Why many Intelligent and Talented People Fail in Business

Over the years I have seen too many businesses fail, not because of lack of customers or sales, but due to poor management. So, I wanted to warn my clients about all the pitfalls that there are out there for the small business owner. But to do that would take a lot of time, more time than any client would be willing to invest face to face. So, I decided to write a book that I could give out to my clients with a detailed explanation of everything that could go wrong with their business. It was my hope that they would read about these problems before they reared their ugly heads in their own businesses. To accomplish this I wrote Go Broke, Die Rich as a light, entertaining read, complete with stories about actual cases that I have dealt with in the past.

One of my critics complained that the book was basic and dealt with fundamentals and not for the seasoned or savy businessman. Well he is right about it being about the fundamentals of running a business. That's exactly what I intended as I have seen even experienced businessmen forget or ignore fundamental principals of running a business and end up in bankruptcy. More often than not, the businesses I filed bankruptcies for over the years, were owned by very talented, intelligent people. Often times they were great salesmen, designors or artists, but they didn't know how to run a business. They didn't know or appreciate the many pitfalls that are discussed in my book.

I'm sure many of the things I discuss the reader will be familiar, but I guarantee you there will be many things the reader doesn't know. Things that could save him hundreds, if not thousands, of dollars and a boat load of grief, if he pays attention and heeds my advice.

For more information go to the website, Go Broke, Die Rich or to Amazon.

The Credit Card Trap

From the day you are born you are indoctrinated on how important credit is to everyone. You're told over and over again that good credit is the secret to financial success and happiness in life. You're barraged with advertisements for all the expensive luxury items you can buy right now on credit and nearly everyone takes the bait.

You get a house you can't afford, a luxury car you don't need, and run up a half-dozen credit cards to the hilt. Before you know it you're a slave to the system. You’ve stepped into the credit trap. Most of your hard-earned money is going to banks and mortgage companies in interest payments. You pay and pay and pay, yet the balance you owe never goes down. For many the joy is soon gone—happiness is replaced with constant worry and depression.

Yes, from the day we are born, each and every one of us have been carefully manipulated into becoming slaves. That’s right, carefully programmed robots who go to work everyday and then religiously send seventy to eighty percent of our wealth to our masters, the big corporate giants of Wall Street and the government bureaucrats in Washington.

Think about it. From the day you are born you're told that good credit is your ticket to the American dream. You can have all the luxuries and modern conveniences of life on credit. Why wait, they say, when you can have it right now.

Millions of Americans, including myself, have been victimized by this credit conspiracy. The lure of easy money is so tantalizing that few can resist it. I started my own law practice with a two-thousand dollar cash advance on my American Express card. I tried to get conventional financing but had no collateral, so I was summarily turned down. Over the years I continued to finance my small business with high-interest credit card debt that the average entrepreneur would have no prayer of ever paying off.

A lot of small business are started and financed with credit cards each year this same way. A few will be successful and pay off this high-cost debt, but most will eventually perish because of it. Eventually the burden of the minimum monthly payments will get so heavy that the business will collapse.

Credit cards are very handy and useful for travel and to make it easy to keep track of business expenses. But they shouldn’t be used for financing your business or covering your negative cash flow at home. If you are using credit cards for this purpose you need to stop immediately and take a close look at the business. Find out what is wrong and correct it, but don’t keep digging a hole that will eventually swallow you and your small business.

So, now you’ve been warned, but will you do anything about it? Probably not. Credit cards are addictive just like cigarettes and booze. They provide immediate pleasure and allow you to fulfill your dreams. In your mind you’ve got everything under control. You tell yourself that you can stop using your credit cards whenever you want. So, why don’t you?

What makes credit cards so dangerous is that, unlike booze, there is no immediate hangover to make you regret you your actions. The consequences of your indiscretions with your credit card are deferred for months or years. For awhile you can manage to make the minimum payments without too much struggle, but eventually all the minimum payments add up and you find yourself overwhelmed.

The use of credit cards defies logic. Why would anyone pay 29% interest, late fees, over the limit penalties, and an annual membership fee, when the bank won’t pay you 2% if you buy a CD. It’s ludicrous. But when I point it out to clients they just shrug. It’s like their minds don’t compute when it comes to credit cards. Armed with a pocket full of plastic gods they become mindless zombies who have no idea what they are doing.

I could understand it if they were desperate. Many of my bankruptcy clients over the years have turned to pawn loans, payday loans, title loans, or other legalized loan shark operations. Without giving it a second thought sign a note that provides or sometimes over 900% interest. What’s ridiculous is that the Truth-In-Lending disclosure is right there staring them in the face and they still sign on the dotted line. When you absolutely have to have money people will do whatever it takes no matter what the consequences are to get it.

