How Can a Lottery Jackpot End in Bankruptcy?

Phrases like “winning the lottery” or “hitting a jackpot” are often uttered in our everyday lives and have become a sort of “Deus Ex Machina” of the modern times. More and more people are struggling to make ends meet, and all it takes are six numbers to change your life forever. Indeed, winning the lottery is a dream for most hard-working Americans, a way to settle all your debts, resolve other financial issues and enjoy life the way you always wanted to.

But did you know that according to Certified Financial Planner Board of Standards, around 70% of those who win a lottery end up filing for bankruptcy? Yes, you read that right. Winning the lottery actually makes their life worse than it was before in financial terms! Additionally, among the one third of the remaining “lucky ones” most wind up divorced, estranged, depressed or developing an alcohol or drug addiction.

But how does an American dream like this one get so sickly twisted? How does a man who one day sits on top of a massive fortune end up looking for a bankruptcy attorney in San Diego the very next day? Well, there’s no easy answer to that, but there’s certainly a pattern to be analyzed in all of these lottery-related bankruptcy cases.

Their Generosity Suddenly Knows No Bounds

Suddenly becoming entitled to a massive fortune is impossible to hide in the era of social media. Sooner rather than later, a relative you barely know shows up at your doorstep asking for a small loan so his or her family can cover their debt, send their child to college or simply survive through the month. And you will be happy to oblige, happy to share your wealth with and help someone in the same situation you were in just before winning the lottery.

Suddenly, more and more relatives start showing up, and it feels incredibly unpleasant to say “no” after you’ve helped the others out. Once you started giving out small loans you cannot go back into hiding and anonymity. People are going to come knocking and believe they are entitled to your help.

They Become Addicted to the Green

Giving away money to desperate people who need it does not seem like that grim of a scenario compared to the other way lottery winners often waste their money. Coping with the sudden spotlight and more money than they know what to do with, many lottery winners end up spending their fortune on alcohol, drugs, gambling or other expensive vices. Addiction burns through your wealth like a hot knife through butter, and all of a sudden you are left addicted and bankrupt, a dangerous combination that often leads to a tragic outcome.

They Don’t Seek Professional Financial Help

What do you do when you suddenly become entitled to a huge wealth? Well, the logical thing to do is look for someone to help you allocate that wealth and possibly invest in something that will only make it grow. However, most lottery winners completely ignore asking for financial advice from a finance expert or hire someone untrustworthy to handle it for them. A financial advisor can help you learn how to save the money, what to invest it in and how to make the most out of it. This is why it’s best to contact a financial advisor before you let all your relatives know you won on Facebook or go to a bar to celebrate buying rounds to everyone around. Not skipping this step could save you and your family much trouble and suffering.

They Waste Too Much on Impulse Shopping

What’s the first thing you do the day after the news sink in? Buy everything you’ve ever wanted, naturally! New cars, new clothes, jewelry, vacation or a new house? Or all of the above? While this is a normal impulse, some winners blow all their fortune on things that don’t have a lasting value. Instead, lottery winners who seek smart investment options or start a trust fund make their wealth grow rather than immediately spending it on things they are going to have to renounce when they file for Chapter 7 bankruptcy.

They Do Not Research What They are Investing Their Money In

Even those who take the right turn and start investing in real estate or small businesses can end up bankrupt if they don’t know what they are doing. Investing requires an individual to be business savvy and have a certain attitude most common folk don’t have. Someone with zero experience in the niche they are looking to invest in doesn’t have what it takes to do a proper analysis of the market and put their money where it’s guaranteed to pay off. This is why it is important to either take the time to learn everything you need about a certain business niche or hire someone who can do it for you in order to avoid bankruptcy.

Why Seek Help from an experienced Bankruptcy Attorney in San Diego?

If you have been a victim of the lottery curse or are a simple man struggling to make ends meet, hiring an attorney specializing in Bankruptcy cases can benefit you more than you realize. Our bankruptcy experts can not only help your bankruptcy process as painless as possible, we can help make your life easier helping you face the creditors and by teaching you how to get your car back after filing for bankruptcy, how to properly file your taxes and everything else you will need to know to get your life back on track.

With almost two decades of joint expertise, The Bankruptcy Lawyers Chang & Diamond, APC serves the San Diego County and most of the Southern California region.  Contact our offices for a free initial consultation at (619) 312 – 4900 or reach out to us through our website form.


Attend the Meeting of Creditors with a Bankruptcy Attorney in San Diego

People looking for help from a trusted bankruptcy attorney in San Diego often come to our offices extremely anxious, fearing the ensuing process. Our clients often see the hearing as going to court, which only adds to the panic. To make matters worse, as nothing is done to debunk it, this myth is constantly perpetuated. The hearing conducted by a bankruptcy trustee is not the same as going to court, and therefore is nothing to be ashamed or terrified about.

