January 26, 2025 • 37 mins
In this episode, Teresa shares a personal story of financial hardship during the 2008 global financial crisis, highlighting the stress and challenges related to sudden job loss and accumulating debt. Joined by bankruptcy attorney Alia Khan, they discuss the common reasons for bankruptcy, differences between debt consolidation and bankruptcy, and the process and benefits of filing for Chapter 7 bankruptcy. Alia also addresses common concerns about credit impact and provides guidance on reestablishing credit post-bankruptcy. The importance of financial education, budgeting, and leveraging tools like bankruptcy for financial relief is emphasized, offering hope and practical advice for those overwhelmed by debt.
To learn more from Alia, be sure to follow her on Tik Tok and Instagram @thebankruptcyqueen
You can also visit her website and reach out to her directly to connect with her about your options.
Contact Information:
Alia Khan
akhanlawoffices.com
(800) 419-8950
Thank you for tuning in! I truly appreciate every single listener—whether you’re here for the first time or have been with me from the start.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Hi, everyone.
Welcome to the show and happyMonday.
On today's episode, we're goingto dive deep into financial
hardships and the stress fromsudden job losses and unexpected
bills that you may not be ableto pay to the slow and steady
accumulation of debt.
(00:23):
Financial shocks can leave usfeeling overwhelmed.
Overwhelmed and completelystressed out.
I know this firsthand becauseback in 2008, during the global
financial crisis, I found myselffacing a perfect storm of
financial hardship.
I had lost my six figure job.
(00:44):
I had nothing in savings.
I was going through a divorce,supporting three kids, one of
which who was attending aprivate high school with a
tuition.
My income had completelyvanished and I was drowning in a
sea of bills from rent, utility,and credit card debt.
(01:07):
I was using my credit cards tolive off, maxing them out.
every single time and thenapplying for a low interest loan
to roll the balance over.
And then guess what?
I would start using my fuckingcredit cards all over again.
I dug myself into a massive holeof debt.
(01:32):
Mostly I was just trying to putfood on the table for my kids.
And I remember a time when agood friend of mine invited me
over to her house.
to go grocery shopping in herpantry, just so I could feed my
kids.
Imagine how tough it is whenyou're asking your friends for
(01:54):
financial support.
It's humiliating.
I was going to thrift shopsbefore thrifting was a trendy
thing, like it is today, to buymy kids clothes and gifts.
This experience was incrediblyhumbling and it taught me how
critical it is to have a strongfinancial foundation.
(02:19):
If you grew up in a householdlike I did, I lost my father at
age 10.
My mom became a single parent tofour kids.
And despite her coming from avery wealthy family, she had no
experience managing money, whichmeant she couldn't teach us
(02:39):
those skills either.
And that's why I believe it's soimportant to start with the
basics.
If you're in over your head indebt, There are options out
there that you can leverage toget out of debt and eliminate
that mountain of stress.
(03:00):
Today I'm joined by a dearfriend of mine, Alia.
She's a bankruptcy attorneywho's seeing firsthand how
overwhelming financial stresscan be.
Her clients represent people whoare either drowning in debt have
taken second jobs just to get byto other clients who may have
(03:22):
large, homes, cars, and on theoutside, they look like they're
dripping in money, but they'reactually buried in debt because
they're living beyond theirmeans.
Sound familiar?
That means they're spending moremoney than they're actually
bringing in by chargingeverything to their credit
(03:44):
cards.
Alia has helped these clientsovercome debt and take
meaningful steps towardsachieving that financial
freedom.
And today she's going to sharesome invaluable insights with us
and we'll talk through what aBankruptcy really means and how
you can take control of yourfinances.
Alia Khan (04:08):
Silence.
Teresa (04:24):
debt like I did or maybe they decided to go through a
debt consolidation firm givenyour expertise in this area,
what are some of the most commonreasons people file for
bankruptcy?
Alia Khan (04:38):
Number one, they had job loss, or they got rid of
their overtime, or experiencedreduced hours.
So they're not making the samelevel of salary that they were
in the past.
The next reason is divorce.
Disability, things like that.
(04:59):
Expenses have gone up since thepandemic, groceries, gas,
utilities, rent has allskyrocketed and they're making
the same income.
So at the end of the month or atthe end of the year, they have
to rely on credit cards for allthe other necessities that they
can't pay out of their paycheck.
Teresa (05:22):
Do people come to you who might be considering debt
consolidation instead ofbankruptcy?
What's the real differencebetween the two?
Alia Khan (05:31):
Yes, 50 percent of my clients.
Come to me and they say I am ina debt relief or debt
consolidation program and I'mpaying X amount of dollars
monthly for the next five years.
That's usually what the debtrelief company puts them in.
(05:51):
those debt relief programs arenot actually paying the
creditors at all.
They are putting money in areserve and they're negotiating
out with the creditors.
as they please.
So during
Teresa (06:06):
So, um, We'll see you again.
Bye, everybody.
Bye.
Bye.
Alia Khan (06:25):
by this creditor, but I've been diligently making my
payments.
There's no actual protection inthat situation.
Other clients come to me andsay, I'm thinking about debt
consolidation.
I'm thinking about debtsettlement, but what's the
difference between that andbankruptcy?
Chapter seven bankruptcy is It'sone the best relief out there.
(06:48):
You wipe out your debt.
All of your credit cards, yourpersonal loans, medical bills,
old tax debt, vehiclerepossessions, payday loans, all
of that gets wiped out, assumingyou qualify for chapter seven
bankruptcy.
That's not the same as debtconsolidation.
Debt consolidation is a paymentplan and you don't wipe anything
(07:11):
out.
You're paying toward, these thatyou have.
Teresa (07:17):
Are there different kinds of bankruptcy?
Alia Khan (07:19):
Chapter seven is the favorite amongst bankruptcy
attorneys and it's the favoriteamongst clients because you get
to wipe
Teresa (07:28):
Yeah.
Okay.
Silence.
Silence.