But people with credit cards half the time don’t need what they are buying. They are not desperate people who are buying food, clothing or gasoline to get to work. They are buying gifts they can’t afford to give, luxury items they could do without or booze and cigarettes that will eventually kill them. Nor are these people stupid. They are just as often college graduates as high school dropouts. The common threat among them is materialism and a lack of common sense. They like fancy cars, good food, designer clothing, the latest in technology and large well furnished homes. If they can’t have all these things they are unhappy.

So, what is the answer to the credit card addict? Fortunately, it’s an addiction that can be easily ended. All you have to do is quit paying the credit cards. When you do this they soon will lose their magic and you will never buy something you don’t need ever again. Even better your credit score will crater so you won’t be able to get new credit cards to replace the ones you have lost.

Of course, the downside of this solution is having to deal with all the angry collection agents who will start hounding you for payments on the now dead cards. They will threaten you will all kinds of horrible things like lawsuits, liens, garnishments, attachments, and even criminal prosecution. Of course, they can’t legally do any of this, but they will do their best to make you believe it will happen very soon if you don’t send them money. It may become so bad you will have to file bankruptcy just to get some peace, but bankruptcy is the worst thing for the credit addict.

That’s right because as long as your credit is bad you will have no choice but to go straight. But once you file bankruptcy your credit will rebound quicker than you’d ever thought possible and then you’ll be right back where you started with a pocket full of plastic gods.

So, rather than going through all of that, the better move for the credit addict is to simply cut up all the credit cards and pay them off as quickly as possible. This will be painful and require a lot of sacrifice, but it will be well worth it as it will free you from the financial shackles that have bound you from the moment you stepped into the credit trap.

Lucky for me, attorneys often find themselves in a position to make the big score. For me it was a personal injury case that netted enough to pay off my credit card debt and the loan on my home, but it was only after struggling for twenty years that I finally escaped the credit trap and became debt free. For most entrepreneurs bankruptcy or death will be their only way out.

The above article is from my new book, Go Broke, Die Rich, Turning Around the Troubled Small Business. For an entertaining perspective on credit cards read my novel Plastic Gods. Visit my website at http://williammanchee.com./

Getting the Mail Can Be A Risky Business

Today I went out and got the mail and discovered I'd recieved a check made out to me for $6,000.00. All I had to do was deposit it and it was mine to spend. This happens all the time and I'm sure it has happened to all of you. Of course, I shredded it as the attached financial disclosure indicated the interest rate was 98%! But can you imagine if someone got that check in the mail who was desperate for money to pay bills or wanted something that they ordinarily couldn't afford. The temptation to cash that check would be staggering.

Along with the $6,000 check there were three credit card solicitations offering guaranteed acceptance with credit limits of $2,500 to $5,000. Of course the lowest interest offered was 29%. In the first quarter of 2010, according to the marketing intelligence firm, Mintel Compermedia, total credit card direct mail solicitation volume was 1.2 billion pieces! This is an unconscionable abuse by the credit card industry motivated by greed and a reckless disregard for their customers' well being. At a time when interest rates are ridiculously low and banks can get all the cheap money they want, they shouldn't be trying to fleece the American consumer. Unforturnately, credit card lending is so lucrative they can't help themselves.    

So, I tell my clients they shouldn't feel guilty about filing bankruptcy as they have been lured into this credit trap by greedy lenders who care nothing about how predatory lending hurts the people who get caught up in it. When they lure people into buying things they can't afford they reap big profits but are unsympathetic when their customers lose their job or get sick and can't pay the bills.

These finance companies, payday lenders, banks, and credit card issuers will turn on you the moment you get behind on a payment. They'll call and harass you, send you threatening letters, and destroy your credit without giving it a second thought. I see this everyday and it sickens me. I got so angry one day I wrote a poem about it one night.  It's called Plastic and you can read in my novel, Plastic Gods, A Rich Coleman Novel, Volume 2.

So, when you go out to the mailbox marshall all your strength and will power, and do what I do, immediately shred any credit card applications or preauthorized checks that you find. Also, look in your credit card bills and shred any unsolicited checks that they slip into the bill so they won't be a temptation in the future. You have to be vigilant to avoid the credit trap, but you can do it!

