I was still very confused about bankruptcy and how to handle my business, so I looked up another firm in the Yellow Pages, which had a web site. Their web site assured me that they wanted to talk to me, so I should call for a free consultation.
The man I spoke with, Bill, was intelligent, articulate, and fast-talking. My kinda guy. Bill quickly ascertained that the greatest portion of my debt was in my business. He didn’t understand why others were suggesting I file personal bankrupty as well. He sneered “I bet they wanted you to declare two bankruptcies.”
He fired questions at me rapidly, throwing me into a state of dizzy dependency. I explained my dilemma with the IRS and how much money I owed them, so Bill asked “How are you going to pay me, Joanne?” Fair question. I told him, “If I blew out my inventory, I could conceivably bring in $20,000 in a month.” WRONG answer. You see, I was extending unearned trust to this man. I have a tendency to believe that people “care” when mostly they’re in it for themselves alone.
I asked several questions trying to clarify what another attorney had told me and Bill asked, “Who told you that?” I told him about the last attorney who I thought was ineffectual. Bill asked what his name was. “I’d rather not say,” I told him. Bill threatened, “You tell me who he is or this conversation ends here.” He bullied me into revealing the name, and I gave it because I needed more information, but that was the moment Bill had lost me as a client. Nobody’s going to bully me. I should have hung up on his sorry ass.
I made a comment about something else that had confused me. Bill laughed at me and asked, “Where did you hear that?” I said, “I read it somewhere.” Bill said, “Well, stop reading. You’re confusing yourself.” Did he just say that? I couldn’t believe it! This guy really is an asshole. He was doing all he could to make me feel like I was incapable of handling this situation on my own.
Bill decided we were finished talking and went for the close. “I can handle your business bankruptcy, but it’s very complicated. It’s going to cost anywhere from $3,000 to $5,000, no, make that $10,000. I’ll do it for $10,000.” I guess he decided he was going to take half of what I could potentially earn in a month. That’s why it was a mistake for me to reveal that. Had I not said that, the bankruptcy probably would have cost me only $3,000.
But here’s the problem. The IRS debt survives bankruptcy. And the two business credit card debts I had would also survive business bankruptcy, because I’m pretty sure there’s a clause in the contract that says that in the event the business closes with outstanding debt, that debt transfers to the primary shareholder, or trustee. That would be me. And this guy wanted me to give up $10,000 so he could file bankruptcy when it wasn’t even necessary.
You see, my corporation is insolvent, meaning the debt exceeds the assets. I don’t need to file bankruptcy. I can just close my business and notify my creditors that there’s no more income. The vendors who sold me product unsecured by collateral wouldn’t get anything and could write me off as a loss on their taxes. The credit cards would transfer to me personally. So this attorney wanted $10,000 to do something whose only benefit would be to get people to stop calling me for money. I’m happy to field a lot of phone calls for $10,000!
But after the business closes, here I am holding my personal debt, my business credit card debt, and the IRS payroll taxes with no job. And a few months down the road no home. As my mother used to say, “I won’t have two nickels to rub together.” And I don’t need to file personal bankruptcy? What a jerk.
Of the three attorneys I spoke with, not a single one told me I could just close my business, though they all knew it was finished. I first read about insolvency on the Internet and then the IRS agent confirmed to me that’s all I needed to do, and she gave me two months to do it.
One thing I have learned from these attorneys is that they will not offer advice that is in your best interest but in theirs. They want you to declare bankruptcy. Times are hard for them since the change in the bankruptcy laws. They have bills to pay, too.
I’m not going to be following Bill’s advice to stop reading, which is self-serving at best. I bought the book How to File for Chapter 7 Bankruptcy.
Attorney Lesson #3: Don’t Read. You’re incapable. Leave your financial future up to someone else.
Joanne’s Lesson #3: Read as much as you can. Educate yourself. Ask questions. Don’t let anybody bully or intimidate you. Let your troubles be a teacher to make you strong, not dependent.
{ 2 comments… read them below or add one }
GOD that just makes me MAD to read!! What an asshole. I wish you had let him have both barrels and then hung up on him. Twice.
I’m the same way though – it’s part of the reason I detest talking on the phone. Before I know it I’ve said too much so the buffer zone of email is SO much better for me. DAMMIT tho. What a jerk. I’m sending him constipation and diarhea vibes – to alternate during the most important days of meetings or business that he has this month.
He truly was most jerkish.