Tackling Lawyer Debt

Money is a significant stressor in many people’s lives. Student loan and credit card debt can feel overwhelming, even paralyzing. Here are some resources that can help.

Student loan debt

In a recent guest post on Legal Ease, Andrew Josuweit of Student Loan Hero shared three solutions to ease the burden of student loan debt:

Start the process of tackling student loan debt by checking out the resources published by the Oregon New Lawyer Division. All three Oregon law schools offer a Loan Repayment Assistance Program (LRAP) for their recent graduates. If you attended law school out-of-state, check with your law school to see if they offer their own LRAP. You may also be eligible for the Oregon State Bar’s LRAP program.

For an overview of this topic, check out Navigating Student Loan Repayment Options, a free CLE available on the Professional Liability Fund website.

Credit card debt

If you are struggling to chip away at your credit card debt, consider whether a balance transfer is right for you. In theory, a balance transfer credit card allows you swap out your high-rate card for a cheaper card, paying off your original balance. Nerdwallet recently published a list of the best balance transfer cards for 2018. Terms vary widely, so do your homework. But all in all, the Nerdwallet list seems to include some good deals:

  • Discover – No annual fee, 0% interest on purchases for 6 months and 0% on balance transfers for 18 months, rewards rate 1.00%
  • Citi Diamond – No annual fee, 0% on purchases for 12 months and 0% on balance transfers for 21 months
  • Chase Freedom – No annual fee, 0% on purchases and balance transfers for 15 months, rewards rate 1.00%

For the pros and cons of pursuing a zero percent balance transfer, see this post.

Know your spending habits

Establish a system to track personal income and expenses. Free budget templates are available from Office 365, Mint, or these sourcesQuicken Deluxe is another good solution: cheap, easy to use, and a great value.

Speaking of budgets, have one. Each month, compare your actual income and expenses to the amounts you projected. If you see yourself going astray, make a mid-year course correction.

Be ready to make tough decisions and a few sacrifices to cut back on spending.

Managing the stress

Money management isn’t easy, and being in debt is stressful. But you are not alone. If you don’t know where to start, reach out to the attorney counselors at the Oregon Attorney Assistance Program (OAAP). They are supportive and can point you in the right direction. Help is free and confidential: 503-226-1057 or toll-free in Oregon 800-321-6227.

For an uplifting account of how one lawyer survived law school debt, read this article from the September 2017 issue of InSight, the OAAP publication.

All Rights Reserved 2018 Beverly Michaelis

Bankruptcy for the Non-Bankruptcy Lawyer

On October 14, presenters Christine Coers-Mitchell and Johnston Mitchell of Coers Mitchell Law LLC presented Bankruptcy for the Non-Bankruptcy Lawyer.  Topics included decoding “bankruptcy talk,” what to do if a bankruptcy filing occurs during litigation, how to settle a bankruptcy claim, how to handle divorce-related bankruptcy issues, strategies for creating “bankruptcy proof” agreements and transfers, and bankruptcy issues involving real property.

Below is a compilation of the best tips from this CLE via Storify 

Access Bankruptcy for the Non-Bankruptcy Lawyer here  or click on the image below:

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[All Rights Reserved 2015 Beverly Michaelis]

Calling All Lawyers Who Advise Businesses

This post is for any lawyer who gives business advice.imagesCA6NS7E8

You may consider yourself a business lawyer, employment law practitioner, corporate lawyer, commercial law specialist, or debtor/creditor/collections expert. If your clients process writs of garnishment, read up!

Garnishments represent an area of potential liability for several reasons: employee or account holder misidentification, honoring a writ that has expired, or failure to include identifying information with the payment.  The Professional Liability Fund has witnessed all three errors.

Believe it or not businesses who are garnishees frequently issue payments with blank check stubs and no attached documentation. While privacy or identity theft concerns may impose limitations on the amount of identifying information provided, it is crucial that the garnishor be able to identify the debtor and match payments received to the proper account. Otherwise your client’s check is useless. Furthermore, the identifying information cannot be cryptic. For example, a partial home address for the debtor with no other information (debtor’s name, account number, TIN, circuit court case number).

This is not just an issue for the garnishors who are trying to process payments. Your garnishee clients need to maintain a proper audit trail. Check stubs and related accounting entries should carefully detail the identity of the debtor and any other information needed to substantiate funds withheld.

For those who are skeptical, this problem is rampant. And it isn’t an issue limited to small Mom and Pop businesses who don’t know how to properly respond to garnishments. Large banks and employers regularly send off checks to garnishors with little or no identifying information that can be linked to a debtor. Please advise your clients to keep proper records and include sufficient information to identify the account holder or employee whose funds are being garnished.

A side note for those of you who are garnishors or who represent garnishors: Many lawyers who handle collections send calculation sheets to their garnishees. Your calculation sheets should contain appropriate identifying information.  Instruct garnishees to return the calculation sheets with their payment and track garnishee names in your collection system to aid in processing and matching payments.

All Rights Reserved Beverly Michaelis (2013)

Law School Debt Crisis

With an economy stuck in neutral, student loan debt continues to weigh down recent law school graduates.  Some are working, but can’t afford to pay rent, buy groceries, and make student loan payments.  Others are struggling to get a solo practice off the ground.  Meanwhile, student loan collectors call relentlessly – in some cases daily.  Where is the relief?

Here are six ideas from blogger Brian O’Connell.  One option is state loan repayment assistance – offered by Arizona, the District of Columbia, Florida, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, and Vermont.  Read more about repayment assistance on the ABA Web site.  The Oregon program is described here.

Free Debt Relief Webinars

More student loan debt relief resources can be found at Equal Justice WorksFree Webinars can help recent grads navigate through the various options.  Upcoming programs include:

Repayment Assistance for Public Defenders, Prosecutors, and Legal Aid Attorneys

If you are a public defender or prosecutor, check out the John R. Justice Student Loan Repayment Program (JRJ). The JRJ Loan Repayment Program provides loan repayment assistance for state and federal public defenders and state prosecutors who agree to remain employed as public defenders and prosecutors for at least three years.  Legal aid attorneys can receive loan repayment assistance through the Civil Legal Assistance Attorney Student Loan Repayment Program (CLAARP).

Check With Your Law School

Some law schools also provide help.  A complete list is available here.  All three Oregon law schools offer loan repayment assistance programs: Northwestern School of Law at Lewis and Clark , University of Oregon School of Law, and Willamette College of Law.

Not Sure Where to Start?

Visit What Resources are Useful for Me?  on the Equal Justice Works Web site, consider joining the Equal Justice Works Student Debt Forum, and check out 7 Tips to Help You Confront Your Law School Debt from Law.com.  Also know that more help may be on the way, thanks to the ABA.  Last week, the ABA House of Delegates adopted a resolution to urge Congress to enact legislation to help law graduates with debt not covered by existing student-loan repayment exceptions.

Copyright 2011 Beverly Michaelis