This office often sees huge — in the tens of thousands — debts charged by the government of Maryland against drivers for failing to pay “EZ Pass” tolls.  I’m looking at one now for almost $14,000.

Why the debts are so large was finally explained to me by a state assistant attorney general recently.  The toll charge itself is frequently relatively small — a few dollars.  However, the fine itself is $50 and the related collection charge of $8.50 are charged PER VIOLATION.

For drivers with multiple violations this can really add up.  An example:

Here’s a New Year’s resolution to consider:  Get rid of your car.  Your life — and your fiscal health — could improve significantly.  Also, the planet will thank you.

It sounds drastic, but  — if you really think it through — it may not be as crazy as it seems.  In fact, I’ve done it for the past year.  It can be done.  It’s way more feasible than you think.

Getting to work:  Remember there is public transportation.  Let somebody else do the driving.  Take advantage of that time for yourself.  Read.  And make use of technology to get work done:  Use your cell phone to answer emails, review documents, whatever.

The news article headline in the Salt Lake Tribune this week says it all:

Average Utah payday loan interest rate rises to nearly 528% annually — double what Mafia loan sharks charged in the 1960s

And to think:  It’s legal.  Payday loans — avoid them.  Do something else to tide you over to the next paycheck.  If  you take out a payday loan, you’ll only be making your problem worse. If you’re maxed out and struggling, talk to a lawyer and examine all your options before you make uninformed decisions  and start rejecting effective solutions out of hand.


I have seen a lot of clients recently who have had to file bankruptcy because they turned their cars in to the dealership.  They expected that this it would be a solution to the problem of a car payment they could not afford.  Nope.  Big, big mistake.

Turning in a car to the dealership is, for legal purposes, exactly the same as a repossession.  The dealer goes through the same steps.  The dealer takes the car to auction and sells it — usually to themselves — for way less than the amount of the outstanding loan.

The remaining loan balance — known as a deficiency — is usually the subject of a lawsuit against the borrower.  Most of the time, the borrower does not bother to contest the lawsuit. (There are few legal defenses to the lawsuit on the deficiency anyway.)  The result is a judgment against the borrower, often for tens of thousands of dollars.

News outlets are starting to report that real estate values may be beginning to drop.  ” ‘Anything goes’ list-price strategy no longer working,” says a headline in CNBC news.

Sales of all homes — new and existing — fell in June to the lowest level since last year.  Mortgage applications have fallen, and so has construction of single family homes.

Whereas sellers were seeing ten to fifteen offers at the beginning of this year, that number is dropping to about half of that, realtors say.

California tax and bankruptcy expert Morgan King writes in his latest newsletter:

“The IRS has begun certifying federal tax debts of more than $50,000 to the State Department, which poses problems for travelers. Why? Because the State Department generally won’t issue passports to taxpayers who have been flagged for delinquencies.

Internal Revenue Code 7345 allows this. Once the State Department is notified, it can either deny a passport application and/or revoke a current passport. If it happens while a taxpayer is out of the country, the State Department may issue what’s called a limited validity passport that only allows a taxpayer’s direct return to the U.S.

It’s a little-known secret — and too infrequently exercised right of a debtor — to “redeem” a car in Chapter 7 bankruptcy, that is, take the car back from the lender at what the car is worth, not what you owe.

Yes, you heard that right: A debtor in Chapter 7 bankruptcy has a right to take his or her car back from the lender at what the car is worth.

Section 722 of the bankruptcy code gives Chapter 7 debtors the right to force the lender, who is holding as collateral personal property intended primarily for personal, family or household use (such as the family car), to fully release its lien in exchange for a lump sum payment by the debtor of the retail value of the item.

It happens often:  Somebody has a debt and/or tax problem that’s been bothering them for  a while.  They know they should do something about it, but they find excuses.  The most typical excuse:  I can’t afford to pay for legal services.

Right now may be the time to get the situation fixed.  Many of our clients finance legal services from the tax refund they get this time of year.

And particularly, if you’re getting garnished, may as well keep it out of the hands of a creditor you’re going to discharge anyway, stop the garnishment and put that money to good use fixing that problem once and for all.

Evening TV commercials offering to help taxpayers with tax debts.They promise to help you solve your delinquent tax problems. But are they legit?

High volume advertisers typically collect hefty retainer fees from a large number of burdened taxpayers, make quick, superficial efforts to protect the taxpayers, often accomplish nothing – then change their names and come back the next week with more high-volume advertising. Some evenings five or six different advertisers make their pitch on local T.V.

The biggest money pit I see when I interview prospects with financial problems is the car — always.  I have even seen people paying half of their disposable income in car payments (plus insurance, tolls, repairs, maintenance, tickets and all the other costs we don’t often consider).  It’s insane.  Here’s a post from Jay Miles in, in answer to a young man thinking about buying a Tesla, that says it perfectly:

No, don’t buy a car.  Cars don’t make money.  They’re depreciating assets.  You already have a wife, so there’s no need to show off.

Contact Information