BANKRUPTCYHELPER

Preparing For Bankruptcy

2011-12-08T09:35:00.001-05:00

When you are considering a trip, usually, you make substantial preparations in anticipation of that trip. You make travel arrangements; you make sure you have a place to stay; you make reservations for any activities in which you wish to participate. You will often make significant plans and preparations for any “big” event. Bankruptcy is no different. It is a significant life event that demands some thought and preparation before you embark on it.

In talking with potential bankruptcy clients, it seems that a lot of them wait until the last minute before contacting a bankruptcy lawyer to find out how bankruptcy may help them. While visiting a bankruptcy lawyer most likely does not rank high on most people’s “bucket list,” if you are struggling financially, it most likely makes sense to determine if and how bankruptcy can help you sooner rather than later.

So, how can “preparing” for bankruptcy help? First, you will need to have the fees for the lawyer and for the court available. For now, for a chapter 7 filing, just the filing fee is $306.00. Additionally, before you file, you must complete a consumer credit counseling session and get the certification that must be filed with the court. If you “fail to plan” for your bankruptcy filing by finding out what you need ahead of time, when your car is on the verge of getting repo’d, you may not have the time and/or money to retain a bankruptcy lawyer.

Second, you can carefully go over your income and expenses and see where the trouble lies. Certainly a bankruptcy lawyer can help you identify the problem (with appropriate information) but you also need to know how you got into this financial mess. Some problems are easy to identify–temporary loss of income; extraordinary medical bills; overspending for a bit, etc. Bankruptcy can assist in overcoming those past problems but you need to be aware of the problem so that you can avoid it in the future. Bankruptcy is designed to be a “fresh start.” You can greatly assist in obtaining that “fresh start” by breaking or modifying some of the habits that perhaps got you here in the first place.

Third, make sure you know who you owe and how much. Find out if there is any collateral associated with the debts and gather up loan documents. Your lawyer will need this but, more importantly, you need to know your own financial picture. Credit reports are freely available and can be a big help. Also, if lawsuits or foreclosures have been filed against you, make sure you have that paperwork–all of it! It is important!

Finally, change your mindset. In dealing with individuals facing financial problems, it is often much more difficult instead of dealing with distressed businesses. That is because a business looks at assets and liabilities and can make a rational decision as to whether keeping an asset is worth the corresponding liability. Understandably, people are attached to their “things.” But, after all, they are just “things” and you have to consider carefully whether retaining a “thing” is worth the potential stress and headache. As an example, if you suffered a decrease in income and you have two relatively late model cars. No one wants to give up one or two cars but sometimes it is better to surrender a vehicle or two in order to keep your house (if that is important to you). There will be some emotional attachment to some “things” but it is imperative that you do this. Determining what is important to you is important for your bankruptcy lawyer in setting achievable goals for your bankruptcy filing.

Finally, do some research. There is a lot of information about bankruptcy that is freely available. However, you should exercise extreme caution in considering the information. Not that the information is inaccurate (some info may be outdated or simply inapplicable) but it takes an experienced profession to know what is appropriate and what is not. But, by familiarizing yourself with some basic bankruptcy information, you will be in a better position to appreciate and assist your bankruptcy lawyer in setting realistic and achievable goals.

After all, the real goal of a bankruptcy filing is a “fresh start.”

Source

Should I Short Sale My House Or Declare Bankruptcy?

2011-08-24T10:06:00.001-04:00

By Orfelia M Mayor, Esq.
You bought your home during the real estate rush a few years ago and now your dream home has turned into an upside down nightmare with adjustable interest rates. The rates are going up while the value of your home is going in the opposite direction. In addition, credit card debt is mounting since credit card companies have been on a mission to raise interest rates to the 25 - 29% level. What's a consumer to do?

Unfortunately, there's not much one can do to stem the tide of today's economic climate. The banks are going to do what they are going to...the credit card companies are going to raise their rates (regardless of your credit history) and to top it off, you never know if your job will be there tomorrow.

When it comes to your home, you do have a couple of options. If you cannot afford the payments on your home anymore, you can try to have the loan modified to a more affordable payment under the HAMP legislation. Banks are moving very slowly in this area and although they are reducing interest rates, they are not forgiving principle and closing the gap between your home's value and what is owed.

Another option is to short sell your home to a buyer. A short sale is when you sell the house for less than what is owed on it. This requires the bank's approval since they are taking a loss on the original mortgage. This process usually takes months and is not always successful. The difference between what you owed on the house and what it was sold for is called a deficiency. Banks will issue you a 1099 Misc for the amount of deficiency and you will have to declare it as income on your taxes. Yes, you will have to pay income tax on that amount. The good news is that until 2012, deficiencies on primary mortgages (your homestead home) are forgiven through legislation that President Bush signed. After 2012, you will have to pay taxes on deficiencies unless the law is extended by Congress.

