Prosperity Coaching Paula Langguth Ryan Bounce Back From Bankruptcy

Transcript of the I Hate Debt radio show with
Host: Tom Allen
Guest: Paula Langguth Ryan
Segment 1

Tom: I’m Tom Allen, and I hate debt. I invite you to join with me in living a debt-free and prosperous life. You may be down, but you’re not out. You can come back from financial troubles, and you can go on to live a debt-free life. Hey, there’s even life after bankruptcy, and I have proof! With me today is Paula Ryan, a highly successful prosperity coach and author of "Bounce Back from Bankruptcy." She’s here to make sure you’re on the right financial path and that you stay there. Paula, you’re a successful author, a speaker, and a prosperity coach, but it wasn’t always that way.

Paula: It was not, Tom. It’s good to talk with you again and be here on your show again.

Tom: Well, thanks and welcome back! How bad were things before you actually bounced back?

Paula: Let’s put it this way: I was a 21-year-old single white female, and bankrupt!

Tom: Twenty-one and bankrupt already?

Paula: Yes.

Tom: That’s quite an accomplishment!

Paula: Yes, $35,000 in debt racked up in the three years I was even allowed to have a credit card. It’s pretty common, too.

Tom: Was there any special trauma that happened, or was it just overspending?

Paula: It was just overspending. I think that at the time, I used money to buy friends, so the majority of my debt was from buying gifts for other people. We’d go out to dinner and I’d get the tab—that sort of thing.

Tom: Okay. So at 21, you had $35,000 in credit card debt.

Paula: Yes, and then I went bankrupt. Three years later, I had $3,000 in credit card debt! I said to myself, “Hold on, we’re not doing this again!”

Tom: Sounds like you were a little bit on—or at least starting to go back on—a roller coaster back down that path.

Paula: Well, see, that’s the problem: most people think bankruptcy will solve their problem. But the problem is that we’ve learned these habits, and we’ve gotten into this routine of using credit to basically extend our income, and we don’t change that just because we went bankrupt.

Tom: Oh no, especially if we think it’s really easy.

Paula: Yes, and then people start extending you new credit after bankruptcy and it’s just so much easier to take that credit rather than waiting to get assistance set up to actually pay cash for things. People get in over their heads again, and then there’s no way out. That’s the hard part.

Tom: Well, how long did you go before you felt like you had enough life experience and enough experience in the bankruptcy process and the credit process to start to put together your book, “Bounce Back From Bankruptcy”?

Paula: It’s a mouthful of alliteration, isn’t it? Well, what happened was, I’d gone bankrupt when I was 21, and about six years later, a friend of mine was going through bankruptcy. She knew I had gone through it and so she kept asking me what to do next. And then one day she said, “Will you just do me a favor and write all this down for me? It’s be a whole lot easier if I could just refer back to it at 2am in the morning when I’m sweating it out instead of calling you all the time.” So that’s when I wrote the first edition: 64 pages, saddle stitched with little staples. But we sold 10,000 copies of it because people were just so hungry for step-by-step instructions on what to do next, and how to make better choices, and how to know if this credit offer is a good one or not. Not just the namby pamby stuff they always tell you, like “Make sure you pay all your bills on time…”

Tom: Right!

Paula: Yeah, that stuff doesn’t help you. You’ve got to change the way you are using money.

Tom: Well, obviously there are a lot of good bankruptcy attorneys, and if you are going to declare bankruptcy—even though I guess you can do it yourself—I would recommend that you consult with a bankruptcy attorney. But they are not going to have the expertise and certainly not the personal experience that you’ve had to be able to counsel someone on what to do after bankruptcy.

Paula: Yeah, when we left the courtroom, my attorney shook my hand and said, “Good luck”, and I said, “What are we going to do now?” and he replied, “That’s it. Good luck.”

Tom: You’re on your own!

Paula: Yes, and there was no one to turn to. At the time, there was one book out there, by an attorney, Jonathon Turah, who’s a consumer advocate. He had written a book in order to help people, called “Fresh Start”. But that was it: there was nothing out there by someone who knew, who’d actually experienced the shame and the guilt and the fear, and “What does this mean to my credit report” and “is my life over” and “will I never, ever have another car or a home”. So to be able to address that for folks in a one-on-one situation and say, “here is the reality of the situation, this is all this means”--to be able to help people get through that--was really a blessing that I was able to do.

