We respect client’s privacy and help to protect it, so the personally identifying facts in this account are changed, but the storys are real.
Sally was a realtor. During the lead up to the great recession of 2008, she had bought and sold many properties. Expecting the market to keep going up, she had bought many properties with little down payment. Her income and credit had been strong, so she was able to finance the properties with very little money down in addition to her sweat equity as a realtor. When the market went down in 2009, her income declined and she was not able to make the payments on the properties which were foreclosed. The lenders started suing her for large deficiencies on each of the properties. She also had medical bills and credit card debts that she was not able to pay. Her unsecured debt exceed $1,000,000.00.
We filed her chapter 7 case with all the detailed information she was required to provide about her business and the properties and the debts. Because of the large amount of her debts, the trustee examined her carefully at the meeting of creditors. He found everything in order and had no objection to her case. After receiving her discharge, she has moved into another career, not wanting to get into the stress of the real estate practice she had previously. She has learned to live in her smaller means and is now secure and has time for her children and grandchildren, without feeling pressured to get the next big deal in the door.
Jane and Bill, her husband of many years sought help to deal with creditors who were aggressively trying to collect debts that had been incurred during times of no income from Bill’s self-employment. Several different people owed Bill’s business significant sums of money but were not paying. Jane and Bill believed that they would eventually be paid, but the checks never came. At their request, I advised the creditors that Jane and Bill were hopeful but that it did not seem likely to me that they would be paid.
A few years later, Bill, who was in his 80s, died. I informed his creditors and business creditors that he had died without any assets to be administered in an estate. A small insurance policy was payable to Jane and not subject to creditor attachment. That with social security was what Jane had to live on. Their home, which was held in joint tenancy with right of survivorship passed to Jane free of claims of Bills creditors. The home was subject to a reverse mortgage incurred when their income was too small to make a house payment.
About a year after Bill died, Jane went into the hospital with one of her lungs full of fluid. Her children who had been helping her with her expenses feared that she might die in surgery and wanted to be sure her affairs were in order.
They discovered that Bill had set up a complex asset protection trust when he was in business, but it had no remaining assets. There was an old will that poured assets into the asset protection trust. The only significant asset Jane had was here home with the reverse mortgage on it. Because of recent appreciation, the home had value more than the payoff on the mortgage. The children counselled with me about noon the day they expected her to have surgery. We decided to do a new will and trust that would be simpler to administer and still avoid probate. Later that afternoon we met in her hospital room in the intensive care unit to have her sign the documents. Her surgery had been delayed, and with many different tubes she was being maintained comfortably. She had slept most of the day.
Though she was tired and sore, she was alert and in good spirits, having gained much energy from the loving care of her children and their spouses. She reviewed and signed the will and the trust which provided for the orderly disposition of her property outside of probate in the event she died. With the help of persons at the hospital she had already filled out her advance health care directive, giving her daughter, who is a nurse, authority to make healthcare decisions for her if she were unable. Another daughter had prepared a statutory power of attorney which allowed the daughter who had been helping her with finances to continue in that role. My review of those forms showed that they were appropriate for her situation and did not need to be replaced. After that business was taken care of, she and her family felt like they could truly rest in peace knowing that her affairs were in order.
During my visit the day after her surgery. she reported that it had gone well and she was feeling better and looking forward to recovery. She expressed gratitude that they had not had to worry about her financial affairs and that the solutions we reached avoided unnecessary complications.