The number of clients who haven’t thought clearly about retirement is predominant.  But even then, I was surprised by my recent conversations with clients after the dramatic stock market collapse of the past few months.

Clients seem to think that “401(k)’s” were a kind of investment that should be avoided because it had crashed.  They did not seem to understand that a 401(k) was merely a vehicle for retirement savings, independent of what it was invested in.  They were prepared to shun 401(k)’s because they had gone down in value.  Arhghhhh!

So I need to add a chorus to my song about preparing for retirement rather than paying off impossible credit card debt.  Drumroll, please….

So I was surprised by a recent bankruptcy court decision out of Minnesota ( In re Todd Carpenter:  2008 WL 4567128 (Bankr.D.Minn.)) that held that a debtor who elected to use the exemptions in the Bankruptcy Code forfeited the protection of Social Security law for a substantial back benefits check.

The decision acknowledged that other courts had held differently.  And in California, since the state has “opted out” of the exemption system found in the Bankruptcy Code, this decision should have no effect in my cases.

Yet it is a heads up to lawyers to keep thinking about these issues, since things you take for granted as fixed may not be a certain as you thought.

I talked with a lawyer I respect enormously who has a national perspective on what’s happening with consumers and bad or upside down loans.  His experience was that no bank wanted to make a decision to modify a loan until they knew whether they’d get a better deal from the feds.

So, at least in the short run, the hugely expensive bailout allows banks to pay dividends to their shareholders with taxpayer money and further freezes the incentive for banks to rework troubled loans into performing loans, rather than candidates for foreclosure.  Such a deal.

While it isn’t always comfortable to talk about a family’s financial limitations, I think we cheat our children of useful life lessons when we treat the family finances as a deep, dark secret.

I wonder whether the explosion of consumer credit, fueling the illusion that everyman can enjoy a middle class lifestyle in an era of stagnant wages, has had any role in muffling protest about wage inequities?  What do you think?

Bankruptcy, in their parlance, has all the appeal of cancer.  They make bankruptcy a horror so you’ll buy whatever it is that they are selling, including you, Dave Ramsey.

Nonsense.  Bankruptcy is a tool to deal with a bad set of facts.  Regret the factual situation, but don’t spurn a legal and effective solution.

If you have a disease, the disease seldom goes away when you reject treatment.  Likewise, rejecting bankruptcy seldom results in financial health:  it just prolongs the stress, the reckless living without insurance or reserves, and the mindless I-can-do-this until there is a financial or physical train wreck….. or a suicide.

Those who paint bankruptcy as a sign of failure or a matter of shame to further their own economic interests ought themselves to be ashamed.

To qualify, you must have lived in the home since December 31, 2007; have 20% equity in the property; and have a household income of less than $35,000.

To apply, call 1 800 952-5661 or see the State Controller’s webpage on the program.

Funny, but it seems to me that my bankruptcy office is crowded with those devotees of one get-rich investment wizard or another.   The savers are presumably getting along.

I’ve frequently thought it would be instructive to see what the financial gurus were saying about get-rich-in-real- estate now that real estate has crashed.  Unfortunately, I’ve been too busy dealing with those who tried it and now need to file bankruptcy to do the leg work.  Apparently, facts don’t interfer with the sales pitch.

I’ve often lamented here and on Bankruptcy Law Network about the media voices urging spending while no one, but ING, touts savings.  Guess it all proves that there is no limit to the chuzpah of a salesman.

The answer is that the administration of assets in a bankruptcy case proceeds on a separate time line from the discharge. Congress wanted the debtor to know in short order whether he would get a discharge. There is no comparable policy reason to limit the time the trustee has to turn assets into cash for the benefit of creditors.

This client hoped that an asset that hadn’t resulted in a cash recovery before he got a discharge would default to him. No, I explained, the trustee could take his time, evaluate the suit, and settle the suit on terms that seemed appropriate to the trustee. Compromises or sales by trustees are subject to confirmation by the court; courts give the trustee wide latitude in the exercise of business judgment.

The prospect of the loss of control of this asset was a deciding factor in the client selecting Chapter 13, where he would stay in control on the asset.  One more reason to choose Chapter 13.

The most frustrating part of writing about bankruptcy for a national audience is the degree to which Chapter 13 practice differs across the nation. H***, it varies across the San Francisco Bay, where I practice.  I have Chapter 13 cases before three different trustees in three different divisions within the same district, and each has different procedures.

I interact with lots of clients who have found me on the internet doing “research” about bankruptcy.  It’s all too easy to assume that the procedures in upstate New York describe how your case is handled whereever you live.  It isn’t (necessarily) so.

Which is why I uniformly recommend that individuals engage an experienced bankruptcy lawyer to do a Chapter 13 case.  There are simply too many variations, unwritten rules, and local assumptions to master to make representing yourself a feasible alternative.