I May Inherit Money Soon After My Bankruptcy Discharge, Now What?

The bankruptcy law says that if a debtor inherits money from someone who dies within 180 days of the date the debtor filed bankruptcy, that money becomes part of the bankruptcy estate even if you received a Chapter 7 bankruptcy discharge. What that means is that if you filed bankruptcy September 30, 2009 and a relative/friend died December 30, 2009, and you inherited money from them, you would need to report that money to the bankruptcy court and it would become part of the bankruptcy estate. However, it is not illegal to make plans so that your inheritance does not fall under the jurisdiction of the bankruptcy courts. Here are your options:


•Your friend/relative can setup a spendthrift trust for your inheritance. The bankruptcy court cannot seize a spendthrift trust if it is properly created. You will need an attorney to properly create the spendthrift trust and avoid trouble with the bankruptcy court.

•Your friend/relative can rewrite their will to remove you from it so that another person inherits the money. That person, if they choose can then gift the inheritance to you 180 days after you filed bankruptcy or they may be able to give you the gift before the 180 days has lapsed because the bankruptcy court cannot seize gifts after your bankruptcy has been finalized.

•You can simply not claim the inheritance. You are not by law required to claim an inheritance.

Remember, there is nothing wrong with planning to maximize the benefits of bankruptcy. You can legally do so by planning the timing of an inheritance or using tools to avoid the seizure of assets in bankruptcy. However, it is illegal to hide an inheritance, by not telling the bankruptcy court about it or using illegal means to avoid including it in the bankruptcy estate. If you plan to receive an inheritance during or after your bankruptcy please discuss with your bankruptcy attorney, how you can protect this asset.

Source: Reed's Bankruptcy Blog

Surviving Bankruptcy

Getting through painful process requires composure, organization and advice.
By Thomas Gnau and Vince McKelvey

When ‍bankruptcy appears to be your least bad option in a sea of bad options, what should you do? In plain English: Don’t panic. Get your records together. Talk to your attorney. How do you know you’re headed for ‍bankruptcy?Unfortunately, that may be the easy part. “Most typically, when you’re headed in that direction, you’re having trouble paying your bills,” said Ronald Pretekin, attorney with Dayton law firm Coolidge Wall. You also may be tempted to divert federal and state withholding taxes to pay creditors, Pretekin said. If so, resist the temptation. Such diversions simply create bigger problems, he said. “Responsible officers can be held personally liable for dealing with those issues.”

One of the first questions Pretekin asks clients: Where do you stand on your taxes?

Matters get murkier — for nonspecialists, anyway — when it comes to the array of ‍bankruptcy options.

Miami Twp. attorney Wayne Novick chairs the Dayton Bar Association ‍Bankruptcy Committee. Business structure determines the kind of ‍bank‍‍ruptcy protection available, he said.

In general, businesses can shut their doors in Chapter 7 or attempt to continue operating and reorganize through Chapter 11. The law does not allow corporations to file Chapter 13.

An individual “doing business as” can file Chapter 7 (to shut the doors), Chapter 11 (to reorganize) or Chapter 13 — sometimes known as an option for “smaller guys,” Novick said. With Chapter 13, if a nonincorporated business can produce a suitable plan, a court can allow it to move forward with perhaps less oversight or influence from creditors.

Chapter 11 means holding off previous creditors while trying to attract or work with new ones, Novick said. That can be challenging, to say the least.

Indeed, often the path to ‍bank‍‍ruptcy becomes clear because creditors are clamoring for payment — or suing.

“In this environment, I think a lot of creditors will work with you for at least some period of time,” Pretekin said. “But there’s always a point where everybody runs out of patience.”

“One of the keys is, who is going to give them credit?” Novick said. “You have to work out something with the future suppliers (creditors), and that’s where the small business Chapter 11s run into difficulty.”

Novick — talking the language of attorneys who work with entrepreneurs — says it comes down to the “input of new capital.” How will payroll be met or supplies purchased?

Attorneys need to evaluate whether a business can go forward. Good business records help that decision. Even getting something as fundamental as a monthly “P&L” — a profit and loss statement — can be difficult for some small businesses.

Other questions that demand answers: How strong is the relationship with suppliers? Can they count on suppliers to continue that relationship? Can the business operate on cash? Are accounts receivable collectable? What’s the debt total?

Fear of confronting the issue won’t help, Novick says. Talk to your accountant and attorney sooner rather than later.

“There’s no harm in that,” Novick said. “But people fear that.”

