Saving With Steve with Steve Sexton Holiday Budgets, Debt Consolidation, and Bankruptcy Basics with Ashley Morgan Steve Sexton talks with bankruptcy and tax-resolution attorney Ashley Morgan about building a realistic holiday budget, avoiding debt-consolidation and settlement traps, and knowing when Chapter 7 or Chapter 13 bankruptcy makes sense, before closing solo with a warning about rising global bond yields and inflation. Welcoming Ashley Morgan For Year-End Planning Steve Sexton opens the show by thanking his growing audience, noting the program now reaches well over a million listeners in the United States and more than 300,000 overseas, before turning to the topic of year-end planning ahead of the holidays. He introduces Ashley Morgan, founder of Ashley Morgan Law, a consumer bankruptcy and tax resolution firm serving the Washington, D.C. metro area, whose commentary on consumer debt has appeared in Fortune, Newsweek and MarketWatch. Morgan explains that she fell into bankruptcy work almost by accident, taking a job with a boss who ran a consumer bankruptcy and federal criminal defense practice fresh out of law school. She loved the work enough to keep doing it after he became a judge, building her own practice over nearly eight years. She tells Sexton the field rewards her because, unlike drafting a will, she gets to watch clients actually experience relief from crushing debt through payment plans or settlements. Building A Realistic Holiday Budget Sexton asks Morgan how listeners should build a holiday budget as September gives way to Halloween, Thanksgiving and Christmas. Morgan tells him budgeting scares people because they assume it means restriction, but the real goal is intention: deciding what matters, such as flying home to family, and working backward to find the money, whether by cutting other expenses or picking up extra work. She stresses that most people underestimate their own everyday spending on rent, food and utilities, so building a holiday budget requires first knowing the baseline. Sexton shares a listener's story about discovering a daily six-dollar Coffee Bean habit, taken twice a day, added up to 320 dollars a month, more than her car payment. Morgan says there is nothing wrong with prioritizing coffee, so long as the spender is intentional and adjusts elsewhere, whether by cooking at home, carpooling to save on gas, or reviewing recurring subscriptions and insurance policies that quietly drain money every month. Sinking Funds And The Year-End Financial Checkup Morgan urges listeners to start budgeting for holiday spending as early as January, setting aside roughly 160 dollars a month toward a 2,000 dollar Christmas fund rather than relying on credit cards, and to buy gifts early while watching for sales and coupon codes instead of waiting for inflated December discounts. She recommends sinking funds for periodic expenses and suggests people paid biweekly bank an extra paycheck during the two months a year that produce three paychecks. Sexton recalls Jenny from Ohio, whose family saved 350 dollars a month simply by swapping which spouse drove the gas-guzzling truck. Turning to the broader year-end checkup, Morgan tells listeners now is the time to maximize 401k and IRA contributions, use remaining health savings account funds, and catch up on estimated tax payments before April. On debt payoff, she describes an internal six-month rule: if balances have not moved after six months of the snowball or avalanche method, the plan needs rethinking. Debt Consolidation, HELOCs And Settlement Risk Sexton asks Morgan to explain debt consolidation heading into the new year's debt hangover. Morgan distinguishes true consolidation, where credit card balances are rolled into one loan such as a home equity line of credit, or HELOC, from debt settlement programs, where a company collects payments into an escrow-like reserve and later negotiates with creditors. She warns that consolidation only works with discipline, since reopened credit cards can leave someone with both a new loan and fresh balances. On settlement, she cautions that creditors are never obligated to accept an offer, and a rejected settlement can lead to a lawsuit, wage garnishment, bank garnishment or a real estate lien lasting five to sixty years depending on the state. Sexton walks through an example of a 20,000 dollar balance settled for 10,000, which Morgan says triggers a 1099-C for forgiven debt that becomes taxable income unless the borrower can prove insolvency, a detail she says settlement companies rarely emphasize. Chapter 7 And Chapter 13 Bankruptcy Explained With the holidays over and cards maxed out, Sexton asks Morgan when bankruptcy or restructuring makes sense. Morgan explains Chapter 7 as a liquidation bankruptcy that still lets roughly 95 percent of filers keep their assets, since exemptions like Virginia's roughly 50,000-dollar homestead protect equity, though limits vary sharply by state. Chapter 13, by contrast, restructures debt into a three-to-five-year payment plan and can bring a missed mortgage current without the skipped payments of a forbearance. She distinguishes it from a modification or partial claim, noting unsecured debts like credit cards can be paid anywhere from zero to 100 percent depending on assets and disposable income, while student loans typically survive. On cost, Morgan says Chapter 13 fees are often rolled into the plan, while Chapter 7 typically runs 2,000 to 6,000 dollars and must be paid before filing. She urges anyone struggling to seek advice six months to a year before a crisis rather than waiting for a foreclosure notice. A Closing Warning On Bonds And Inflation Sexton thanks Morgan, who directs listeners to her firm's website and bankruptcy resource hub, before closing the show alone with his weekly economic outlook. He points to global bond yields hitting their highest levels since mid-2008 and Japan's 10-year Treasury yield touching 3 percent for the first time in a century, arguing Federal Reserve chair Waller will struggle to raise rates in September while Treasury official Bessent pursues long-bond buybacks starting September 10th. Sexton says the United States cannot afford a recession and may instead accept structurally higher inflation, a scenario he calls a Hail Mary that erodes purchasing power for retirees in the distribution phase of life. He advises keeping one to two years of living expenses in liquid accounts, favoring shorter-term bonds over long-term bond funds, and adjusting withdrawal rates based on portfolio performance rather than a fixed percentage, so market swings do not force a permanent cut to lifestyle or legacy goals.
