Attorney Timothy P. Stickradt Speaks With Katherine On “This Needs To Be Said” About Bankruptcy.

Katherine:

Hello, everyone. Thank you so much for joining us today on This Needs to Be Said. I want to introduce someone brand new to you to the show. We’re going to talk about bankruptcy. He has a new book coming out that’s going to help you with understanding your way through bankruptcy. Attorney Timothy P. Stickradt is here with us today, and he’s going to share some time talking over things to consider if you are considering bankruptcy. Welcome to This Needs to Be Said, Attorney Stickradt. How are you?

Timothy S:

I’m good, thank you, Katherine.

Katherine:

Before we jump into giving people things to consider, tell us a little bit about yourself. How does bankruptcy become your calling? How did you get into it?

Timothy S:

Well, Katherine, I’ve always been someone who strives to look out for the underdogs and try’s to help people in need. And years ago, I worked for a bankruptcy attorney. And as fate would have it, he fell ill and I basically took over his firm for him for a period of time before I was able to buy him out. So I was able to keep his business going while helping other people, and helping him help them at the same time.

Katherine:

Wow, okay. So maybe, was it part of your plan? I mean, of course not for the person to become sick and take over that way, but had you thought about having your own practice at some point and it just happened that way?

Timothy S:

Yeah, I did. It just kind of happened a little sooner than I planned, that’s all.

Katherine:

Well, we need to know that there are people like you that are helping people. You’re an attorney, which gives people the willies and the butterflies in their stomach. But to know that, hey, we all go through things and there’s a way to go through these things. So we’re talking about bankruptcy on today, and there are several things to consider. Now, my turn with bankruptcy, I’m not legal. I’m a talk show host, I do podcasts and TV, and I talk with people and ask them questions. That’s my expertise.

So in my world, bankruptcy means I’m just flat broke. I don’t have any more money on my person. I have to wait to the next payday or something like that. But all jokes aside, and I don’t want to just assume everybody knows what it is, because I think sometimes people are actually bankrupt and don’t know that they are, hey, you’re past needing help. You know you’ve been bankrupt. So when we say bankruptcy, what does that mean? Is it my definition, I’m flat broke, or something else?

Timothy S:

Well, no, not necessarily. Bankruptcy, the way I see it, is a remedy. It’s a tool. And I think the mistake that a lot of people make is that they think of bankruptcy as a bad thing. Now, that sounds weird I think. But really what I mean by that is, people think that bankruptcy is an awful thing that happened to me. And the fact of the matter is, it’s not. Something bad has happened to you. You’ve fallen on hard times, you’ve gotten sick, you’ve lost your job, you’ve gotten divorced. Something caused you to have your debt spiral out of control. That’s the bad thing, that’s already happened. Bankruptcy in many times is actually the positive thing, the answer or the tool that’s going to help you get back on track. So I think you need to kind of turn it around and look at it a little bit differently.

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Katherine:

A lot differently, absolutely. Because we think about shame and guilt, and I did something wrong, so you’re clearing it up. Something did happen, and for whatever reason, maybe you did do something, but maybe you didn’t do something at all, make yourself fall sick enough to lose everything. So; you know, instead of turning on ourselves and saying, “Oh man, I’m going to beat myself up. I did something bad.” Look at this, as you said, and I like it, a tool, a remedy. This is a way out, a way through what you’re going through. And it sounds like there’s a way that I don’t lose everything.

So, there are different chapters of bankruptcy and I know some seem a little harder than others. Like some you do have to give up things and some you get to keep. Which are which? You have chapter seven, 11, and 13. I know those are the ones we’re going to talk about today, there may be more. But which ones do I have to give up everything or some things, and which ones do I get to use to keep some of my things?

Timothy S:

Well, you never have to give up everything. Let’s start with that.

Katherine:

Oh, okay.

Timothy S:

And that’s another misconception, I think.

Katherine:

See?

Timothy S:

A lot of people, yeah, they come into it and they think, what am I going to lose? Do I have to lose, give up my house or my cars?

Katherine:

Yeah.

Timothy S:

Or my retirement, or my paycheck. And that’s just not always true in fact, most of the time you give up nothing other than your debt.

Katherine:

Oh, okay.

Timothy S:

See, to answer your question more directly, we’ll simplify it. To start with, chapter 11 is really a business reorganization type bankruptcy. It’s not something that I handle. It’s cut out, like I said, for businesses. It’s not a personal type of bankruptcy, and a lot of what we do, all of what we do, we deal with personal bankruptcy. Individual people, married couples, families, that sort of thing. So really, that leaves us to chapter seven and chapter 13. And the basic difference there is, chapter seven is the type of bankruptcy that just eliminates certain types of debts. For example, credit cards, medical bills, personal loans, money owed on houses or cars that you no longer have, like if a vehicle had been repossessed or a house foreclosed, things like that.

And chapter 13, on the other hand, is more of a reorganization where you’re saying, “I can’t afford all of my debt, but I can afford some of it. But the creditors won’t listen to me, they want everything and they want it when they want it.” Well, through chapter 13, we’re able to reorganize that and take control of how much we pay back and when so that it tailors into your particular budget, which is different for everybody.

Katherine:

Absolutely. One thing, so listen, This Needs to Be Said audience. If you’re standing around the water cooler or the water filtration system at your job talking about how to solve your financial problems, unless that person next to you is a bankruptcy attorney, you probably shouldn’t take what they say for no more than it’s a thought. Because there’s a lot of misconceptions I’ve had, and I even shared one with us today. Is said, “Which one of the chapters do we have to give up everything?” And you quickly let me know, actually, that’s a myth.

