|Katherine:||Hello everyone. Thank you so much for joining us today on This Needs To Be Said. Our friend, attorney Peter Daigle, is here today to continue the conversation with us about bankruptcy, but he’s going to do something that we really haven’t done before. We’re going to really get into the emotional side of it, the emotional impact. Peter, welcome back to This Needs To Be Said. How are you?|
|Peter Daigle:||Great, Katherine. Thanks for having me as always. I enjoy talking with you.|
|Katherine:||I enjoy the conversations as well. Always something to be said, something to learn, and always you know just giving you another perspective on what used to be a bad word, a bad “B” word. So you’re talking about emotional impact today in bankruptcy. So go ahead and lead the way, because I’ve been waiting.|
|Peter Daigle:||So we’ve been doing a series the last couple of months, debt settlement, and the difference between filing bankruptcy and doing a debt settlement as to what you should do. And I want to just talk a little bit about reason why someone would want to do a debt settlement versus a bankruptcy and we’ve talked a lot about the numbers and how it works mechanically and how the math works out. But I want to talk a little bit today about you know, what people think and what they feel when they call our office or visit us, as to whether or not they want to file bankruptcy or settle the debt okay? So I want to talk a little bit about that.|
|Katherine:||Okay, well let’s definitely get into it. I’ve been curious about the emotional impact, because when you talk to me it makes sense and then it’s like, why are you the last person that we call when we have to do a reset on our lives? So I wanted to know what, so I’ve been waiting, so I’m listening. Pen is ready.|
|Peter Daigle:||So most people that get behind on their bills and they get overwhelmed, they sort of revert back to their growing up and to the fact that you know, their parents or relatives or other people in their life you know instilled in them, you’ve got to pay your bills, no matter what alright? And so when they come to me, they’ve got this you know, feeling that filing for bankruptcy is just not the right thing to do. It’s not how they were brought up. Regardless of how the math works out, they feel like they’re a loser, basically, okay and that they’ve just not stepped up to the plate and done the right thing. And so even though they want to get a fresh start, they still want to take a hard look at what debt settlement looks like okay?
What debt settlement does is allows you to pay a portion or even a good portion back on the debt that you incurred, okay? Even though the math says bankruptcy, bankruptcy, bankruptcy on it because you can’t afford it, we have people that just say, “I want to pay some of this debt back.” And so when they come to us, they come to that with a pretty rigid you know philosophy that they just don’t want to do a bankruptcy.
Now, some folks will change their mind over the course of the consultation, because we have a calculator that we use and we punch in numbers as to what a bankruptcy looks like and what does the debt settlement look like, okay? They may find at the end of the consultation that they’re really better off doing the bankruptcy, and sometimes they’ll be convinced of it because the math just doesn’t work out for debt settlement.
They at least want to have the discussion. So what we try to do is present options and not try to immediately tell them what the solution is and tell them this is what they need to do. We try to say to them, this is an option that you do have, and you know, I understand that bankruptcy is just not something that you want to do, so this is another alternative to that, and that being debt settlement. So what it really comes down to is whether or not you can afford to make the monthly payments on the debt settlement. Where in bankruptcy a lot of times, some of the times the debt is all discharged, where in debt settlement you’re paying something.
So if for instance a person would have said, listen, I can afford to pay $300 a month for example, and I’d be willing to pay that towards settling my debts, we would put in the $300 into our calculator and we would say, okay, based upon what we can settle the debts for and what you are paying monthly, it will take you three years of paying $300 a month for you to settle the debt, or two years or five years or whatever. So we sort of work backwards on what the payment they can afford to be. So basically they say to us, look, I just want to pay something towards it. Then we can calculate what a debt settlement would look like and whether or not it’s feasible. If it’s in the range of $20,000 or $30,000 in credit card debt, you know certainly debt settlement is something that we can look at.
But if their debts are up over $100,000 and their income is just median, then they’re not going to be able to do the debt settlement, okay because they can’t afford the payments. So it’s a little bit of common sense approach, as well as trying to be considerate of the feeling of they just don’t want to file the bankruptcy. I get all those major things, but this is certainly a discussion we have.
|Katherine:||So I want to ask something before we go on a little bit, because you talked a lot about how bankruptcy and your credit can go hand in hand. What is the impact of that settlement on your credit if the person decides to go that way?|
|Peter Daigle:||So the bankruptcy, believe it or not, is going to clean your credit up faster, because under the bankruptcy they are subject to the federal laws of bankruptcy, which basically says that all negative reporting is going to come off your credit upon the issue of a discharge, which is three months from the date of filing.