Tom: Well, I know you have put your information not only in the book (and I’m going to get this right this time), "Bounce Back from Bankruptcy"”, but you also have a fabulous website, artofabundance.com.

Paula: Thank you!

Tom: And I know that, from my standpoint, getting out of debt is one part of the process, but you must change your habits, your thoughts, and your feelings about money in order to stay out of debt and move on to living a debt-free and prosperous life.

Paula: That’s why I wrote my next book, which isn’t actually finished yet because there’s one more section they want me to add, called “Break the Debt Cycle for Good”, which is based on a workshop I do. I subscribe to a theory that whatever product you create, you next product should be designed to make that obsolete. So I thought, how do I get people who are going bankrupt to stop going bankrupt? Help them to break the debt cycle?

Tom: We will be on the look out for “Break the Debt Cycle for Good.” Now, on average, there’s one bankruptcy filing in America every 19 seconds. So we are talking about a huge problem. What would be your advice to someone, what’s the first thing someone should do if they are in that position where they have already or are about to file bankruptcy?

Paula: The first thing anyone should do who is very tense about their money situation, before they even consider bankruptcy, is to check and see what the exemptions are in your state’s law. Exemptions are how much you are allowed to keep if you decide to go bankrupt, because the law varies from state to state. What happens is that a lot of people decide to take all their money out of their retirement account and use that to pay the bills till they get back on track, and then they go bankrupt down the road, only to discover that almost every state exempts your retirement account. So there was no reason to liquidate their retirement savings—they could have gone bankrupt without doing that.

Tom: Oh my.

Paula: Yes, they are basically mortgaging their future completely.

Tom: And because the laws do vary state by state, that’s why I would suggest that they at least consult with a qualified bankruptcy attorney. You don’t want to make a costly mistake based on common sense.

Paula: Exactly. And almost every attorney I know will give you a free consultation to help you decide if bankruptcy’s the right option for you. A lot of them are very good about saying no and sending you to consumer credit counseling, and consumer credit counseling is getting good about saying, “We can’t help you. You’re better off going bankrupt.” But they’ll give you a free consultation, and even if you want to do it yourself, go ahead and fill out the paperwork yourself, but take $150 and have an attorney review your paperwork. If you miss something, you’ll wind up having to pay that debt. Or if you borrowed money or charged something within the timeframe that’s allowed, then that debt’s not even allowed. Or if you charged all of your income tax on your credit card, those income tax debts are not going to be dischargeable. A lot of student loans won’t be dischargeable.

Tom: Okay.

Paula: People think, “It was seven years ago, I went to college.” No, if you had ever stopped that clock on your payments and got a forbearance, that stops the clock. It’s seven years of continuous payments, which would be about 25 years from when you graduated from college.

Tom: My goodness.

Paula: People just don’t know those things.

Tom: Briefly, what would you say was the worst mistake that you made after you got out of debt.

Paula: The worst mistake I made was jumping at a credit card offer that I got, which was for something called the Universal Card. It wasn’t affiliated with a bank, but was rather a very expensive catalog card. The advertisement enticed me with “Get Your Very Own Secured Visa Card”, but what I actually got was their catalog, and after I charged $3000 worth of merchandise, they sent me a list of all the secured credit cards I could get for free.

Tom: Boy!

Paula: Yes. It was an expensive lesson, but it taught me that people really need to know which credit cards that are offered after bankruptcy really do help their credit.

Tom: Super. In our next segment, we’re going to be talking about the obstacles that you meet on the way out of debt. So stay tuned: Paula Ryan will be right back. For more information on getting out of debt—and more importantly, staying out of debt—visit IHateDebt.com. I’m Tom Allen, and I hate debt!

Read the transcript of Paula's next segment Obstacles on the Way Out of Debt

If you find this information helpful I ask you to contribute $1 (or more) to help me help more people. You can contribute using PayPal using this button