So just like I’m not the expert, and I said that, and I mean that. So just like you could sound very smart, but you’re not smart in every area because this isn’t what we do every day. This isn’t what we know. We don’t go into getting credit cards or purchasing a home and say, “Boy, I know how to get out of this if it doesn’t work out,” you know? You don’t have that information because your idea is, I’m keeping it, I’m building upon this. I want to maintain these things. And you get sick and something has to change. And I like that you said it’s your… did you say resetting? Resetting or realigning, like with chapter 13, you can pay some but not all. But it’s restructuring, I believe that’s what you were saying.

Timothy S:

Yeah, so-

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Katherine:

It’s nothing about punishment or you did something wrong or hey, you did this and this is your karma. It’s, let’s restructure it, let’s look at it again. Let’s get some support, and since the creditors won’t listen to you because you’ve been telling them, “I don’t have it. I don’t have it right now. I can do this much.” And they say, “No, no, no.” You bring in someone like Attorney Stickradt, and he’s able to help reorganize, restructure, and get them to hear you. So that’s what I’m getting from what you’re sharing, and it just sounds like it’s more of a positive than a negative.

However, I want to ask you this. For people who say, “I am the type who always paid my debt. The word bankruptcy, how can it be a positive thing?” And I really think we’ve answered that for the person who pays their bills. But they’re still probably thinking, I mean the whole bill. I don’t want to pay for part of it, because I still feel guilty over the part that didn’t get paid. So what do you say to that person?

Timothy S:

Well, that’s common. Most of the people that I meet with are really good people, and they want to do what they believe is right almost to a fault. And so what I say is, look, I mean yeah. If you can afford to pay your bills and you’re not having issues deciding whether you want to feed your kids or pay your rent or mortgage, or pay the credit cards. If you’re not juggling like that, well then maybe you don’t need a bankruptcy. Maybe there’s other options, other solutions for you. But if it gets to the point where it’s inevitable, where you are literally deciding on whether you should eat or take your medicine, or pay your mortgage, well, then we’ve got to talk, okay?

Because obviously there’s not enough money coming in to cover what needs to go out. And when that happens, we’ve got to prioritize what’s most important here and what’s least important. And so in doing that, that helps us to determine whether or not you’re really a candidate for bankruptcy. It’s not something to take lightly. It’s not something just to jump into with both feet necessarily right away, but it also isn’t something to be afraid of either. Again, go back to what I said earlier. It’s merely a tool to help you get to a better spot.

Katherine:

Now, we’ve talked about the positive. We’ve talked about if your mind and heart is stuck on, I got to fully pay back my bills. I feel guilty if I don’t. But is there a downside to filing bankruptcy? Is there a downside to resetting this way?

Timothy S:

Well, that depends. Any downside usually pales in comparison to the downside to not filing. What I mean by that is, your credit score, people worry about their credit scores. They think that if they file bankruptcy, this is a common example I get. People come in and say, “What’s going to happen to my credit? Am I never going to be able to buy a house or a car?” And the answer is, “No.” There’s this notion that if I file bankruptcy, my credit score is tanked for seven to 10 years, and that’s not true at all. It may drop a little, although in most cases it doesn’t, because usually by the time someone comes to me, they’ve missed so many payments that their credit score is about as low as it’s going to get. In which case the bankruptcy actually brings it back up again, another-

Katherine:

Oh, okay.

Timothy S:

Yeah, another common misconception there. Yeah, right. No, there are times when there are downsides to filing bankruptcy, chapter seven specifically. Sometimes if your assets have, or if you have too much equity in your assets beyond what we can protect, you may have to give some things up. Now, that’s only true in just 2% or 3% of the cases that we handle though. Usually, that’s not what happens. You’re allowed to keep and protect a really healthy amount of equity and assets before you have to actually give anything up. Because again, the idea here isn’t to punish you. These laws weren’t written to punish you, they were written to help you out of a bad spot. So you don’t have to give up your car and your house and your job and your retirement, and whatever else you may have just to get out of debt. The idea is to get you back on track so you can live a productive life, and you can be a positive influence on the economy as well.

Katherine:

Our time is winding up, and I’m enjoying this. I love the way that you’re sharing the information. Not talking as if, duh, we should’ve known it, and I do appreciate that. And it restores confidence just for a person that’s feeling like I’m in over my head and I don’t know how to get the help. Now, you’re working on a book called Time for Change, and it’s saying, I’ll quote you, “To file bankruptcy and to take control of your life,” which is what you’ve demonstrated in this conversation. So I look forward to us getting into that conversation, that book more, in a future conversation. But for now, if people need to get in touch with you, how do they do that?

Timothy S:

Well, they can call me here at the office. My number is area code 248-988-8335. They can go online and look us up on the website. Our website is www.HSAPClaw, that’s H-S-A-P-C-L-A-W.com. Or they-

Katherine:

Thank you so much.

Timothy S:

Sure.

Katherine:

Go ahead.

Timothy S:

No, I was going to say they could email me as well. TStickradt@Hammerstick.com. My last name is a bit of a mouthful, but it will be T-S-T-I-C-K-R-A-D-T@hammer, H-A-M-M-E-R dash stick, S-T-I-C-K.com.

Katherine:

Well, until we get to have the conversation about your book, you have a super day.

Timothy S:

You too, Katherine. Thank you for having me.

Katherine:

You’re welcome, until next time. Bye now.

Timothy S:

Okay, bye.

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