Alia Khan (07:47):
and they need to file a chapter 13 to put a stop to a
home foreclosure or carrepossession or income that they
make is just too high.
to squeeze them into a chapterseven.
Now a chapter is better than adebt settlement or debt relief
program because a chapter 13 youare getting protection from the
(08:10):
federal court.
It's still a five year paymentplan, but at the
Teresa (08:15):
Okay.
That's the person that runs the,that's, that's the um, The VIRP,
has had significant meetingswith, with, uh, President
Trump's official officialadvisors for Trump.
Uh, to, to address, to addressthe, uh, the questions, the
questions that are being raisedby, uh, federated elections.
Alia Khan (08:37):
who make
Teresa (08:38):
So I'm going to start by explaining what is trans.
And how does it work?
So, um, to make this a bit moreuse friendly, I'm going to show
you how to input a trans to the,um, to the book.
So, um, if you look at what wehave here, this is a, uh, a
(09:01):
trans template.
and I'll see you in the nextvideo.
Bye.
Alia Khan (09:06):
do other things like put money in a retirement
account.
Put money in an emergencysavings.
Put money into a 529 if theychoose to do that.
Teresa (09:18):
What if they have a car loan and they're making payments
on the car loan?
What happens to the car inchapter seven?
Alia Khan (09:26):
Nothing happens to the car.
You get to keep your car
Teresa (09:30):
Okay.
Alia Khan (09:30):
as you continue to make payments.
You make your payment directlyto the vehicle finance company.
If you
Teresa (09:37):
Okay.
Um, Yeah.
Okay.
Alia Khan (09:57):
and it's only valued at 22, 000, for example.
You have too much negativeequity.
You could walk away from yourcar in the chapter seven
bankruptcy, and that entireamount would be wiped out.
And after the bankruptcy iscompleted and your case is
closed, you can go financeanother vehicle.
Teresa (10:18):
Okay.
Where is it?
Not as smart as I thought itwas.
It's as seamless now.
You're there.
It's as smooth now.
So instead of me asking you toget in I'm sorry, excuse me.
(10:39):
I'm asking you to get in frontof this thing.
I asked you to get in.
This thing.
I'm asking you to get in.
This thing.
You are a man.
I'm sorry.
I'm sorry.
I'm asking you to get in and sitin front of this thing.
I need to know exactly what'sgoing on in here.
very much.
(11:00):
Bye bye.
Silence.
Right.
Okay.
Okay.
Alia Khan (11:20):
if I live
Teresa (11:21):
very much.
We'll see you tomorrow.
Alia Khan (11:32):
they can actually protect when they file for
chapter seven.
Teresa (11:37):
There's a stigma that filing bankruptcy is bad for
your credit and that once youfiled, you never have the
opportunity to get new credit toapply for.
A car loan, a home loan.
You touched a little bit onthat, but do you find that when
new clients are coming to you,that's a big concern for them?
Alia Khan (11:57):
Yes, that is the first thing they ask my office.
Will I ever have credit extendedto me?
Will I be able to finance a car?
Will I ever be able to buy ahome?
during the life of thebankruptcy, so let's just say
chapter seven, it's a threemonth long process.
(12:17):
All of your credit cards thatyou were putting obviously
things on of that becomes nulland void and all of that debt
gets wiped out your personalloans, your credit cards, things
like that.
your
Teresa (12:30):
Right.
Bye bye.
(12:56):
Okay, Okay,
Alia Khan (13:15):
up to about 650.
you purchase
Teresa (13:18):
Okay.
Okay.
Okay.
Okay.
Okay.
Alia Khan (13:33):
of options for people who have filed bankruptcy they
can have credit extended tothem.
But you are absolutely right,Teresa.
That is the first question theyask, and they, they are very
afraid.
Teresa (13:50):
Yeah.
Yeah.
Alia Khan (13:54):
going to be tanked forever and they'll never be
able to do all of these thingsthat people want to do, like buy
a home and buy a car.
But it's important they actuallyapply for credit cards again.
I know it seemscounterintuitive, but in order
to build your credit score backup, you have to charge on a
credit card.
And.
Teresa (14:14):
exactly.
Yeah.
Alia Khan (14:16):
up.
Teresa (14:18):
That's encouraging when somebody goes to a debt
consolidation firm.
Doesn't that have some kind ofimpact on their credit
Alia Khan (14:29):
when you're part of a debt consolidation program or a
debt relief program, your creditscore is not rehabilitating in a
positive way at all.
It's still showing delinquentlate payments, nonpayment, many
(14:49):
clients think, erroneously thatthe debt consolidation company
is paying all of their creditorson a regular basis and they are
not
Teresa (15:02):
Sociology.
Oh, Get it together.
Oh, Get it together.
Do it.
Do it Do it Yeah.
Yeah.
Okay.
Alia Khan (15:22):
When they get sued or when there's delinquent
payments, Your credit is takinga hit throughout that entire
time until everything is
Teresa (15:33):
Wait.
Oh my gosh.
I'm so sorry.
Hello.
Oh my gosh.
yeah, I mean, I'm not going to,uh, can you hear me?
Alia Khan (16:20):
that way.
Teresa (16:21):
Have them do their homework and research and really
vet out what's the best optionfor them.
Silence.
Silence.
Silence.
Silence.
Silence.
(16:43):
Silence.
Silence.
Silence.
Alia Khan (16:52):
your credit score and your credit report is still
reflecting the debt is sittingthere for a bankruptcy.
As soon as we file yourbankruptcy, it's going to show
zero balance on all of yourcredit cards and personal loans.
then three months down the line.
Everything is going to showdischarged and your case will be
(17:14):
closed.
So you have nowhere to go but upa chapter seven bankruptcy.
Teresa (17:21):
Is it harder for someone to reestablish their credit
through debt consolidation thanfiling for, chapter seven?
Easy for me to do that.
Then I will tell you a littlebit more about myself, and uh,
what kind of people I am and seemy sense of humor and how it all
(17:42):
gets rolled together.
Alia Khan (17:43):
many times clients have come to me and said, I'm
being sued.
When you're being sued byCapital One, Capital One, for
example.