Delay in Foreclosing Causing Much Grief and Financial Loss to Consumers

One of the most perplexing problems for consumers who have surrendered their home in bankruptcy, is that it often take months or even years for the lenders to get around to foreclosing. On the surface this might not seem like a big deal since the property becomes the mortgage servicer's problem once it is surrendered, but that's not the case at all.

Once a discharge has been granted the consumer no longer is liable for any deficiency the lender may suffer, but he still remains liable for taxes and homeowner's dues. We frequently find ourselves having to respond to lawsuits from homeowner associations for unpaid dues or threats from municipal authorities theatening to impose fines for properties that are falling apart or becoming overgrown with vegetation. Clients are frustrated by this and cannot understand why this property that has long since been surrendered in bankruptcy is still a problem for them.

What is even worse for the consumer, however, is the propensity for servicers to continue to send monthly statements, insurance notices, escrow statements, default notices and a myriad of other paperwork to the consumer who no longer has the account with the lender or servicer since the debt has been discharged. This continued communication with the debtor is in clear violation of the discharge injunction yet it seems to be unstoppable. 

We have filed suit on numerous occasions against mortgage services for these types of violations, settled the cases, only to have the notices continue again before the ink is even dry on the settlement. Sometimes it's immediate but often it is a year or two later when the notices start coming again. A lot of times this happens because a new servicer is assigned to the account and, for some unknown reason, the account pops up again as an active account. It gets even worse if the new servicer starts reporting the debt on the consumer's credit reports which is a common occurance.

I guess the ultimate question is why does it take mortgage lenders so long to foreclose? I know of people who have lived rent free in their homes for three or four years after they stopped making payments. What's up with that? I know sometimes there are chain of title issues due to the mortgages being transferred so often between securitized trusts and the government has put a lot of heat on them to try to do modifications. But from what I have seen of the modification process, the mortgage servicers aren't really serious about modifying loans and are only going through the motions--stringing customers along with the false hope that they will get a second chance with their mortgage when they have no intention of giving it to them.

The bottom line is consumers who have surrendered their homes in bankruptcy often suffer extreme mental anguish and financial loss due to the mortage servicer's delay in foreclosing on property that has been surrendered to them. Fortunately, there are remedies under both state and federal laws.  For more information about remedies available visit our website at http://mancheelawfirm.com/.

In my spare time I write novels and the next one coming out this fall is about a family that is victimized by a predatory mortgage lender. So if you'd like to see a practical example of what is happening in the marketplace today visit my website at http://williammanchee.com/ and check out Unconscionable, a Rich Coleman Novel Vol. 3. While you are waiting for Unconscionable to come out read Plastic Gods, A Rich Coleman Novel Vol 2. It's a timely financial thriller about a predatory bank and how one attorney lost everything when he became a threat to its lucrative business.

Creditors Confused by Chapter 13 and Consumers Suffer

Creditors have a difficult time properly reporting a chapter 7 bankruptcy to the credit bureaus. Whether it’s anger or resentment over having to write off the debt, ignorance or incompetence is anybody’s guess. The proper reporting of a discharged debt is to report the account as “closed,” the balance at “zero” and some mention of the bankruptcy. Sometimes it is shown as “included in bankruptcy” or “chapter 7 bankruptcy.” Rarely do creditors state that the debt has been “discharged in bankruptcy” even though that would be the most accurate way to report it. The fact is creditors are vindictive and if there is anyway to legally hurt a consumer coming out of bankruptcy, they’ll do it. So, it is important for consumers to review their credit reports three or four months after discharge to be sure the chapter 7 debt has been properly reported.

It is even worse with a Chapter 13. A lot of creditors don’t understand how a chapter 13 works and they tend to either treat it like a Chapter 7 or they just freeze the account and quit reporting it because they know they will eventually be paid all or a portion of their debt. The proper way to report the debt is to show the account as “Open,”state that it is included in a “Chapter 13 bankruptcy and report any changes that occur if payments are made by the Chapter 13 Trustee. But, rarely do creditors properly report a chapter 13 bankruptcy to a credit bureau and when the discharge order is finally signed three to five years later, its often ignored.

There is a lot of chapter 13 debt that is sold to debt buyers and by the time the debt is discharged it may have changed hands several times and the odds of the holder of the debt getting notice of the discharge is slim. So, long after the bankruptcy was filed it is common for consumers to suddenly get phone calls and letters trying to collect a discharged debt. Or, the consumer will have credit denied and discover it was because debts that were discharged in bankruptcy have suddenly appeared on his credit report.

Our firm offers a free discharge compliance review including an examination of your credit reports. For more information check out our website at http://mancheelawfirm.com/. You have nothing to lose but your bad credit.