Said Pretekin, “One of the earliest things to do is talk to your lawyer, your accountant.”

Pretekin and Springboro attorney Ira Thomsen emphasize the importance of considering not just the business’ position, but that of the individual or individuals who have guaranteed loans. The question becomes: Does seeking ‍bankruptcyprotection make sense in this case?

“Do I really need to file a ‍bankrupt‍‍cy for this business if I’m going out of business?” Thomsen said.

If a business isn’t being sued by creditors, and if assets are not sufficient to pay off secured lenders, then attorneys may advise clients to close their doors and concentrate on protecting personal assets.

Assets usually are on the line when small businesses have one or two owners. Often those owners have personally guaranteed their business’ obligations, Thomsen said.

In that case, individual owners may consider filing personal ‍bankruptcies, usually a Chapter 7 or 13, but not filing for their business.

Said Thomsen, “I have not run into a situation, a small business situation, where the debt is not guaranteed.”

If there are reasons to file for both personal and business situations, often different attorneys will be needed for each side, Thomsen said.

Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com .

Source: GratefulLawyer.com

How to Be Your Own Life Coach and Save Some Cash

Life coaches aren't just for celebrities nowadays: lots of regular Joes like you and me have worked with, or are thinking about hiring, a coach. It's true that a good, experienced life coach can help you turn your life around – whether you want to improve your health, switch career or even overcome phobias.


However, many of us (me included!) can't afford to pay for life coaching. Should we resign ourselves to sitting on the sidelines, watching friends and colleagues forge on ahead, with their life coaches cheering them on? We could throw our hands up in the air and say, "Well, I'd be that successful too, if I could afford to pay someone to help me."

We don't need to miss out. There are ways to get many of the benefits of life coaching ... even when you're broke.

Set Aside an Hour a Week

One of the reasons that people benefit from life coaching is because they've blocked out (and paid for!) time which will be used in serious thought about their goals, dreams, ambitions and problem areas. Typically, life coaches will work with a client for an hour each week.

There's absolutely nothing stopping you from blocking out an hour in your diary, every Sunday afternoon (or whatever time you pick). I know you're probably thinking "I'm too busy" or "But what if something comes up?" If you make a genuine commitment to yourself that you'll keep that hour-long appointment, the time will be there!

There are 168 hours in a week. Surely you can invest just one of those in your own personal development!

Try Some Self-Coaching Techniques

Although you're (probably!) not a trained coach, there are some techniques you can use to help yourself get clarity and perspective about your life, and find solutions to your problems. These are a few to try:

Timed Writing

Set a timer for five minutes. Write down a problem or issue in your life (eg. relationships). Now write, without stopping or editing, about things you could do to overcome that problem. Put down everything that comes into your head, even if it seems silly.

Question and Answer

This is another writing exercise. Ask yourself a question, then write the answer. Keep asking questions if you think something isn't fully explained. Imagine the questioner as a very close friend, or as the person you'd like to become.

If you're not sure what to ask yourself, try these questions:

What would make your life better right now?

Where are you going forwards in your life at the moment?

Where do you feel stuck?

Meditation

Lots of people have preconceptions about meditation. It doesn't have to be new-agey or spiritualist – meditation is just a way of quietening your mind. It's one of the best ways to reduce stress, and meditating at the start of your hour-long session can help you to get into a calm, focused frame of mind.

If you're anything like me, you'll find that Meditation Techniques for the Busy and Impatient is a must read!

Work Through a Blog Post, Book or Program

Many life coaches, motivational speakers and other big shots in the personal development field have written books or produced programs that can literally turn your life around. There's a but coming, though ... you have to actually take some action.

How often have you bought or borrowed books, read them, enjoyed them ... but failed to change anything about your life? I love reading, and I'm too prone to rushing through books when I need to take the time to actually implement their advice.

Pick up one of the books you've read, or get hold of a good one (How to be Rich and Happy by life coach Tim Brownson and best-selling author John P Strelecky is the next on my list to work through). Spend your hour a week – or more time if you can – working through slowly, chapter by chapter. Many books will offer exercises for you to complete at the end of each chapter: try not to skip or ignore these!

Be Kind to Yourself

Finally, one of the best ways to be your own life coach is to learn to be kind to yourself. Many of us have a very critical little voice in our heads that berates us for making mistakes, getting things wrong and sometimes falling short of the mark ... in short, being human!