That's going to reflect on yourcredit report and it's tanking
your credit score.
Even though you thought you weremaking payments toward your
creditors chapter sevenbankruptcy, your score tanks
(18:06):
temporarily.
Then it goes up, then it tanksagain.
And then once your case isclosed in a couple of months,
You have to take some initiativeto start repairing your credit.
The only way to do that is byapplying for credit cards or an
installment loan.
Teresa (18:24):
Debt consolidation sounds scary.
You've got this risk, anddependency on this firm that
could be misrepresenting yourcase to these creditors or
banks.
And next thing you know, you geta call saying, hi, this is
Capital One.
We're suing you because you oweus XYZ.
(18:45):
It sounds much riskier
Alia Khan (18:47):
exactly.
You hit the nail on the head.
It's, there are so many and theyare in competition with
bankruptcy attorneys and we arein competition them.
We don't refer to each other, ifyou have a small amount of debt,
let's just say you have 5, 000worth of debt, that is something
where a debt relief or a debtsettlement company could help
(19:09):
you
Teresa (19:09):
And now, we're going to do a little bit of an analysis
so we're going to look at how soI'm a student at the University
of North Carolina, and I've beenhere for a few years, and I've
never really lived in a dorm,and now I'm going to look at the
units that we use for theseprograms.
Alia Khan (19:29):
without payment.
It's unethical.
Consolidation doesn't ask youfor money up front, they hide it
within their fees.
If you look at the contract,you've paid the debt
consolidation company doublethan what you would have paid a
bankruptcy attorney and abankruptcy attorney is wiping
out your debt.
The debt consolidation companynot only is charging you their
(19:51):
own personal fees, but they'renot wiping out your debt at all.
You're paying it back.
Teresa (19:55):
Let's say.
I want to file for chapter sevenbankruptcy and I'm in a
situation where I don't have themoney to pay you.
What are my options
Alia Khan (20:08):
My office tells them stop paying on everything,
Teresa (20:11):
Okay.
Okay.
Okay.
Okay.
(20:32):
Okay.
Alia Khan (20:37):
or family, or number four, they have a friend or
family member pay on thatperson's credit card.
I take credit cards from Grandmaor Uncle Joe,
Teresa (20:48):
Right.
Okay.
Okay.
Alia Khan (21:00):
about
Teresa (21:00):
Hi,
Alia Khan (21:22):
anywhere between 2, 500 to 4, 000.
Depending on
Teresa (21:27):
everyone.
Bye bye.
Um,
Alia Khan (21:54):
they could never pay that off in Yes.
I said, yeah.
I guess so.
Yeah.
Yeah.
worth of debt, and you get yourlife back.
(22:15):
There's no amount you can put onbeing able to sleep at night.
they feel so much relief on theday we file it's.
Teresa (22:26):
I bet they do.
The number one reason people arestressed is due to financial
Alia Khan (22:35):
Mm
Teresa (22:35):
struggles, hardships
Alia Khan (22:37):
Creditors don't only call debtor or the person who
used the credit card.
They call family members andfriends.
They call the person's job.
if they sue you and you don'tanswer the lawsuit because you
blow it off.
They will send judgment to youremployer and your employer is
(23:01):
mandated to garnish your wageswithin 10 days.
It's shocking.
And so that's an emergencyfiling at that point
Teresa (23:10):
it.
Alia Khan (23:15):
you probably didn't even owe that actual dollar
amount originally.
That is all of the fees.
Penalties costs associated withthe lawsuit that is tacked on
and they will garnish your wagesuntil it's paid off and many try
to get an exemption and say,Hey, I can't
Teresa (23:33):
Thank you.
Alia Khan (23:33):
this.
But guess what?
No judge
Teresa (23:36):
Silence.
Alia Khan (23:36):
going to actually grant you an exemption.
You have a job.
Therefore, can pay off the debt.
You're not insolvent in a wagegarnishment situation.
The good thing is.
If you get a wage garnishmentorder or you get a lawsuit,
don't feel hopeless, you canfile for bankruptcy and it goes
away permanently.
Teresa (23:56):
Bankruptcy doesn't seem as negative as many of us think
it might be you can still,reestablish your credit, have
the ability to buy a home buy acar down the road.
Alia Khan (24:09):
Right, and whatever that looks like for people.
Some people, they don't havecollege bound children or some
people have a pension.
I do think most people want anemergency savings fund.
If there's a car repair thatcomes your way, if there's an
emergency medical bill.
You need a little buffer in yoursavings account to pay that.
(24:34):
It allows
Teresa (24:35):
Yeah.
Yeah.
Alia Khan (24:39):
you to truly build.
Well, if you are strategic aboutit, know, everyone's situation
is different, and they may stillbe living paycheck to paycheck,
at least they're paying for theimportant things like rent, car
payment, food, utilities, gas,and their money isn't being
thrown at all of this junk debt,is credit cards, paydays,
(25:03):
personal loans.
Teresa (25:04):
Right, it may be impossible for them to ever pay
that off.
Alia Khan (25:09):
It's mostly impossible.
I'm honest with clients and Isay, you make 000 a year.
How are you going to pay 50, 000off, in your lifetime?
They never thought about it thatway.
don't think that they're lookingat their salary and looking at
the amount of debt they have.
(25:30):
They're so.
frustrated and ashamed andstressed and all of the feelings
that people have when you havefinancial hardship it's your
chance to say, Hey, I need towipe out this debt and I need to
walk in to the next year.
Being able to start thinkingabout budgeting better.
(25:54):
To, they're forced to live ontheir paycheck for a period of
time.
So that forces you to budget.
Teresa (26:01):
Yeah, I look at my own personal situation where my
mother had no idea how to managemoney.
She was a housewife living in avery social world, playing
tennis, playing golf.
And the last thing on her mindwas let's put a budget together.
And live off of it.
And we ended up, years later,after she blew through our
(26:24):
savings, sadly we had to go onfood stamps I remember my
brother and I being at the storewith her hiding in the
background because we didn'twant.