In a bankruptcy, you can choose to surrender the home and all of your personal liability for the loan amount is forgiven. That includes any potential deficiency between what was owed and what the bank ends up selling the house for. There's no haggling with the bank, no approvals to wait for - no doubts as to what the future will bring. Additionally, filing bankruptcy will eliminate all of your other unsecured debt so you can truly get a fresh start and a good night's sleep.

If you'd like more information on bankruptcy options for eliminating debt, please visit http://www.ombankruptcy.com/

Orfelia M. Mayor, Esq.
Bankruptcy Law Firm of Orfelia M. Mayor, P.A.
Fort Lauderdale, Florida
http://www.ombankruptcy.com/

Credit Card Management Services, Inc. D.b.a. Debthelper.com
4611 Okeechobee Blvd., #114
West Palm Beach, FL 33417
P: 1-800-920-2262 – F: 1-866-561-2622

Newlyweds: 5 Money Matters For A Recession-Era Marriage

2011-07-01T09:23:00.000-04:00

Stephanie Christensen, provided by

Monday, June 27, 2011

You made it through the wedding planning and budgeting process, and started your life as a married couple. But have you decided as a couple how will you handle your finances? (Marriage can be like doubling an income, as long as you avoid doubling these expenses. Check out Marriage: For Richer Or Poorer?)
Handled improperly, marriage and unaddressed money issues can wreak havoc on a relationship. In 2009, The New York Times reported the findings of a Utah State University study which indicated that "couples who reported disagreeing about finance once a week were over 30 percent more likely to get divorced than couples who reported disagreeing about finances a few times a month."

The best way to avoid financial disagreements with your new spouse is to address challenges openly, have a shared plan of action, and to understand how credit and the financial system works. Maxine Sweet, vice president of public education for Experian and Wedding Planning Expert Kimberly Schlegel Whitman offer their expert advice for the top five money matters facing recession-era newlyweds.

1. Fight the Newlywed Homeowner Fantasy

Though you're starting a new life as a married couple, one's financial past does not go away so easily. Particularly if one spouse owns real estate that has lost significant value in the housing downturn, it's important to be realistic and plan for your new financial life together, with a broad vision on the long-term. If you're swept away by the fantasy that a newly married couple should purchase a home together to begin a new life, it's time for a reality check. Schlegel advises couples that own a home they can't sell to consider staying in the existing home until the market improves. If you're itching to buy housing right after marriage, consider renting as a temporary option to build savings and a solid financial foundation. Agree as a couple how long you will stay there, and how you will start saving and building your assets for home buying in the future. "The most important thing is to protect your credit history, so that when you are positioned to be able to buy a new home together, you can get approved, and at the best interest rate," says Schlegel.

2. Save for Worst-Case Scenarios

While the economy is making a slow recovery, job security is still wavering in many industries. Though double income may leave you feeling like money is pouring in, Schlegel advises married couples to have savings amounting to at least six months (preferably nine) of your total monthly income as a couple, in the event that one spouse loses a job, or some other disaster strikes. Choose an interest-bearing savings account together, and establish an automatic savings plan (ASP), so that a portion of each spouse's paycheck is deposited to the account regularly. Destroy the ATM card so there is no temptation to dip into the funds.

3. My Debt, Your Debt

While joining finances can be a "rite of married passage" for couples, Sweet urges newlyweds to remember that as a married couple, you are both responsible for debt incurred on a joint account. If you decide to consolidate finances, joint accounts will be reported on each of your individual credit reports, and both spouses are financially responsible for any debt incurred. Likewise, a missed payment will negatively impact both of your credit scores and histories. If you live in a "joint property state," which are predominantly located in the Western part of the United States, Sweet reminds that both spouses are held liable for debt, even if your name is not on the account.

4. Maintain Your Individuality

While financial planning should be a joint activity after marriage, Sweet also recommends keeping at least one individual account in each spouse's name open. This approach will ensure that each individual has easy access to credit in case of an emergency. If you do find yourself facing divorce one day, having an established account in your name will also help you rebuild your individual credit history. (Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning? See Marriage, Divorce And The Dotted Line.)

5. Understand Credit as a Married Couple

In today's tightened lending environment, credit is more important than ever. Sweet reminds that while each spouse will always have an individual credit history, even after marriage. Lenders will often consider both of your financial standings when you apply for credit jointly, especially for major purchases like a car or home. Missing just one payment on one of your individual accounts, could impact your future ability to open joint accounts.

The Bottom Line

Money and marriage can be a challenging and stressful issue for many. For recession-era newlyweds, the unique circumstances presented in an economic downturn make sound financial planning as spouses even more critical. Use these five steps as a guide to pave the way for your new job as joint money-managers, and ensure that you'll start your new financial life as a married couple on the right foot. (Strengthen your marriage by discussing these financial pitfalls. Refer to Top 6 Marriage-Killing Money Issues.)

