through the process. You still do the work and the filing yourself, but you get a little help along the way. However, the bankruptcy process is very technical and must be done in a very exact way. You can read more about filing for bankruptcy without a lawyer at USCourts.gov.

Also, beware of scams claiming that they can erase your debt, even when they claim they can do it "legally." Beware of companies who claim that they will negotiate with your creditors for you. There are a lot of companies out there that will claim they're working with your creditors, that you should pay them, and then they'll distribute your money. Chances are, they're just going to be taking your money on a monthly basis and you'll continue getting calls from creditors.

Do you have any additional tips for finding a good lawyer (for any type of legal case)?

Finance Fridays: Taking Control & True Confessions!

***I wrote this post last night and scheduled it to post next Friday, but for some reason the schedule feature didn't work, so it's already posted. Oh well, I guess. You get to enjoy it earlier!***

Since we were married, I've been the self-proclaimed budgeter. I've been in charge of over seeing and balancing our budget. It's been pretty darn easy, if I do say so myself. My secret? I haven't really done it! Ooops! I should explain that a little more though.

When we were first married, we were both working and had *some* disposable income. We didn't make outlandish purchases or go overboard with our spending by any means. But we never sat down to make an official budget either. I take that back. I did make one before we got married to prove to my then fiance that we could make it work financially. I think I still have that spreadsheet somewhere, but I likely wouldn't be able to find it again. Back to the present. My husband has said multiple times over the years that he would like us to plan our budget a little better and that he'd like to *GASP* start saving and possibly *GULP* start investing. I would tell him I had it under control and then inwardly cringe while making a subtle topic change. I never followed through with creating another budget.

My reasons for not including him in the money are, quite frankly, embarrassing. Here come some true confessions! I had some old debt that I was still paying that he didn't fully know about. And after our son was born, we had a pile of medical bills. We were uninsured and, for some reason, didn't qualify for Medicaid. I wasn't cleared by the doctor to go back to work until 12 weeks post-partum and I didn't want to go back to work. The thought of leaving my baby kept me awake at night and gave me severe anxiety and depression. I just couldn't handle the thought of trusting someone besides my husband or my mother with my child. But my husband was going to school full-time and working full-time. We couldn't arrange our schedules so that when I worked he was home and vice-versa. My mom also works full-time during the day. In order to keep the job I had, I had to be available to work mornings and weekends. And in order to do that, we would have to find a babysitter. I did my due diligence and looked into childcare for our son, but it just made sense to stay home. I was previously working about 20 hours a week making about $8.00 per hour.

So 20 x $8 = $160/week - $30 for taxes = $130/week. The babysitters I looked into were going to charge around $75-100 a week for a 3 month old. So $130 - $100 left us with an extra $30 a week, if we were lucky. I was also nursing our son and pumping was NOT working, so we would have had to switch to formula. We did participate in WIC and I received food benefits for nursing that could have been switched to formula. But then we wouldn't have received the food benefits and would have had to start paying more for groceries. It just didn't make financial sense for me to go back to work. I either needed to find a higher paying job or we needed to cut costs. We'd both said that we wanted me to be able to stay home and care for our child(ren), so we decided to see if we could manage on one income. It was working during my maternity leave, so I made the decision not to go back. I started looking into doing childcare in my home. I interviewed with a few people over the last year, but it hasn't worked out for one reason or another. So I've been cutting costs as much as I can. I've also been doing surveys and product reviews to bring in some occasional cash (maybe an extra $400-500 per year). Of course, all of these decisions were made before I started getting calls from creditors asking about their money.

Anyway, I tell you all of that as a bit of background for our financial situation. I avoided telling my husband about our looming medical bills and my past credit debt because he would freak out. He would probably insist that I find a job and even now, almost 20 months later, I still get very anxious and upset about leaving my baby with a sitter for more than a couple hours. But I've recently made some HUGE financial changes.

On March 1st I was served with a court summons for the bill from our pediatrician. I spent a couple of days agonizing over what I was going to do. This wasn't what I expected it to come to. I don't know what I really expected it to come to, but this wasn't it! I thought about moving in with my parents so that we could start making a serious dent in our bills, but it was still just too much. Everyone wanted at least $100 a month from us. My OBGYN even wanted $300 a month. We couldn't afford all the monthly payments and, most definitely, couldn't afford to be sued for these bills. One night I was scanning my junk mail for any important messages that were wrongly directed and saw an email from "the bankruptcy experts." It immediately caught my eye. It wasn't something I'd considered or even thought of. It's not like I'm a bad person and intentionally made sure we couldn't pay these bills. The bulk of my debt comes because we were uninsured when I got pregnant and couldn't afford the outrageous bills. I had also incurred some debt from when I was traveling for work. I had to pay for it up front and the company would reimburse me. They did reimburse me, but I was also trying to go to school, so I used that money for school and living expenses instead of for paying off the travel expenses. Stupid mistake, I know. What's crazy is that some of the stuff I was still paying for is debt I incurred in 2003 and 2004! I'm still paying on it 6 or 7 years later! That's pure insanity!!!! I WANTED to and INTENDED on paying these bills, but the math just wasn't working. I considered, researched, and did some major praying about filing for bankruptcy. And I finally came to the conclusion that this is what I needed to do for me and for our financial situation.