Any of our friends to see ourmom paying for groceries with
food stamps.
And we lived in a country club.
Like that was unheard of peopledidn't do that back then.
(26:44):
As parents today, it is our jobto help educate our kids on
managing their money becausethere's so many people out there
who don't know how they werenever taught and schools don't
have courses.
Alia Khan (27:02):
Absolutely.
And that's what a lot of clientssay.
They say, my parents were indebt too, and I never got any
support or help from them.
And now you're asking me to.
Do a good job with managingcredit and colleges extend
credit to 18, 19 year olds whodon't really know how to manage
(27:26):
their money.
There's a million reasons whypeople get into debt and some
reasons are very sad and otherreasons are just basic budgeting
whatever the reason is.
The client is very scared andnervous that as their attorney
(27:47):
or the actual federal courttrustee is going to ask them,
well, why did you get into debt?
Let me tell you, nobody cares.
My job is to tell you.
Hey, you qualify for bankruptcy,or you don't qualify for
bankruptcy, and here's what youcan save.
And here's what you get to keepand here are all the protections
(28:10):
you have and here's the processand how long it's going to take.
Teresa (28:16):
As their attorney, when they're going through this
process, what is your roleversus what they actually have
to do?
Mm hmm.
Mm hmm.
Alia Khan (28:27):
There's a lot of heavy lifting that happens prior
to us filing the case andattending the court hearing
together on zoom.
So when they call our office,they get vetted.
They have to give us informationabout their income, household
size, assets.
(28:49):
Then we tell them, yes, youqualify for bankruptcy.
Now, these are all the documentsyou need.
There
Teresa (28:56):
hmm.
Uh,
Alia Khan (29:18):
There's a whole
Teresa (29:19):
I don't have any questions.
If you've got any questions for5010 or something, please do not
hesitate to reach out.
And I'm sure that these folkswill answer any questions that
you have.
And we will be happy to helpyou.
Thanks, everybody.
So now, I'm going to go aheadand turn it over and give them
the opportunity to take theirquestions.
(29:40):
That's my passion for two weeksago, I was excited to find out
your success story.
So, it's been a pleasure.
So are you sure you want to dothis?
Is it going to be hard?
It's going to be hard.
Tell us how you feel about it.
And what it looks like.
Yeah.
(30:01):
Okay?
Yeah.
Okay.
Yeah.
(30:24):
Okay.
Right.
Alia Khan (30:52):
And then that's it.
Teresa (30:53):
You talked about how relieved people feel after
they've filed.
Alia Khan (30:59):
Any client that ever talks to me after the fact is so
grateful and so happy.
The phrase I hear a lot is thisis a weight that got lifted off
my shoulders.
I feel so much better.
I feel like I'm in a betterspace with my children.
I feel like I'm in
Teresa (31:17):
Hello, everyone.
Alia Khan (31:30):
I also think they didn't know that this process
was going to be as seamless asit really is.
Teresa (31:36):
They go in frightened because of the unknown and
you've educated them, guidedthem, coached them
Alia Khan (31:46):
for sure.
I see a lot of comments onsocial media about bankruptcy
being this immoral decision andpeople need to pay their bills.
The client is crying and theyfeel ashamed they are coming to
the table as bankruptcy beingtheir last resort.
Bankruptcy should be your firstresort.
(32:07):
If things are gettingoverwhelming, don't wait to get
sued.
If things are gettingoverwhelming, don't wait until
there's a lien on your home.
You
Teresa (32:15):
Right.
Yeah.
Alia Khan (32:41):
Have a great team in place.
I have one paralegal that I'vehad for about 10 years.
We just hired another one.
Those are the only two womenyou're going to be talking to
besides me.
And they are extremely kind toour clients.
They make them feel better andis never judgment when you're
(33:05):
speaking to our office.
Teresa (33:07):
For those that might be considering bankruptcy, you get
to keep your car, your house,the things inside your home that
you bought on credit card andreestablish your credit.
It's a way for you to be able tostart over There's tools out
there for us for a reason, and Idon't think people should be
(33:27):
ashamed that they have toleverage them.
And bankruptcy is one of themfor financial hardship.
Alia Khan (33:33):
Absolutely.
That's what I tell clients.
And a lot of my followers aswell.
It is created federal relief foryou.
You're not breaking the law.
The United States created it.
For people who have overwhelmingdebt a way to
Teresa (33:51):
Yeah.
Alia Khan (33:51):
out of it and you get to protect your pension, your
retirement accounts, home, yourcar.
The point is you get to get ridof the debt that's bringing you
down allow yourself to keep thethings that are important to
you.
Teresa (34:07):
For listeners who might be feeling overwhelmed.
By their debt and in the stateof California.
How can they reach out to you?
Alia Khan (34:16):
They can go to my website.
It's a con law offices dot com,and send me an email or call my
office we can have them assessedfor whether they qualify for
chapter seven or not.
If you live outside ofCalifornia, we can refer you to
(34:37):
an attorney.
that we work with in yourparticular state as well.
if you just want to hear aboutdebt bankruptcy, you can follow
me on Tik TOK and watch some ofmy videos.
I am the bankruptcy queen and myfull name is Alia Khan.
You'll be able to find me fairlyquickly.
but thank you so much, Teresa.
(34:58):
This was great.
Teresa (35:00):
I'm so glad you were able to join today.
Thanks again.
She really is the bankruptcyqueen.
Ali has 30, 000 followers, ifnot more.
And that tells you there'speople out there, 30, 000 of
them.
Looking for information onbankruptcy you can find her on
(35:22):
Tik TOK or Instagram atbankruptcy queen.
That's all one word.
Don't hesitate to follow her.
We'll have all the details ofher email address and where you
can contact her office in thenotes of the podcast.
Here's a quick recap of what wecovered today.
(35:42):
If you have questions aboutbankruptcy, reach out to Alia
directly.
If you follow her on Tik TOK shehas a lot of content with
questions, answers, Live videos,everything that you would need
if bankruptcy is the path foryou, don't be ashamed.
