I had the opportunity to catch up with Marietta Bankruptcy Attorney, Matthew Cherney about helping people out who get into financial difficulty.
We cover the difference between chapter 7 and chapter 13 bankruptcy as well as the emotional toll it can take on individuals and families.
Here is our conversation:
Neil Howe: Matt, tell us a little bit more about yourself and your law firm. Obviously, bankruptcy is a big issue. Is bankruptcy all that you deal with?
Matthew Cherney: I’ve been practicing exclusively in bankruptcy and debt related matters for about 13 years. I started practicing in my hometown of Chicago, Illinois back in 2005 and practiced there at a large bankruptcy firm for approximately four years.
And the firm I was with provided me an opportunity to move down here to Georgia. They were expanding their practice into other markets and I was afforded the opportunity to move down here with my wife and act as managing attorney at the firm down here in Georgia.
I stayed with them for about another five years and then started my own practice. I’ve been in private practice for myself, dealing exclusively in debt related matters, for about six years now and focus primarily on consumer bankruptcy cases, specifically chapter 7 and chapter 13.
Neil Howe: What are some of the issues that people are having these days with debt relief and what kind of solutions are there available for them?
Matthew Cherney: In all my years of practice I’ve run the gambit and run into almost every sort of circumstance that you can imagine. I’ve been doing this quite a long time now.
I have clients anywhere from people who are unemployed to where they just can’t begin to service any portion of their debt. I have clients who are underemployed. These are clients who made good money and at the time, they were able to service what would have otherwise been a manageable amount of debt relative to their income, but now their current income simply doesn’t allow them to maintain their payments on their debt while still maintaining a certain standard of living.
I have clients who fell ill, recently hospitalized, who can’t afford to maintain or begin to pay what is an astronomical amount of debt for their medical bills. I have clients with tax debts, I have clients who for a host of different reasons simply fell behind on house payments, vehicle payments, and perhaps it’s not necessarily a matter of maintaining these payments going forward but for unforeseen circumstances, they just simply cannot catch their payments up.
One thing that I found over the years that dealing with debt brings with it potential legal issues but it’s not always just legal problems for individuals. I found that the larger issues are emotional.
Many of my clients deal with anxiety, stress, shame, embarrassment, and all things associated with the underlying debt and they feel like they maybe let themselves down. Perhaps they feel like they’ve let their families down. They feel like they’ve got nowhere to turn.
A lot of this stems from debt and having creditors that might be harassing you or trying to collect from you and I found that a lot of the collateral issues are largely emotional. That’s something that’s not lost on me which is why I really try to be an advocate for clients and try to show them that I understand that these things are larger than just the debt itself.
Neil Howe: What is the most common reason people get into debt?
Matthew Cherney: It changes over the years. In good economic times, I found that it comes from unforeseen expenses, household expenses, illness. During less than stellar economic times, it may come from unemployment, underemployment and just inability to service the current debt that they have. There are times where you make a good living, you provide for your family, you’re able to afford the monthly payments associated with your debt and then there comes a time where you’re just not able to do it anymore and people are faced with the idea of, “Do I provide for my family? Do I pay my mortgage payment, my lease payment on my apartment? Do I pay my car loan? What do I do? Where do I turn?” These are the harsh realities and circumstances that face a lot of my clients.
Neil Howe: We have been recovering from the recession back in 2007, 2008 when the market crashed but it’s been pretty good for the last 10 years. Do you see things in the market suggesting that it’s going to turn again?
Matthew Cherney: Well, the signs before were very tied to the housing market and that was one thing that most people point to when they talk about the recession and it affected a lot of people back, around the time that I started to practice in 2006 to 2008. A lot of people point to the housing market.
But now the signs aren’t necessarily tied to that. What I’m seeing are things tied to lending, just lending in general, specifically vehicles. That’s one big thing, subprime vehicle loans. I see a bubble really getting ready to burst there.
Traditionally, vehicle loans were a four or five-year loan. Now you’re seeing some vehicle loans stretched out as far as seven or eight years and often times, these sort of subprime loans are going to carry with them rather high interest rates, 18, 25 percent.
Some people, unfortunately, might not be as savvy to look at the amount of interest that they pay on a vehicle over eight years. Sometimes people are paying 60% more than what the vehicle may even be worth.
Student loans are another huge area where something at some point is going to have to give. I don’t know if that’s going to be by the intervention of Congress but that is something that is certainly coming to a head. There is so much student loan debt and folks, no matter what their financial circumstances are in life, are having difficulty in dealing with these payments. That’s not just someone who is working for minimum wage. These are professionals, doctors, lawyers.