I have met with quite a few people at Halcomb Singler to discuss finances and have filed a bankruptcy petition for some of those people. Over the years I have shared with my clients what I found to be an odd tri-fecta people who need to file bankruptcy often share in common. I cannot stress how unscientific this is….I have not spent time and money going over all of the thousands of cases filed in the Indianapolis, Indiana (Southern District of Indiana) Bankruptcy Court. However, for a long time many, many people I represented in bankruptcy often had the following 3 creditors: 1. Kohl’s, 2. Victoria’s Secret and 3. Saab.
Kohl’s is by far the most common creditor I see in bankruptcy petitions I file. I know that Kohl’s give out “Kohl’s Cash” and has a sale just about every day of the year. I know that Kohl’s has some affordable clothing. However, I just looked up the interest rate on their credit card and it is prime rate plus 21.65%. Are you kidding me? Why would you open up one of these cards? This just means that the mediocre clothing you are buying, which, in my experience doesn’t last more than 2 washes, is costing you about the same that you might spent at Nordstrom’s. Solution is that if you want to shop at Kohl’s (as you can tell I myself am not a fan) pay cash. That way the inexpensive clothes you buy stay inexpensive and you don’t overspend so you can get more “Kohl’s Cash” or whatever other promotion they are running that day.
Victoria’s Secret may very well be that the store credit card can reach 24.99%. In essence, you have to buy something at a 25% discount just to break even here if you are using this card and not paying it off right away. I’m sure that the supermodel “Angels” are getting paid a pretty penny based on the interest rates charged by this store card. Are you seeing a pattern here? It’s not just Kohl’s and Victoria’s Secret. Store cards are going to charge you insane rates. While I don’t recommend using a credit card at all, I would certainly swipe the regular old Visa before a store card in an emergency. Clothing and underwear just about never qualify as an emergency. Cash should be king with these, and all purchases.
Saab happens to be the third ingredient to the tri-fecta that I often see in Indiana bankruptcy filings. I will let Saab off the hook a little in that I don’t think it matters that the brand of car happens to be Saab. I think the third ingredient is really a luxury car. When going to buy a car keep in mind that it is a thing that takes you where you need to go. You aren’t going to live in it and if you have any friends who won’t like you because your car isn’t up to snuff then you need to get some new friends. I know the lure of the nice luxury car! Once you have been in, or driven a nice, smooth, luxury car it is hard to get back in your decent but nothing special automobile. After driving a luxury car for about a week I actually thought there was something wrong with my car when I drove it again. Turns out that it was just the way my middle-of-the-road car drives. But every month you drive your ok car you are saving hundreds of dollars. In my opinion, paying cash for a car is the best way to make sure that you don’t let the process get the better of you. Car dealers know how to sell. They know that if they break up the payments over 6 (gulp…..or even 7) years and you hear $450.00 per month that you are going to do the math and think you can make that payment.
Other than to share an odd and unscientific observation I have made as a bankruptcy attorney filing bankruptcy petitions for clients in the Indianapolis, Indiana area I write this blog so that you know how to keep yourself out of financial trouble. The offices of bankruptcy attorneys all over the country are full of people who bought 2 nice luxury cars because at that time they could afford the payments. However, when life happened in the way of a job lay-off, illness or death the payment on the vehicle was the difference between a comfortable but not extravagant life and the office of a bankruptcy attorney. So, here’s to Americans getting back to a system of living in cash, buying what we can afford and caring less about having so much “stuff.”
If you are struggling as a result of store credit card balances, luxury car purchases, or any combination of debt and live in the Indianapolis area and are considering bankruptcy call my office at (317) 575-8222 or click here. I offer an initial case evaluation free of charge. I will go over your financial situation with you in a “judgment free” zone, answer your questions, and let you know if I think you could benefit from a Chapter 7 or Chapter 13 bankruptcy. I will also quote you a flat fee and let you know about our installment payment options.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.