(36:02):
Don't be embarrassed.
It's a tool out there for you totake advantage of so that you
can find financial freedom andalleviate that stress that's in
your life, preventing you fromsleeping and living.
Once you've made thattransition, You can then start
putting a budget together andthere's plenty of information
(36:26):
out there on YouTube, differentpodcasts that talk about
budgeting.
So no matter what financialsituation you find yourself in,
just know that there's reliefout there and you don't have to
carry that burden any longer.
Thanks for listening, everyone.
Until next time.
Hi, everyone.
Welcome to the show and happyMonday.
On today's episode, we're goingto dive deep into financial
hardships and the stress fromsudden job losses and unexpected
bills that you may not be ableto pay to the slow and steady
accumulation of debt.
(00:23):
Financial shocks can leave usfeeling overwhelmed.
Overwhelmed and completelystressed out.
I know this firsthand becauseback in 2008, during the global
financial crisis, I found myselffacing a perfect storm of
financial hardship.
I had lost my six figure job.
(00:44):
I had nothing in savings.
I was going through a divorce,supporting three kids, one of
which who was attending aprivate high school with a
tuition.
My income had completelyvanished and I was drowning in a
sea of bills from rent, utility,and credit card debt.
(01:07):
I was using my credit cards tolive off, maxing them out.
every single time and thenapplying for a low interest loan
to roll the balance over.
And then guess what?
I would start using my fuckingcredit cards all over again.
I dug myself into a massive holeof debt.
(01:32):
Mostly I was just trying to putfood on the table for my kids.
And I remember a time when agood friend of mine invited me
over to her house.
to go grocery shopping in herpantry, just so I could feed my
kids.
Imagine how tough it is whenyou're asking your friends for
(01:54):
financial support.
It's humiliating.
I was going to thrift shopsbefore thrifting was a trendy
thing, like it is today, to buymy kids clothes and gifts.
This experience was incrediblyhumbling and it taught me how
critical it is to have a strongfinancial foundation.
(02:19):
If you grew up in a householdlike I did, I lost my father at
age 10.
My mom became a single parent tofour kids.
And despite her coming from avery wealthy family, she had no
experience managing money, whichmeant she couldn't teach us
(02:39):
those skills either.
And that's why I believe it's soimportant to start with the
basics.
If you're in over your head indebt, There are options out
there that you can leverage toget out of debt and eliminate
that mountain of stress.
(03:00):
Today I'm joined by a dearfriend of mine, Alia.
She's a bankruptcy attorneywho's seeing firsthand how
overwhelming financial stresscan be.
Her clients represent people whoare either drowning in debt have
taken second jobs just to get byto other clients who may have
(03:22):
large, homes, cars, and on theoutside, they look like they're
dripping in money, but they'reactually buried in debt because
they're living beyond theirmeans.
Sound familiar?
That means they're spending moremoney than they're actually
bringing in by chargingeverything to their credit
(03:44):
cards.
Alia has helped these clientsovercome debt and take
meaningful steps towardsachieving that financial
freedom.
And today she's going to sharesome invaluable insights with us
and we'll talk through what aBankruptcy really means and how
you can take control of yourfinances.
Alia Khan (04:08):
Silence.
Teresa (04:24):
debt like I did or maybe they decided to go through a
debt consolidation firm givenyour expertise in this area,
what are some of the most commonreasons people file for
bankruptcy?
Alia Khan (04:38):
Number one, they had job loss, or they got rid of
their overtime, or experiencedreduced hours.
So they're not making the samelevel of salary that they were
in the past.
The next reason is divorce.
Disability, things like that.
(04:59):
Expenses have gone up since thepandemic, groceries, gas,
utilities, rent has allskyrocketed and they're making
the same income.
So at the end of the month or atthe end of the year, they have
to rely on credit cards for allthe other necessities that they
can't pay out of their paycheck.
Teresa (05:22):
Do people come to you who might be considering debt
consolidation instead ofbankruptcy?
What's the real differencebetween the two?
Alia Khan (05:31):
Yes, 50 percent of my clients.
Come to me and they say I am ina debt relief or debt
consolidation program and I'mpaying X amount of dollars
monthly for the next five years.
That's usually what the debtrelief company puts them in.
(05:51):
those debt relief programs arenot actually paying the
creditors at all.
They are putting money in areserve and they're negotiating
out with the creditors.
as they please.
So during
Teresa (06:06):
So, um, We'll see you again.
Bye, everybody.
Bye.
Bye.
Alia Khan (06:25):
by this creditor, but I've been diligently making my
payments.
There's no actual protection inthat situation.
Other clients come to me andsay, I'm thinking about debt
consolidation.
I'm thinking about debtsettlement, but what's the
difference between that andbankruptcy?
Chapter seven bankruptcy is It'sone the best relief out there.
(06:48):
You wipe out your debt.
All of your credit cards, yourpersonal loans, medical bills,
old tax debt, vehiclerepossessions, payday loans, all
of that gets wiped out, assumingyou qualify for chapter seven
bankruptcy.
That's not the same as debtconsolidation.
Debt consolidation is a paymentplan and you don't wipe anything
(07:11):
out.
You're paying toward, these thatyou have.
Teresa (07:17):
Are there different kinds of bankruptcy?
Alia Khan (07:19):
Chapter seven is the favorite amongst bankruptcy
attorneys and it's the favoriteamongst clients because you get
to wipe
Teresa (07:28):
Yeah.
Okay.
Silence.
Silence.
Alia Khan (07:47):
and they need to file a chapter 13 to put a stop to a
home foreclosure or carrepossession or income that they
make is just too high.
to squeeze them into a chapterseven.
Now a chapter is better than adebt settlement or debt relief
program because a chapter 13 youare getting protection from the
(08:10):
federal court.
It's still a five year paymentplan, but at the
Teresa (08:15):
Okay.
That's the person that runs the,that's, that's the um, The VIRP,
has had significant meetingswith, with, uh, President
Trump's official officialadvisors for Trump.