Original story - Newlyweds: 5 Money Matters For A Recession-Era Marriage

Copyright (c) 2011 Investopedia US. All rights reserved. Investopedia.com is a division of ValueClick, Inc.

Important facts about bankruptcy

2011-05-26T09:08:00.000-04:00

by Jamie Billings

Bankruptcy is a tough road that best reserved for those who do not have any other options. Generally speaking, filing a Bankruptcy is a last resort. While it should not be entered into lightly, it may prove itself to be a positive solution for you. If you cannot pay your debts or you are dealing with a lawsuit bankruptcy maybe an option for you. Bankruptcy is an option when you have little or no income in order to make any kind of monthly payment to your creditors. The court will take away from you the responsibility of paying your debts. Bankruptcy usually lasts 12 months, after which time, any unpaid debt is written off.

One of the major aims of bankruptcy law is to give a financially distressed person an opportunity to make a new financial start. Bankruptcy laws help people who can no longer pay their creditors get a fresh start through liquidating assets to pay their debts or by creating a repayment plan. It also protects troubled businesses and provides for orderly distributions to business creditors through reorganization or liquidation.

Bankruptcy is an important decision and the law and it application to one's particular situation can be very complicated. It is generally recommend that one consult with an attorney with experience in the personal bankruptcy field.

If you feel comfortable with attempting the bankruptcy process without an attorney there are several online bankruptcy services and information that may assist you. Bankruptcy information provides an expert advice and a live forum alongside a regular roundup of the latest news, statistics, and research from the world of debt solutions. You may also find reports on issues surrounding bankruptcies.

If you are deeming for a bankruptcy help, you should first understand the different consequences of bankruptcy so you will then be able to make informed decisions about the alternatives available to you. You can also try and come to an informal repayment arrangement with your creditors you can consider a formal arrangement.

There are a number of factors to consider in deciding whether bankruptcy is an appropriate option. You may wish to consult an attorney before proceeding to file for bankruptcy.

Bankruptcy laws help people who can no longer pay their creditors get a fresh start through liquidating assets to pay their debts or by making a repayment plan. Bankruptcy laws also guard troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation.

Bankruptcy will really give you a fresh start. However, careful consideration should be given before filing for bankruptcy, because doing so may affect your credit and like any ordinary phenomena, it have other consequences.

Source

What To Do When Your Unemployment Checks Stop Coming?

2011-04-11T16:33:00.000-04:00

By Tisha Tolar, on April 6, 2011

You’ve learned to live off of your unemployment benefits. You’ve cut your budget and are finally starting to make some progress in the new job market. Right when all seems to be going well, the rules change. It is expected that many more states will start the process of cutting back on the unemployment benefits they are issuing to their unemployed residents.
The bottom line is many states are broke. Cutting back on unemployment helps solve a portion of this immediate financial problem. In addition to saving a state budget funds, the cuts are being considered because of the unemployment taxes companies have to pay. The hope is that if business taxes can be decreased, more companies would begin to hire new employees.
Changes Are Coming

States across the nation are inundated with claims for unemployment benefits since the recession came about. Employers were quick to downsize to keep the company afloat, leaving many in the lurch without reliable income or the prospects of finding a new job immediately. The unemployment trust funds set up in each state took a serious beating, prompting some to take a loan from the federal government in order to meet the demand for covering eligible benefit distributions to those without jobs.

The states of Florida and Arkansas are currently looking at reducing the number of weeks unemployed workers can receive benefits. Florida’s legislature has proposed cutting the benefit receipt time by 6 weeks. Indiana has been working to reduce the number of jobless that are eligible to receive benefits in the first place. Govenor of Indiana Mitch Daniels recently signed into law a bill that limits eligibility for unemployment benefits. The law also changes the way payments are calculated and these changes will start in July 2012. There are a total of 32 states which still owe monies back to a federal unemployment fund. For now, the total owed is estimated at $45.7 billion and states are expected to repay about $1.4 billion back in interest.

This is not the first time states have had to borrow federal funds and make cuts to unemployment benefits. It happened in the 1980s when a recession forced states to borrow $28 billion to meet the unemployment benefits needs for laid-off workers. During that time 40 of the 50 states made changes to the way money was distributed for unemployment, even going as far as changing up the eligibility guidelines for workers.

How to Prepare for Benefit Cuts

Above all you need to get off unemployment benefits. Even with multiple Congressional extensions they will eventually run out. Aside from that, the best thing you can do now if you are worried about cuts and changes to your unemployment benefits is be proactive about learning the facts. Follow the news in your state about the impending changes on benefits guidelines so you know what to expect.

