asset protection

How I Ended Up in Bankruptcy Blog Series {Video FINALE & Q&A}: Should I file bankruptcy?

Today, I’m going to answer some of the biggest questions I’ve received from the Bankruptcy Blog Series.

In this video, I cover:

  • Questions you should ask yourself BEFORE filing bankruptcy
  • What factors you should consider when filing bankruptcy: how much debt do you have, who do you owe it to, etc.
  • What to do instead of filing 
  • Asset Protection
  • And the truth about what would happen to our economy if we all paid off our debt

I’m making this video for you as a wrap up to the Bankruptcy Blog Series.

If you read the series, you heard me talk about my decision to file bankruptcy: how I made it, why I made and how I protected my assets so I was able to bounce back really quickly afterwards.

Today, just two years after filing bankruptcy, my companies are doing better than ever. They’re run by CEOs, and I’m doing just what I do best in those companies as opposed to before I filed bankruptcy when I was trying to hold it all together myself.

I had great companies in some ways, but I was struggling to do it all. I felt like I was all alone. I felt very burdened. I had the wrong business model. I really was making a limited impact in the world.

Today, my impact has expanded greatly, and I’m able to serve in the deepest possible ways. And that was because I was able to make the decision to let go at the right time. And that’s what I covered in the bankruptcy blog series.

So, you all had some questions, and here I am today to answer them for you.

The biggest question that I got asked is:

When should I file bankruptcy? Should I file bankruptcy?

Here’s my answer to you on that: If you are going to file bankruptcy, don’t do it on a small amount.

I filed bankruptcy on over $500,000 dollars of debt. What that meant was that I really, fully leveraged my credit score completely before making the decision to file bankruptcy. Now, if I only had $15,000 or $75,000 worth of debt, it probably would’ve been just as easy to figure out how to make the money to pay off the debt.

And that’s where I want you to start.

If you only have a small amount of debt, I want you to be focused on How can I make more money to, not only pay off the debt, but maybe even take on more debt and leverage all of the resources you have available to you?

That’s really important.

If you’re looking at bankruptcy, you’re really looking at What is the most responsible thing that you can do for the overall situation?

That’s what I did.

I looked at what would be the most responsible thing that I could do. Could I have earned the $500,000? Yes, probably. But would that have been the most responsible thing to do? No, because the way that I would have needed to do it would not have been in deepest service to the world. I could have continued to run the business models that I had created, which were serving in some ways, but they really weren’t of deepest service.

So for me, filing bankruptcy, letting go of $500,000 of debt really made sense.
should I file bankruptcy

For you, would it make sense? Well, we have to look at:

What would it take for you to earn the money to pay back your debt?

If it wouldn’t take much (and sometimes like it feels like it would take a lot, but you just haven’t gotten the right guidance yet, you haven’t got the right support to really tap into the gifts that you have to give to the world. If you can tap into the gifts that you have to give to the world – in the right income model – and pay back the debt, I say do. that. In fact, maybe the debt can be a motivator for you to do that instead of sapping your energy.

Now, if the debt is such an amount that it’s just sapping your energy, and you see no way you could possibly give your gifts in the world and pay back your debt, that’s the time to file bankruptcy.

But again, look at, have you leveraged all of the available credit that you have before you make the decision to file bankruptcy? Have you really tapped all the resources available to you? Because you don’t want to file bankruptcy unless you’ve done that.

There’s another question..

Who do you owe the money to?

If you owe the money to family and friends and colleagues and clients, I don’t think you’re really a good candidate for bankruptcy. Because, is it really the most responsible thing to not pay back those people? No, probably not. Instead, if they are people that are going to be significantly impacted personally in their lives by your decision to file bankruptcy, you really have to look at how can you earn the money to pay back the debt that you’ve borrowed.

In contrast, if you owe big banks and credit card companies, they have built into their algorithms and metrics that some number of people are not going to pay back their debt. So the impact of you not paying back your debt is much, much less significant and in some ways, is part of what keeps the economy going.

If we all decided to pay back our debt, the economy would actually collapse. 

Not paying back your debt is built into the economy as it stands right now, when you are not paying back your debt to big banks and credit card companies. But, if you’re not paying back that debt to clients, friends and colleagues – that’s a whole different story.

In that case, you really want to look at how you can earn back that money. And maybe it involves talking with them, working with them, asking for their support – not just financially but emotionally, maybe strategically. Maybe saying, “Hey, we’re all in this together. How can we come up with the money to get you your money back using the gifts and services and talents that they invested in you in the first place?”

So, those are some of the biggest questions that I got after the bankruptcy series.

Another question that I received is about…

Asset protection – When is the time to do asset protection?

The time to do asset protection is NOW, before you’re facing bankruptcy.

My asset protection started in 2005. I had no idea I was going to file bankruptcy at that point. I barely had any debt at that point. In 2010 I did more asset protection, again, not knowing that I was going to file bankruptcy.

It wasn’t until 2012 that I did file bankruptcy.

So why did I do asset protection in 2005 and in 2010 if I didn’t know that I would be filing bankruptcy?

Because…
I’m a business owner.
I’m a risk-taker.
And I want maximum reward for the risks I take with the least amount of personal risk.

I know that setting my assets up from the beginning was the right thing to do regardless of what might happen down the road.

If you have a vision and you’re doing big work in the world, it’s the same for you.