Uh, to, to address, to addressthe, uh, the questions, the
questions that are being raisedby, uh, federated elections.
Alia Khan (08:37):
who make
Teresa (08:38):
So I'm going to start by explaining what is trans.
And how does it work?
So, um, to make this a bit moreuse friendly, I'm going to show
you how to input a trans to the,um, to the book.
So, um, if you look at what wehave here, this is a, uh, a
(09:01):
trans template.
and I'll see you in the nextvideo.
Bye.
Alia Khan (09:06):
do other things like put money in a retirement
account.
Put money in an emergencysavings.
Put money into a 529 if theychoose to do that.
Teresa (09:18):
What if they have a car loan and they're making payments
on the car loan?
What happens to the car inchapter seven?
Alia Khan (09:26):
Nothing happens to the car.
You get to keep your car
Teresa (09:30):
Okay.
Alia Khan (09:30):
as you continue to make payments.
You make your payment directlyto the vehicle finance company.
If you
Teresa (09:37):
Okay.
Um, Yeah.
Okay.
Alia Khan (09:57):
and it's only valued at 22, 000, for example.
You have too much negativeequity.
You could walk away from yourcar in the chapter seven
bankruptcy, and that entireamount would be wiped out.
And after the bankruptcy iscompleted and your case is
closed, you can go financeanother vehicle.
Teresa (10:18):
Okay.
Where is it?
Not as smart as I thought itwas.
It's as seamless now.
You're there.
It's as smooth now.
So instead of me asking you toget in I'm sorry, excuse me.
(10:39):
I'm asking you to get in frontof this thing.
I asked you to get in.
This thing.
I'm asking you to get in.
This thing.
You are a man.
I'm sorry.
I'm sorry.
I'm asking you to get in and sitin front of this thing.
I need to know exactly what'sgoing on in here.
very much.
(11:00):
Bye bye.
Silence.
Right.
Okay.
Okay.
Alia Khan (11:20):
if I live
Teresa (11:21):
very much.
We'll see you tomorrow.
Alia Khan (11:32):
they can actually protect when they file for
chapter seven.
Teresa (11:37):
There's a stigma that filing bankruptcy is bad for
your credit and that once youfiled, you never have the
opportunity to get new credit toapply for.
A car loan, a home loan.
You touched a little bit onthat, but do you find that when
new clients are coming to you,that's a big concern for them?
Alia Khan (11:57):
Yes, that is the first thing they ask my office.
Will I ever have credit extendedto me?
Will I be able to finance a car?
Will I ever be able to buy ahome?
during the life of thebankruptcy, so let's just say
chapter seven, it's a threemonth long process.
(12:17):
All of your credit cards thatyou were putting obviously
things on of that becomes nulland void and all of that debt
gets wiped out your personalloans, your credit cards, things
like that.
your
Teresa (12:30):
Right.
Bye bye.
(12:56):
Okay, Okay,
Alia Khan (13:15):
up to about 650.
you purchase
Teresa (13:18):
Okay.
Okay.
Okay.
Okay.
Okay.
Alia Khan (13:33):
of options for people who have filed bankruptcy they
can have credit extended tothem.
But you are absolutely right,Teresa.
That is the first question theyask, and they, they are very
afraid.
Teresa (13:50):
Yeah.
Yeah.
Alia Khan (13:54):
going to be tanked forever and they'll never be
able to do all of these thingsthat people want to do, like buy
a home and buy a car.
But it's important they actuallyapply for credit cards again.
I know it seemscounterintuitive, but in order
to build your credit score backup, you have to charge on a
credit card.
And.
Teresa (14:14):
exactly.
Yeah.
Alia Khan (14:16):
up.
Teresa (14:18):
That's encouraging when somebody goes to a debt
consolidation firm.
Doesn't that have some kind ofimpact on their credit
Alia Khan (14:29):
when you're part of a debt consolidation program or a
debt relief program, your creditscore is not rehabilitating in a
positive way at all.
It's still showing delinquentlate payments, nonpayment, many
(14:49):
clients think, erroneously thatthe debt consolidation company
is paying all of their creditorson a regular basis and they are
not
Teresa (15:02):
Sociology.
Oh, Get it together.
Oh, Get it together.
Do it.
Do it Do it Yeah.
Yeah.
Okay.
Alia Khan (15:22):
When they get sued or when there's delinquent
payments, Your credit is takinga hit throughout that entire
time until everything is
Teresa (15:33):
Wait.
Oh my gosh.
I'm so sorry.
Hello.
Oh my gosh.
yeah, I mean, I'm not going to,uh, can you hear me?
Alia Khan (16:20):
that way.
Teresa (16:21):
Have them do their homework and research and really
vet out what's the best optionfor them.
Silence.
Silence.
Silence.
Silence.
Silence.
(16:43):
Silence.
Silence.
Silence.
Alia Khan (16:52):
your credit score and your credit report is still
reflecting the debt is sittingthere for a bankruptcy.
As soon as we file yourbankruptcy, it's going to show
zero balance on all of yourcredit cards and personal loans.
then three months down the line.
Everything is going to showdischarged and your case will be
(17:14):
closed.
So you have nowhere to go but upa chapter seven bankruptcy.
Teresa (17:21):
Is it harder for someone to reestablish their credit
through debt consolidation thanfiling for, chapter seven?
Easy for me to do that.
Then I will tell you a littlebit more about myself, and uh,
what kind of people I am and seemy sense of humor and how it all
(17:42):
gets rolled together.
Alia Khan (17:43):
many times clients have come to me and said, I'm
being sued.
When you're being sued byCapital One, Capital One, for
example.
That's going to reflect on yourcredit report and it's tanking
your credit score.
Even though you thought you weremaking payments toward your
creditors chapter sevenbankruptcy, your score tanks
(18:06):
temporarily.
Then it goes up, then it tanksagain.
And then once your case isclosed in a couple of months,
You have to take some initiativeto start repairing your credit.
The only way to do that is byapplying for credit cards or an
installment loan.
Teresa (18:24):
Debt consolidation sounds scary.