That’s not the case in debt settlement. Debt settlement is definitely going to hurt your credit, because what you’re doing is you’re paying, you’re settling your debts over what you know you owe. So it clearly is a greater impact on your credit by doing a debt settlement versus a bankruptcy.
|Katherine:||So I want to ask this, like lawyers, you are counselors, but are you like the therapist counselor? Because you have to figure out which angle to approach me, because if I don’t care about the impact on my credit, debt settlement may be the way for me. But then if I’m wanting to get that clean slate sooner, bankruptcy would be the way. So you guys have to really be strategic.|
|Peter Daigle:||Absolutely. So we try to leave the decision to whoever we’re sitting in front of. We don’t say, again, this is what is better or worse. We present the pros and the cons, and again, being sympathetic to how they were raised and the fact that they just don’t want to file bankruptcy. A lot of times they’ll forego their credit in the interest of paying something to the creditors, okay. This is a whole, like baking a cake here. We throw all the ingredients in and then we see how they want it to come out, okay. But it’s all about being empathetic to the needs of the debtor and what they feel. And of course at the end of the consultation, they ask me for my opinion, I will tell them, you know based upon what I’ve seen. But it’s really about weighing the pros and the cons.|
|Katherine:||And it helps the person feel in control of this situation that has gotten out of control. That’s what I’m surmising from you.|
|Peter Daigle:||Exactly, yep.|
|Katherine:||So I interrupted you, because I wanted to know that. I didn’t mean to get you off track, but we’ve talked so much about the impact on our credit, and now we’re talking about the emotional impact on making this decision, and so credit comes back into the conversation. I didn’t mean to pull you away from where you were going.|
|Peter Daigle:||Well, what I’m just saying is that a lot of times you know the common sense approach, just from a pure math standpoint and the credit, says that bankruptcy is a better option. That’s what happens a lot of times with this. But again, there’s an emotional aspect of filing bankruptcy that some people just don’t want to do. They don’t want to do it. They just want to work their way out of their debt. And that’s a viable option about settlements.
But what’s not generally an option is paying a lifetime of minimum payments. That just doesn’t work, and that just enriches the credit card companies. When you sign up for that lifetime of payments, all you’re doing is giving them interest each month on the debt. That’s just not a good alternative.
|Katherine:||And that’s not what you owe. You owe a certain amount, and you don’t owe the interest.|
|Peter Daigle:||Right, exactly.|
|Katherine:||Yeah, I think that’s a good point to bring out. Yes, I know you want to pay back what you owe, and technically you have, because you’ve been doing that in interest. You hadn’t even touched your debt. So I think that would make it make sense to me too, like, wait a minute. So I’m willing to pay a hundred times more than what I actually had the privilege of spending. So that would make me look at it too.|
|Peter Daigle:||That’s exactly right.|
|Katherine:||So people, we want to reset our lives, but so we feel like it’s slimy or we must be doing something wrong or somebody’s being slighted or I’m going to look like a bad person, because when we talk about emotions it’s more internal than external. I don’t want to feel bad about myself. I want to be able to sleep at night knowing that I did the right thing. And do you ever have this question come up, is even though it’s legal, why doesn’t it feel good? I’m wondering, like with the emotional piece, there’s a law for it. It says you get the privilege as an American to do this, but it just doesn’t feel good. So do you run into that discussion or question?|
|Peter Daigle:||All the time. That’s the purpose of this discussion that happens all the time. And I don’t want to discount somebody’s feelings and discount somebody’s beliefs. And so again, I just present the alternatives and then they have to make the decision, you know?|
|Peter Daigle:||But just to acknowledge it and to recognize that it’s an important part of the consultation and part of the process is to recognize those feelings and not just run roughshod over the bankruptcy because that makes sense mathematically, you know?|
|Katherine:||Yeah. I really like this idea of being able to get control of what has gone out of control, and now I have options. I don’t just have, this is the only way for you and you can’t do anything else. Even if it ends up being my only way, I was allowed to look at some other choices and I can determine along with what you’ve advised, this, whichever route works for me, I can do this. I’m willing to commit to this. This now makes sense to me, resetting my life and not choosing to be miserable. It makes sense to me.|
|Peter Daigle:||Well said. I could not have said it better. Perfect.|
|Katherine:||We work good together. We work good together.|
|Peter Daigle:||That’s it.|
|Katherine:||Do you have anything else you want to share with the audience before I let you go?|
|Peter Daigle:||No, that’s it. That’s really about it. I just really want to really focus on one point, not get off on any sidetracks, just let people think about that and go from there.|
|Katherine:||Fantastic. Well, as we always do, let people know how to get in touch with you outside of the show.|
|Peter Daigle:||Sure. It’s Attorney Peter Daigle. You can reach me through my website at daiglelawoffice.com, where you can request a copy of my free book. Or you can schedule a time for a phone conference or an in-person meeting. You can also call my office at area code (508) 771-7444.|
|Katherine:||Absolutely, Peter, and congratulations. I’m so happy for you. I hear that you have a new addition to your family.|
|Katherine:||Being a grandparent is like the coolest thing. Yeah.|
|Peter Daigle:||I’m so happy. Thank you so much, Katherine. That’s so thankful a blessing.|
|Katherine:||You’re welcome. You are welcome. Enjoy that one. He is going to grow fast, I tell you. Well, until we speak again, have a super day.|
|Peter Daigle:||Okay, Katherine. Bye-bye.|