When you're tempted to judge yourself harshly, stop and think how a life coach would respond. Perhaps they'd remind you of the progress you have made, and perhaps they'd help you to look at the reasons why things went wrong.

Source: Dumb Little Man

What to do as the economic recovery begins

By Andrew Housser

Last week, news reports began providing data on the third quarter of economic activity, supporting earlier predictions that the United States is gradually recovering from the recession that has gripped the nation for nearly two years.

For individuals, the recovery signals a return to higher levels of employment and more economic security. If you have been walking on pins and needles in the past months, now is a good time to begin returning your personal finances to economic health. Here are some tips on being a smart, money-savvy consumer as the recovery begins.

1. Aim to save 10 percent

Try to save 10 percent of gross income -- whether it's from a regular paycheck, commission or consulting check, or babysitting money. If you cannot yet do 10 percent, choose a level to which you can commit on an ongoing basis, and work to increase it to 10 percent.

2. Prioritize your spending

As you recover from the downturn, take a fresh look at how you spend your money. Here are some smart ways to prioritize what you pay and when you pay it.

•Pay your mortgage first. If you want to stay in your home, don't risk falling behind on your mortgage, and prioritize paying your mortgage over unsecured debts. Do not borrow excessively with home equity lines.

•Pay down credit card debt next -- and stop charging. For those who are weighed down with debt - especially credit card debt -- and paying interest rates of 18 percent, 30 percent or even more, work on paying that debt off. Using your money to pay off high interest credit card debt is one of the best investments anyone can make.

•Build an emergency fund. Ideally, this should amount to at least six months worth of expenses. But any amount helps. How much really is enough? "Enough" depends on a person's individual situation. Think about the level of expense that causes you to rush to a credit card. Is it a car repair bill for $250? A medical bill for $500? Have at least that amount available, and build toward six to nine months' living expenses.

•Then fund your goals according to your budget (see the next tip).

3. Budget

Budgeting is the No. 1, sure-fire way to save money. The key is to set goals. Whether your goal is to save on weekly grocery bills, have time for a hike once a month, save for kids' college or for retirement, or take a vacation to Europe, write down the goals and build your budget with the goals in mind. For some, it may mean modifying that European vacation to, say, Boston's North End for a taste of Italy -- but whatever happens, you'll find that using a budget will help you to spend smartly.

4. Pay every bill in full and on time

You will avoid increasingly high late charges, penalties and fees. Many people spend more money paying interest (and late fees) than on many other expenses.

5. Spend with cash

Start handing over old-fashioned dollar bills for your routine expenditures. People who do not use debit or credit cards are less likely to throw that extra item into the shopping cart or make an extra purchase. If you must, take credit cards out of your wallet. Some people even freeze their credit cards in a bowl of water in the freezer. The time it takes to thaw it out can serve as a deterrent, or at least provide time to really decide if you need to use it. Bottom line: If you can't pay for something now, don't buy it.

6. Shop smart at a warehouse club

Invest in a warehouse club membership to save by buying in bulk. Everyone, from single men and women to couples and small families, can benefit from the savings clubs offer if they plan and spend carefully. Buy only what you can afford, stick with items you use frequently, and watch for good values on non-food items such as gas, long-distance phone cards and clothing. Team up with friends, neighbors or family members to split large purchases.

7. Wise up on insurance

Take the time to get a variety of quotes on the insurance coverage you carry, from health insurance to home and auto policies. Be sure you are receiving the best value for your premium dollar, and if not, switch insurers.

8. Pare down utility bills

Everyone has heard by now the advice on turning the thermostat down in winter (up in summer), installing a programmable thermostat, turning the hot water temp down, etc. To really save, look carefully at your utility bills to find out the cost per gallon of water, per kilowatt of electricity or per therm of natural gas. See where you spend the most. Then focus your energies -- including improvements such as adding insulation or repairing dripping faucets -- where you will save the most money.

If the recovery brings you and/or your family increased income or steadier income, be especially careful to budget that money consciously. By planning ahead for how you will spend -- and save - -you will gain control over your own life and the peace of mind that that power brings.

Source: WALB News

Will You Qualify For Chapter 7 Bankruptcy After Halloween?

If you are a consumer thinking about filing bankruptcy, you will want to figure out whether to file bankruptcy before or after November 1 when changes to the income eligibility guidelines take effect. For some people, the means test changes will help and for others the changes will hurt.

In Kansas, for example, median family income for families of one to three goes up while median family income for four or more person families decreases. In Florida, median family income went down for all family sizes.