You've got this risk, anddependency on this firm that
could be misrepresenting yourcase to these creditors or
banks.
And next thing you know, you geta call saying, hi, this is
Capital One.
We're suing you because you oweus XYZ.
(18:45):
It sounds much riskier
Alia Khan (18:47):
exactly.
You hit the nail on the head.
It's, there are so many and theyare in competition with
bankruptcy attorneys and we arein competition them.
We don't refer to each other, ifyou have a small amount of debt,
let's just say you have 5, 000worth of debt, that is something
where a debt relief or a debtsettlement company could help
(19:09):
you
Teresa (19:09):
And now, we're going to do a little bit of an analysis
so we're going to look at how soI'm a student at the University
of North Carolina, and I've beenhere for a few years, and I've
never really lived in a dorm,and now I'm going to look at the
units that we use for theseprograms.
Alia Khan (19:29):
without payment.
It's unethical.
Consolidation doesn't ask youfor money up front, they hide it
within their fees.
If you look at the contract,you've paid the debt
consolidation company doublethan what you would have paid a
bankruptcy attorney and abankruptcy attorney is wiping
out your debt.
The debt consolidation companynot only is charging you their
(19:51):
own personal fees, but they'renot wiping out your debt at all.
You're paying it back.
Teresa (19:55):
Let's say.
I want to file for chapter sevenbankruptcy and I'm in a
situation where I don't have themoney to pay you.
What are my options
Alia Khan (20:08):
My office tells them stop paying on everything,
Teresa (20:11):
Okay.
Okay.
Okay.
Okay.
(20:32):
Okay.
Alia Khan (20:37):
or family, or number four, they have a friend or
family member pay on thatperson's credit card.
I take credit cards from Grandmaor Uncle Joe,
Teresa (20:48):
Right.
Okay.
Okay.
Alia Khan (21:00):
about
Teresa (21:00):
Hi,
Alia Khan (21:22):
anywhere between 2, 500 to 4, 000.
Depending on
Teresa (21:27):
everyone.
Bye bye.
Um,
Alia Khan (21:54):
they could never pay that off in Yes.
I said, yeah.
I guess so.
Yeah.
Yeah.
worth of debt, and you get yourlife back.
(22:15):
There's no amount you can put onbeing able to sleep at night.
they feel so much relief on theday we file it's.
Teresa (22:26):
I bet they do.
The number one reason people arestressed is due to financial
Alia Khan (22:35):
Mm
Teresa (22:35):
struggles, hardships
Alia Khan (22:37):
Creditors don't only call debtor or the person who
used the credit card.
They call family members andfriends.
They call the person's job.
if they sue you and you don'tanswer the lawsuit because you
blow it off.
They will send judgment to youremployer and your employer is
(23:01):
mandated to garnish your wageswithin 10 days.
It's shocking.
And so that's an emergencyfiling at that point
Teresa (23:10):
it.
Alia Khan (23:15):
you probably didn't even owe that actual dollar
amount originally.
That is all of the fees.
Penalties costs associated withthe lawsuit that is tacked on
and they will garnish your wagesuntil it's paid off and many try
to get an exemption and say,Hey, I can't
Teresa (23:33):
Thank you.
Alia Khan (23:33):
this.
But guess what?
No judge
Teresa (23:36):
Silence.
Alia Khan (23:36):
going to actually grant you an exemption.
You have a job.
Therefore, can pay off the debt.
You're not insolvent in a wagegarnishment situation.
The good thing is.
If you get a wage garnishmentorder or you get a lawsuit,
don't feel hopeless, you canfile for bankruptcy and it goes
away permanently.
Teresa (23:56):
Bankruptcy doesn't seem as negative as many of us think
it might be you can still,reestablish your credit, have
the ability to buy a home buy acar down the road.
Alia Khan (24:09):
Right, and whatever that looks like for people.
Some people, they don't havecollege bound children or some
people have a pension.
I do think most people want anemergency savings fund.
If there's a car repair thatcomes your way, if there's an
emergency medical bill.
You need a little buffer in yoursavings account to pay that.
(24:34):
It allows
Teresa (24:35):
Yeah.
Yeah.
Alia Khan (24:39):
you to truly build.
Well, if you are strategic aboutit, know, everyone's situation
is different, and they may stillbe living paycheck to paycheck,
at least they're paying for theimportant things like rent, car
payment, food, utilities, gas,and their money isn't being
thrown at all of this junk debt,is credit cards, paydays,
(25:03):
personal loans.
Teresa (25:04):
Right, it may be impossible for them to ever pay
that off.
Alia Khan (25:09):
It's mostly impossible.
I'm honest with clients and Isay, you make 000 a year.
How are you going to pay 50, 000off, in your lifetime?
They never thought about it thatway.
don't think that they're lookingat their salary and looking at
the amount of debt they have.
(25:30):
They're so.
frustrated and ashamed andstressed and all of the feelings
that people have when you havefinancial hardship it's your
chance to say, Hey, I need towipe out this debt and I need to
walk in to the next year.
Being able to start thinkingabout budgeting better.
(25:54):
To, they're forced to live ontheir paycheck for a period of
time.
So that forces you to budget.
Teresa (26:01):
Yeah, I look at my own personal situation where my
mother had no idea how to managemoney.
She was a housewife living in avery social world, playing
tennis, playing golf.
And the last thing on her mindwas let's put a budget together.
And live off of it.
And we ended up, years later,after she blew through our
(26:24):
savings, sadly we had to go onfood stamps I remember my
brother and I being at the storewith her hiding in the
background because we didn'twant.
Any of our friends to see ourmom paying for groceries with
food stamps.
And we lived in a country club.
Like that was unheard of peopledidn't do that back then.
(26:44):
As parents today, it is our jobto help educate our kids on
managing their money becausethere's so many people out there
who don't know how they werenever taught and schools don't
have courses.
Alia Khan (27:02):
Absolutely.
And that's what a lot of clientssay.
They say, my parents were indebt too, and I never got any
support or help from them.
And now you're asking me to.
