It’s a common experience. People visit their lawyer – and they often feel better.
Why would that be the case? Why would anybody go see a lawyer in order to feel better?
There’s a very good reason. People who are upset or angry either may or may not feel better after they see their lawyer. But people who are in financial trouble can often feel much better after they see their lawyer.
Why is this so? It’s because people who are behind in their payments often don’t know what the likely outcome of their situation might be. Most people don’t exactly know what a creditor can – or cannot – do when a borrower gets behind on their payments. Many people have a vague, generalized sense that a debtor’s wages can be seized, or garnished. And there are often stories about cars being repossessed in the middle of the night after an owner gets behind on their car payments. Debtor’s bank accounts can be frozen or drained, and other assets can sometimes be seized as well.
It’s enough to make a borrower nervous. So when the pressure gets too high, borrowers sometimes turn to legal counsel to find out exactly what their rights – and liabilities – might be.
It’s a tough position to be in. Unforeseen events can result in an unexpected loss of income, or significant additional debt. A prolonged illness, divorce, or job loss can all result in a significant – and sudden – loss of income. But when something like this happens, the bills usually don’t stop coming – only the income. This can suddenly place even the most prosperous, thrifty wage earner into a far different position than they ever expected to find themselves in.
With respect to the incurring of unnecessary debt, Gordon B. Hinckley, a prominent leader in the Mormon Church, had this to say:
“I commend to you the virtues of thrift and industry. It is the labor and the thrift of people that make a nation strong. It is work and thrift that make the family independent. Debt can be a terrible thing. It is so easy to incur and so difficult to repay. Borrowed money is had only at a price, and that price can be burdensome. Bankruptcy generally is the bitter fruit of debt. It is a tragic fulfillment of a simple process of borrowing more than one can repay. Back in 1938, I heard President J. Reuben Clark, Jr. . . . talk about interest. He said:
“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours; it never has short crops nor droughts; it never pays taxes; it buys no food; it wears no clothes; it is unhoused and without home and so has no repairs; it has neither wife, children, father, mother, nor kinfolk to watch over and care for; it has no expense of living; it has neither weddings nor births nor deaths; it has no love, no sympathy; it is as hard and soulless as a granite cliff. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.” (In Conference Report, April 1938, page 103.) (Quoting from Gordon B. Hinckley in March, 1990 Ensign magazine).
The ready availability of credit has had a profound impact on the economy of this country over many years. Freddie Mac was set up by the Federal Government many years ago in order to make money more readily available to the home-buying public. And the use of credit has made commercial development possible that never could have otherwise occurred. (The construction of Disneyland was made possible through borrowed funds). Wisely used, loans and credit can be powerful tools. But unnecessarily used, they can lead to almost overwhelming financial distress.
Lending or borrowing money, the use of credit, and obtaining loans all involve complex legal principles, regulations and considerations. Persons involved in significant lending, borrowing or debt workouts would do well to consult legal counsel.