The new income figures have been released so you have 21 days until October 31, 2009, to file bankruptcy, if you will be hurt by the new means test guidelines. See your consumer bankruptcy attorney to learn your options.

Congress created an income test for determining eligibility for consumer bankruptcy in the law reform of 2005. The thought was that you should only get as much bankruptcy relief as you need. Creditors complained that people were discharging all their debt in chapter 7 bankruptcy who had the ability to make partial payment in chapter 13 bankruptcy.

A math test was created to determine who can file chapter 7, who must file chapter 13, and how much debt has to be repaid in chapter 13. This test is called the means test. It starts with the median family income for your family size in your state according to data compiled by the U.S. Census Bureau and adjusted by the U.S. Trustee Program. The median income figures are changing for bankruptcy cases filed on or after November 1, 2009.

If your income is less than the family median income for your state, you pass the means test and are eligible for filing either chapter 7 or chapter 13 bankruptcy.

If your income is higher than the family median income for your state, then you keep going by filling out about six pages of information about your expenses and various deductions you are allowed to take to determine if you have disposable income to pay your unsecured creditors (the ones without collateral such as credit cards and medical bills). You could pass the means test at the end of the process if you have no disposable income and qualify for either chapter 7 or chapter 13 bankruptcy. You could even qualify for nominal repayment to general unsecured debts in chapter 13 bankruptcy. Or, if you have disposable income, you may be eligible for a chapter 13 payment plan bankruptcy.

The means test is very complicated. The devil is in the details, as they say, and your consumer bankruptcy attorney can help you determine your options.

Source: Bankruptcy Law Network

How to Keep Your Costs Down and Get Good Bankruptcy Advice Quickly

Personal bankruptcy is made for "what if" scenarios. What if I file individually instead of jointly with my wife? What if I quit my job while I am in the middle of my Chapter 13? What if I need a replacement vehicle after I file?
I don't always have the answers but I can usually think through one or two likely scenarios. I can be more effective helping you if you give me the information I need. Specifically that means the following:

•take the time to complete my intake questionnaire in its entirety. Don't leave out information that you believe is not relevant. My intake questionnaire is keyed to my bankruptcy program and I have been developing and updating it for over 15 years. Everything on my questionnaire is there for a reason – and I can serve you better if I have everything that is requested there

•get me copies of your credit reports. AnnualCreditReport.com offers a free service to get current copies of your credit reports. Current credit reports help us avoid leaving out creditors from our analysis and they can also provide other helpful information such as prior addresses and other names in which you have been extended credit

•get me copies of all payment advices for the past 7 months. The Bankruptcy law now requires all debtors to engage in a median income test as well as a means test analysis. The starting point of this analysis is evidence of income you and other members of your household have received. Payment advices should be provided for salaries, investment income, one-time checks, some disability payments, dividends, etc. If you are not sure, ask.

Sometimes I hear from clients who want to submit their information on a spreadsheet or Quicken file. Feel free to send those files along, but do not send them in lieu of my questionnaire and the other requested information.

Source: BkBlog

How to Rebuild Credit, Post-Bankruptcy

Dear Alpha Consumer,
My wife and I just emerged from bankruptcy. Before that, we both had excellent credit scores and access to good credit cards with major lenders. Unfortunately, I've been laid off three times since 9/11 because of company downsizing, and we had to charge our health insurance COBRA payments and food and other essentials to our credit cards. We only started making late payments on the advice of our lawyer, who said we had to be late prior to filing for bankruptcy.

Now, I am employed again and we are trying to rebuild our credit. We have one joint account in good standing but we would like to get a credit card or two to rebuild our credit. Should my wife and I each get a credit card under own names, or should we take out a joint credit card? Also, is it better to get an unsecured card with a higher APR or a secured credit card with a lower APR?

Lastly, if we pay off the balance each month and make on-time payments, do you know how long it will take before we rebuild our credit score and are able to get low-interest, unsecured cards from national lenders again?

First of all, congratulations on getting back on your feet after filing for bankruptcy. The good news is that you could have decent credit again within a year. The bad news is that even with improved credit, you probably won't be able to find the low-interest rate credit cards that you remember from your pre-bankruptcy days.

The credit card world has changed drastically in the last two years. Credit card offers used to be plentiful; almost anyone with a mailing address could receive an unsecured credit card at a competitive interest rate. Now, card companies have tightened their standards in the wake of rising default rates and have raised interest rates even on reliable customers. According to www.IndexCreditCards.com, the average rate is now 15.39 percent, the highest in two years.