Do a good job with managingcredit and colleges extend
credit to 18, 19 year olds whodon't really know how to manage
(27:26):
their money.
There's a million reasons whypeople get into debt and some
reasons are very sad and otherreasons are just basic budgeting
whatever the reason is.
The client is very scared andnervous that as their attorney
(27:47):
or the actual federal courttrustee is going to ask them,
well, why did you get into debt?
Let me tell you, nobody cares.
My job is to tell you.
Hey, you qualify for bankruptcy,or you don't qualify for
bankruptcy, and here's what youcan save.
And here's what you get to keepand here are all the protections
(28:10):
you have and here's the processand how long it's going to take.
Teresa (28:16):
As their attorney, when they're going through this
process, what is your roleversus what they actually have
to do?
Mm hmm.
Mm hmm.
Alia Khan (28:27):
There's a lot of heavy lifting that happens prior
to us filing the case andattending the court hearing
together on zoom.
So when they call our office,they get vetted.
They have to give us informationabout their income, household
size, assets.
(28:49):
Then we tell them, yes, youqualify for bankruptcy.
Now, these are all the documentsyou need.
There
Teresa (28:56):
hmm.
Uh,
Alia Khan (29:18):
There's a whole
Teresa (29:19):
I don't have any questions.
If you've got any questions for5010 or something, please do not
hesitate to reach out.
And I'm sure that these folkswill answer any questions that
you have.
And we will be happy to helpyou.
Thanks, everybody.
So now, I'm going to go aheadand turn it over and give them
the opportunity to take theirquestions.
(29:40):
That's my passion for two weeksago, I was excited to find out
your success story.
So, it's been a pleasure.
So are you sure you want to dothis?
Is it going to be hard?
It's going to be hard.
Tell us how you feel about it.
And what it looks like.
Yeah.
(30:01):
Okay?
Yeah.
Okay.
Yeah.
(30:24):
Okay.
Right.
Alia Khan (30:52):
And then that's it.
Teresa (30:53):
You talked about how relieved people feel after
they've filed.
Alia Khan (30:59):
Any client that ever talks to me after the fact is so
grateful and so happy.
The phrase I hear a lot is thisis a weight that got lifted off
my shoulders.
I feel so much better.
I feel like I'm in a betterspace with my children.
I feel like I'm in
Teresa (31:17):
Hello, everyone.
Alia Khan (31:30):
I also think they didn't know that this process
was going to be as seamless asit really is.
Teresa (31:36):
They go in frightened because of the unknown and
you've educated them, guidedthem, coached them
Alia Khan (31:46):
for sure.
I see a lot of comments onsocial media about bankruptcy
being this immoral decision andpeople need to pay their bills.
The client is crying and theyfeel ashamed they are coming to
the table as bankruptcy beingtheir last resort.
Bankruptcy should be your firstresort.
(32:07):
If things are gettingoverwhelming, don't wait to get
sued.
If things are gettingoverwhelming, don't wait until
there's a lien on your home.
You
Teresa (32:15):
Right.
Yeah.
Alia Khan (32:41):
Have a great team in place.
I have one paralegal that I'vehad for about 10 years.
We just hired another one.
Those are the only two womenyou're going to be talking to
besides me.
And they are extremely kind toour clients.
They make them feel better andis never judgment when you're
(33:05):
speaking to our office.
Teresa (33:07):
For those that might be considering bankruptcy, you get
to keep your car, your house,the things inside your home that
you bought on credit card andreestablish your credit.
It's a way for you to be able tostart over There's tools out
there for us for a reason, and Idon't think people should be
(33:27):
ashamed that they have toleverage them.
And bankruptcy is one of themfor financial hardship.
Alia Khan (33:33):
Absolutely.
That's what I tell clients.
And a lot of my followers aswell.
It is created federal relief foryou.
You're not breaking the law.
The United States created it.
For people who have overwhelmingdebt a way to
Teresa (33:51):
Yeah.
Alia Khan (33:51):
out of it and you get to protect your pension, your
retirement accounts, home, yourcar.
The point is you get to get ridof the debt that's bringing you
down allow yourself to keep thethings that are important to
you.
Teresa (34:07):
For listeners who might be feeling overwhelmed.
By their debt and in the stateof California.
How can they reach out to you?
Alia Khan (34:16):
They can go to my website.
It's a con law offices dot com,and send me an email or call my
office we can have them assessedfor whether they qualify for
chapter seven or not.
If you live outside ofCalifornia, we can refer you to
(34:37):
an attorney.
that we work with in yourparticular state as well.
if you just want to hear aboutdebt bankruptcy, you can follow
me on Tik TOK and watch some ofmy videos.
I am the bankruptcy queen and myfull name is Alia Khan.
You'll be able to find me fairlyquickly.
but thank you so much, Teresa.
(34:58):
This was great.
Teresa (35:00):
I'm so glad you were able to join today.
Thanks again.
She really is the bankruptcyqueen.
Ali has 30, 000 followers, ifnot more.
And that tells you there'speople out there, 30, 000 of
them.
Looking for information onbankruptcy you can find her on
(35:22):
Tik TOK or Instagram atbankruptcy queen.
That's all one word.
Don't hesitate to follow her.
We'll have all the details ofher email address and where you
can contact her office in thenotes of the podcast.
Here's a quick recap of what wecovered today.
(35:42):
If you have questions aboutbankruptcy, reach out to Alia
directly.
If you follow her on Tik TOK shehas a lot of content with
questions, answers, Live videos,everything that you would need
if bankruptcy is the path foryou, don't be ashamed.
(36:02):
Don't be embarrassed.
It's a tool out there for you totake advantage of so that you
can find financial freedom andalleviate that stress that's in
your life, preventing you fromsleeping and living.
Once you've made thattransition, You can then start
putting a budget together andthere's plenty of information
(36:26):
out there on YouTube, differentpodcasts that talk about
budgeting.
So no matter what financialsituation you find yourself in,
just know that there's reliefout there and you don't have to
carry that burden any longer.
Thanks for listening, everyone.
Until next time.
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