My credit was a wreck - the bad far outweighed the good. I didn't even bother looking at my credit report or score. I knew it wouldn't be pretty. I also knew that some day we would want to have a house of our own, we'd eventually need to get a bigger car, etc, etc. These things wouldn't be possible if my credit score was 0! But if I could start over and start rebuilding my credit, we would have a very good chance of being able to have these things with decent interest rates and monthly payments. So, I took the plunge and found myself a very decent and respectful lawyer to take my bankruptcy case. I officially filed less than a week ago and it's been a wonderful decision so far. I don't have creditors calling 3 or 4 times a day! I don't get a nervous twitch every time my phone rings. In fact, I can actually turn the volume up and not fear that a creditor is going to call and my husband will answer and end up talking to them. It's such a relief. It wasn't an easy decision and hasn't been an easy process. I had to make a list of every creditor and I had to actually get a copy of my credit report. It was hard, but not as hard as avoiding debt collectors or lawsuits! The process isn't over, but I'm on my way to getting a fresh start. And it feels wonderful!

In fact, it feels so wonderful that I actually sat down the other night and made up a spreadsheet for our budget! How awesome is that. What's even more awesome is that without all the debt payments we'd have to make, our budget actually balances and we have enough left over to start saving. It's a small amount, but it's something. It felt so good to be able look at the numbers and see that we weren't going to go broke!

I know financial issues can cause a rift between partners and is one of the leading causes for divorce, so I just want to urge you all to get your finances in order. It's something you need to do whether you're married or not. Learn to live within a budget Do what you need to do to make your budget work so you're not living off credit and incurring more debt in the process. Live within your means! This is something that I've been taught over and over, and now I have a chance to make it work.

So my plan, to keep me accountable, is to update about how the budeting is going. It will just be a once a month post (either at the beginning or end of the month) to see where I'm at and make sure I'm actually using the super awesome spread sheet I created. We wouldn't want it to go to waste, right?

Finance Fridays: My Financial Goals

Since my original post with the outline of all my goals, my financial goals have evolved a bit. They originally included the following:

1. Continue budget shopping, using coupons, clearance sales, etc to be able to cut our grocery budget by another $10 over the course of the year.
2. Save for a new car seat for Monkey Man.
3. Save for new tires for our car.
4. Cut out all unnecessary expenses from our budget.

But now, I'd like them to look like this:

1. Continue using coupons. clearances, sales, etc to cut our grocery budget by another $10 over the course of the year.
2. Start a savings plan. Specifically to save for new tires, car repairs, a home, and a new car.
3. Cut out all unnecessary expenses from our budget.
4. Plan and follow a written budget.
5. Include my husband in the financial aspect of our lives.

Why the changes? Well, we already purchased a new car seat for our son. It was a necessity. He was very close to the limits on his old car seat and it was just plain uncomfortable for him. I ended up compromising a bit and going with a car seat that was still safe, but wouldn't last as long (height and weight wise) and was cheaper. The one(s) I wanted ranged from $140-$170. They would have let him rear face until about 35 or 40lbs and then lasted him front facing until he was about 5. The one I ended up getting will last him until he's about 3, he'll be able to rear face until he reaches 30lbs, and I only paid about $40 for it using a coupon at Kmart.

Also, I decided that it was impossible to eliminate unnecessary expenses if I didn't know what they were, so I felt that taking steps to create a written budget needed to be added to the list. I've also felt that saving is especially important, so I added that too.

So, I'll be moving forward with my new Financial Goals!

Continue Using Coupons, Clearances, Sales, etc to Cut Our Grocery Bill by Another $10 Over the Course of the Year

Right now I spend anywhere from $30-$50 a week on groceries, depending on what's on sale and what I need to stock up on. That also includes diapers, paper goods, hygiene needs, cleaning products - basically everything to make our household run. In my opinion, this isn't bad. I've known and heard of other people that are spending upwards of $100/week to run their household - and their household is smaller than or the same size as ours. Before we had our son, I really wasn't too worried about staying below a certain number. I bought what we needed. We had two incomes and had plenty. I don't think I ever spent $100 or more, but I was usually between $60-75 for the two of us. My husband was actually surprised to learn how little we were spending considering how much food we have.

Start a Savings Plan

There are many things that we'd like to have that we don't have the money for immediately. Larger things, like a house or bigger car, are not necessary at the moment. We're not at a point in our life where we can settle down with a house or that we need a bigger car. But these are things that we can start saving for. By the time we're ready to buy a house or a bigger car, we most likely won't have enough to pay cash, but we can have a large enough down payment to ensure a better interest rate or enough to bring our monthly payment down.

Specifically, we'd like to save for the following: a house, a bigger car, new tires (will be necessary very soon and our car uses a rare size tire which are expensive), future car repairs.

1. We were set up with a savings account at our bank. We have the ability to automatically transfer money directly from checking to savings. I'll definitely be utilizing this.
2. I need to create a budget to figure out exactly how much we CAN save.

Cut Out All Unnecessary Expenses From Our Budget

We don't really have a lot of unnecessary expenses, but I'm sure there are still things we can cut out.

1. Create a budget to help figure out where are unnecessary expenditures are and where we can cut back.
2. Track spending for 1 month to help aid in finding unnecessary expenditures.
3. Eliminate them!

Plan and Follow a Written Budget

Pretty plain and simple. Though in order to create an accurate budget, we need to track every single penny that we spend for at least one month. That way we're not planning on spending less than we should, or more than we need to.

1. Create a preliminary budget for now.
2. After tracking expenditures for 1 month, reevaluate and recreate a more concrete budget.

Include My Husband in the Financial Aspect of Our Lives

This might seem a little silly, but there are some things in my financial history that I'm not so proud of that I've avoided telling him. It's not that he's not good with money, but he just trusts me to do it. He doesn't ask many questions and that's okay. But I'd hate for something to happen to me and have him not know what's going on with our finances. If he already knows where we're going and what I do on a regular basis, then that's one less thing that he has to worry about.

Do you have any tips for creating a budget? Any reasons why you thing saving is a necessity? Any finance tips to offer? Email them to mylifemakeover@gmail.com and you could be featured in an upcoming post!