To maximize your chances of getting the best deal possible, your wife and you should probably apply for individual credit cards. When it comes to credit, separate accounts are usually better, unless one person's credit is so poor (or nonexistent) that he needs a co-sponsor in order to take out a card, as is often the case for college students. But since you are both adults with separate credit reports, you have little to gain from taking out a card jointly, and a potential downside if one person's credit drags down the other person's. (It sounds like you have a strong marriage, but many couples also want to keep their credit accounts separate in case they divorce, in which case jointly held credit cards can become contentious issues.)

As for whether to go for an unsecured card with a higher interest rate or a secured card with a lower one, that depends entirely on what you are using it for. If you think you might carry a balance, then you should always go for the lowest-interest rate possible. But secured cards require upfront cash deposits, which you may or may not be able to provide. In many ways, secured credit cards aren't credit cards at all, but rather debit cards that give you to the extra advantage of rebuilding your credit score.

While your credit score will improve after only a year of making on-time, regular payments, it will take longer -- seven to ten years -- for your credit report to fully recover from the stain of bankruptcy. By then, low-interest rate credit cards might have made a comeback.

Source: US News

2008-2009 Recession Being Good for You!

Yup, your heard me right, the 2008-2009 recession is actually pretty good for all of us! Instead of looking at the recession as a walk in the desert, I prefer to see it as a cold winter of great warnings and doors of opportunities. It is true that recession hit very hard as a cold winter on those who didn’t protect themselves enough. When I talk about cold winter, I am talking about minus 40 degrees with 10 feet of snow… Many people have suffered from it but there is still a lot to learn from the current recession:

Investment opportunities
“Buy when there is blood on the street”. This is probably my favourite quote from Wall Street. It is a bit violent, but it clearly determines the only moment where you should use market timing: when everybody else is avoiding it! Investing during a recession will make your investment portfolio jump like you could not have imagined. It’s a classic but nobody’s doing it L. As the cold winter strikes and everybody goes inside at the first sigi of snowflakes, you can be brave enough to stay outside. You will get your stuff ready for next spring while everybody is looking at you through the window with their hot chocolate thinking “what a crazy, poor man, he has to work all winter…”. Who’s going to be the crazy, poor man after the recession? Huh?

Frugal spending
Badass winters used to strike our country while our parents (or grandparents) didn’t have much to eat, talk about genuinely rough times. As is the case during a recession, it drives to you think about managing your resources and spending more responsibly. This is when you develop frugal habits (that you will soon forget once summer is back…). The 2009 recession will definitely encourage people to save money (Canadian and US savings rates are ridiculous… as close as a 1 year CD actually… near nothing!). Spend less and save more, you will be able to eat throughout winter!

Recession improves ecologic habits
During winter, we all try to use everything on hand instead of wasting it. It is exactly the same thing with a recession. The best example would be the famous Cash for Clunkers. Governments try to stimulate the economy while appearing green (it gets good press even though not the primary goal!). While you have less money in your pocket, recuperating your old stuff becomes the best idea you can have.

Appreciate things we have
I always laugh when I hear people talking about the weather in Quebec. They spend their whole summer complaining it is too hot and once winter arrives, they whine about the cold weather (want some cheese with that) … This is what happens during a recession, we miss the good old days where we had to work 60 hours a week. The human being is a weird beast; it has to lose something before appreciating it. So, if you are lucky enough to not be struck by the 2009 recession, please appreciate what you have and take care of it!

Improves creativity
As companies cut out the fat, the remaining employees have to do more with fewer resources. This is when creativity rises to its best: when there are no other solutions than finding a better way of doing things! This is how most companies will show increases in productivity and the profit margin as well in 2010 ;-0.

Good position for a promotion
As it is the case with creativity, if you stay with your company and you are not part of the “fat”, you have a pretty good opportunity to work hard and show you can manage the stress and pressure. There is a better than average chance you will be in the running for a promotion when things go better as most people around will react poorly during a recession. They will whine about people being laid off while they still have a job. They will complain that they have to work more or do things that was not in their “job description” (don’t you hate hearing that?!?). By being responsible and showing a positive attitude, you will surely make your way through the top despite the recession.


When you think about it, a recession is really like a badass winter. If you work hard and are patient enough, you will get great rewards once springtime arrives! Now, go get your coat on, it’s freezing this morning!

Source: The Financial Blogger