You set your assets up right, out of your estate, outside of any risk of creditors, divorce – anything like that, because you believe in what you’re doing. You believe in the work you’re doing in the world. And you want to set it up to benefit for multiple generations, not just for right now.

So the time to do asset protection is… as soon as you’re thinking about it. 

Once you’re already in debt or you already have risk from creditors, it’s really too late. At that point, any form of asset protection can be considered Fraudulent Conveyance.

Thank you for sticking with me through this series and taking part in the journey.

I hope to see you in the comments!

If you have any questions about anything in the Bankruptcy Blog Series or anything in the video, please leave a comment below.

For anything super private, feel free to email me at support@eyeswideopenlife.com – otherwise, do post it in the comments and share so that everyone can benefit from your question and our answers.

See you next time!


And keep an eye out for my books “Financial Liberation” and “You Are Not Your Credit Score” in 2015. 

Read the full series here: Part OnePart TwoPart ThreePart Four, Part Five & Part Six.

Bankruptcy Blog Series {Part 6}: How I Protected My Assets & Rebounded From Bankruptcy Better Than Ever

So, the bankruptcy was filed. Now, the story of how I rebuilt my life and my businesses and protected my assets…

(Get caught up on the whole series here: Read Part OnePart TwoPart ThreePart Four & Part Five.)

So now, the question you’ve all been asking…

How did I bounce back from bankruptcy so quickly and protect my most important assets along the way to make rebound, rebuild and repair easier than you would think?

Before I share the details, let me remind you that it was only two years ago (nearly exactly two years ago in fact) that I filed bankruptcy. Two years later and my work is being supported by companies that are ten times (maybe even 100x) as strong as the companies supporting my work then. I am making far more money than I was even at the height of my pre-bankruptcy success in 2009, the year my former companies were earning just shy of $2,000,000. And, conflict has nearly been eradicated from my life. Contrast that with a life full of conflict prior to the bankruptcy.

Now, I’m not saying that bankruptcy is the solution for everyone. There’s a lot of people who should NOT file bankruptcy. I’ll speak more to who those people are and what kind of debt is not appropriate for resolution via bankruptcy in a future post. But I am saying that when it’s time to let go of anything (whether through bankruptcy, divorce, breakup, or even death), when done well and right, you will be rewarded. As I am being rewarded today.

So, how did I do it well? And what can you learn from it? failures

First of all, I invested my credit in things that could never be taken away from me via the bankruptcy process. My education, coaching, self care, well-being, travel, experiences, and community. Ultimately, I invested in my resourcefulness and creativity. The best part about that is that no matter what happens in your life (unless its death), resourcefulness, creativity, and true community is never at risk.

Second, I didn’t own the pre-bankruptcy companies that supported my work and I don’t own the post-bankruptcy companies that support my work now. All of the companies that support my work, our customers and clients and pay me to do my work in the world are owned by irrevocable trusts of which I am just a beneficiary, but have no direct control over the assets. My stepmom and grandmother each set up a trust for me and it was these trusts that started the companies to begin with. I never owned them, therefore they could never be taken from me in a bankruptcy.

Before you go off thinking I’m some kind of trust fund kid, let me correct that misperception.

My grandfather left my grandmother enough money to live on after he died, if she would have died 10 years ago. She didn’t. She’s still alive. And has outlived her savings. She has social security and kids who make up the difference in financial and personal support. Back in 2005, she put a few thousand dollars into a trust for me and the Trustee of those Trusts used that to start the first two businesses to support my work outside of my law practice, which was owned directly by me.

Then, in 2010, my stepmom created another trust for me and also put in a few thousand dollars of what my dad had left to her after he died. That trust started two more companies to replace the initial two that had not been built properly with the right foundations, team support or structures. Today, those companies are worth millions of dollars and if they are ever sold, all of the sale proceeds will be protected in that Trust, excluded from estate taxation at my death, and totally protected in the event of my death, a divorce or any type of creditor event.  The Trust is set up to exist for generations.

And, so, all of the businesses supporting my work in the world, including my intellectual property, client lists, and the income coming into those businesses, were totally protected and I was able to bounce back from bankruptcy quickly leveraging the resources I had invested in (like my education, my network, and my community) that could never be taken away from me.

I wonder … are you investing in things that can never be taken away from you?

By intentionally setting my life up to be able to take big risks and then taking them, I have been significantly rewarded. And, you will be too, when you do it.

When you know the value of what you offer, invest in long-term asset protection to assure your work serves for generations. Tweet It!

This is the final written post in this series of How (and Why) I Ended Up in Bankruptcy. And it’s been less about the debt, money and bankruptcy, and more about the story of my own personal Heroine’s Journey. 

So many of us are in the midst of some sort of big shift, ripping away of past comforts and beliefs, stretching further than we believed we could. And being rewarded for it greatly.

We come out on the other side better and stronger than we could have ever imagined. 

Thank you for coming along for the journey. I’ll be sharing more details about all of it in a future book, “You Are Not Your Credit Score.”

Next week, I’ll be posting a Bonus Q&A video for the FINALE, where I’ll be answering your biggest questions from this series. If you’ve got a question for me, be sure to post it in the comments below (or on any of the previous blogs in this series) and I’ll personally answer them in the video finale next week. 

Can’t wait!

Big Love,

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Stay tuned for our big FINALE, and keep an eye out for my books “Financial Liberation” and “You Are Not Your Credit Score” plus Get the Financial Liberation Mini-Course here, nowRead the whole series here: Part OnePart TwoPart ThreePart Four & Part Five.