The meeting of creditors or in legal language known as a “341 hearing” is meant to give the trustee a chance to ask you a couple of questions and verify under oath that every piece of information you’ve disclosed regarding the case is valid. This includes everything you’ve disclosed via petitions, schedules and various other documents.

Knowing how this meeting typically looks like and how to prepare for it will help you with your case, which is why our experts decided to cover the basics of this process.

Who Will Attend?

In most cases, the only people at the hearing will be the trustee, your bankruptcy attorney and you. A lot of clients have expressed their concerns that the creditors will attend the meeting and fear being intimidated by them. And while creditors have the right to attend such a meeting and ask questions, this is usually not the case. As you can imagine, the creditors have a tight schedule and the chances they will have the time to attend such a meeting are very slim. Simply put, time is money and they do not wish to waste any.

Even if the creditors do show up, an experienced bankruptcy attorney will make sure that they do not step over the line and will defend you against any inappropriate actions or questions on their side. Sometimes a United States Trustee representative could show up and ask you some questions, which you should answer in the same manner you would answer the appointed trustee’s questions.

What to Expect From the Meeting

For starters, the trustee will ask to see your Social Security card and your driver’s license. Then the trustee will swear you in. After that, they will ask a couple of questions to verify the information you’ve previously provided. Bear in mind that a trustee is not the prosecution and their purpose is not to undermine you.

With this in mind, asking you about something does not necessarily mean that something is wrong. For example, if they ask you to verify the salary amount you’ve listed that does not mean they are indicating that you are lying about your income. Rather than that, a trustee asks these questions simply to confirm the information given. And if you don’t understand the question or fear you might be misinterpreted, your bankruptcy lawyer will be there to help you.

Naturally, if some of the information had changed in the meantime, it is important to let your attorney know beforehand.

How to Prepare for the Meeting

After you file for Chapter 7 or Chapter 13 bankruptcy, the meeting of creditors will be scheduled in the next couple of weeks. And while this hearing is not a college exam, there are still some things you need to prepare in order to ensure that the meeting goes smoothly. First of all, you and your bankruptcy attorney should review the questions the trustee is likely to ask. An experienced bankruptcy lawyer already knows the most common questions the trustee asks, and can help you prepare your answers.

Furthermore, you should present your attorney with the updated versions of the required documents, so that your attorney is not caught off guard by the trustee in case something had changed in the meantime. Together with your lawyer, review the schedules, petitions, financial statements and any other documents. If you are filing for a Chapter 13 bankruptcy make sure you review your repayment plan too.

The Roles of a Bankruptcy Trustee

The bankruptcy process can seem complicated to anyone filing. Many people do not understand the process and with all the false information around, it can be hard to distinguish fact from fiction. This can discourage most people from filing for bankruptcy or seeking a professional bankruptcy lawyer in San Diego. In an attempt to shed light on the process, this article will discuss the role of a bankruptcy trustee.

Who is a Bankruptcy Trustee?

A bankruptcy trustee is a person appointed to every consumer bankruptcy case. They are tasked with various duties and are meant to be an intermediary between the debtors, the court and the creditors. The trustee is appointed by a regional US Trustee office. They are often bankruptcy lawyers or at least experienced in finance and business. This is important in order to ensure that they understand and can perform these duties. In return, the trustee is rewarded with a percentage of the filing fee if the case does not involve any assets. In case there are assets to collect, the trustee gets a percent of the liquidated assets.

The Bankruptcy Estate

To understand the roles of a trustee, you must understand the concept of bankruptcy estate. The bankruptcy estate is comprised of a debtor’s property and is considered a separate legal entity, not linked to the bankruptcy debtor. Naturally, because the estate is not a living being, a trustee is appointed to oversee and act on behalf of the estate, performing and overseeing various legal obligations.

The Duties of a Trustee

Their main duty is to administer the bankruptcy estate. The trustee determines which assets are valuable to the estate and collects property form the debtor or someone currently holding it. Afterwards they convert property into money by the means of selling it. They are held accountable for the estate property.

With Chapter 7 bankruptcy, the trustee gathers the property for sale. They need to collect as many assets and liquidate them to pay for the claims. They are also tasked with validating unreliable claims and distributing money collected from the person filing for bankruptcy. With Chapter 13 bankruptcy their role changes a bit. Instead of gathering and liquidating assets, they are tasked with creating and revising the proposed repayment plan for the debtor. The trustee is charged with distributing money from the repayment plan and making sure the plan is dependable.

Looking for an Affordable and Trustworthy Bankruptcy Lawyer in San Diego?

The BK Lawyer group aims to encourage debtors to file for bankruptcy by helping them see the clear picture of what constitutes filing for bankruptcy. We guide our clients through the process and keep every step transparent. With over 20 years of experience, our lawyer group provides all inclusive client services for Chapters 7 and 13, as well as bankruptcy recovery, asset protection, exemption and repossession. Contact us for a free initial consultation.

The information you obtain in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.