You should also look at the big picture and work to save enough cash as you can while you look for work. It may not be easy to get by even with the benefits you are now receiving, but planning budget cuts of your own is a good start.

Brush up on old skills or learn new ones as you continue to look for a new job. There are often community accessible courses where you can learn new skills and improve your existing knowledge. Many of the unemployment departments in your state will either already require some job polishing efforts by recipients and often have resources available for free that can help spice up your resume. You will also be able to find opportunities to seek work through the unemployment office in your state.

Most changes will not be immediate but it is important to plan for the inevitable, especially if you have gone a while without securing a new source of income.

Source

My Life Experience with Bankruptcy

2011-02-17T16:55:00.000-05:00

by Andrew Bernstein
Certified Personal Finance Counselor

In 1985, I had completed my first 10 years in the newspaper business, 5 as a managing editor, which had been my dream all through school and life. The opportunity was presented to me to open my own publishing company and start to produce my own magazine and newspapers. I literally jumped in without even thinking about it. I knew how tough it was going to be and that there might be a stretch that finances would be tight.

My partner and I got great backing from a few local banks and investors and we were off and running. Our first publication, a women’s magazine, was an instant critical success. We had hired a great staff and of course with my experience as a managing editor, I was able to put a gentle hand in things. The problem was that we didn’t have a great sales and marketing team. We were relying on an outside company to do it and unfortunately their staff was not totally geared to the job. After a few months, we were able to cover costs, but had little left over for my partner and I. AND THAT IS WHERE MY TROUBLE BEGAN!!!

My credit had always been great. Buying cars, homes, etc., had never been a problem. I had 4 or 5 credit cards and I started living off them. Within about a year, the debt had crept up to the $10,000 mark, which back then was very significant. I was making all the mistakes, using one card to pay off another, using cash advances, etc.

It appeared as though I was heading for a small disaster and indeed I was. At some point I had maxed out all the cards and I was looking for more. I did get a little more and then the nightmare hit home. I started missing payments and got hit with penalties and late fees. The debt soared by several thousand and I was beginning to panic. I had always been taught that good credit is essential.

At this point, my ex-boss and good friend decided to lend me a hand. He would spot me a loan to pay off the debt and I would take on managing one of his publications in my spare time. It seemed like a good deal. The only problem was that I had not learned from my recent mistakes and started using the cards again out of necessity. Again the debt soared and while all this was going on, my partner decided to leave the business and when he did, I found out that he had left some major unpaid bills, so that of course effected the business.

It was the true perfect storm, no way to pay the bills, no way to pay myself and/or the credit card companies and the loan. To say the least it was depressing, at worst, it was totally devastating. My dream was about done and I was overwhelmed by all the debt. At that point I decided the only way out was a bankruptcy.

I filed for Chapter 7 on the personal side and I was going to file for a Chapter 11 business bankruptcy and then decided against it. I knew that it was a long shot to ever be able to open again, so I just let it go, despite pleas from certain leaders of the community to keep things going.

For the next year, I virtually lived in hiding, my reputation tarnished and my future looking bleak. There were no real credit counselors at the time per se, so there was no one to talk to about rebuilding, other than friends and interested colleagues. I started doing some consulting work for businesses that were having problems. It seemed so strange to see so many of them going through what I had just been through. I was able to help turn some of them around or at least delay the inevitable. It was then I also started seeing some potential in the fledging credit counseling industry. I joined a company in the late 1990’s and acted as a mediator between clients and their creditors. I felt as if I were getting a second chance. My own finances were now under control and I had decided to limit my credit cards to the minimum that I felt I needed.

My employer decided to move to FL in 2000 and I moved with them. I had always wanted to live in FL and this was a perfect opportunity, except that exactly a year later, the owner decided to move back to NY. I wanted to stay, so I was able to hook up with a similar company and in a short period of time, I became a floor manager and then general manager. The company was sold in 2004 and I immediately got hired by the company I work for now. I was doing counseling and began to conduct financial literacy seminars. It grew to the point where I was presenting programs in prisons, county jail facilities, the Air Force and many other agencies. I had and have truly found my niche. Of course, it’s not publishing, but I do get to write and create a lot of good and useful information. I have also learned to live exactly within my means and I keep to a tight monthly budget. It is the budgeting process that I love to teach at my seminars.

Most of all, I have discovered that there is life after bankruptcy and this is the message I like to convey to all my clients; that is, if I could come back from total economic devastation, so can they.

Andrew Bernstein

ABernstein@debthelper.com
Certified Personal Finance Counselor
Credit Card Management Services, Inc.
4611 Okeechobee Blvd. #114
West Palm Beach FL 33417
1-800-920-2262

How much it costs to attend Super Bowl XLV

2011-02-03T09:47:00.000-05:00

If you are a penny pincher, which, let's face it, most of us are, we will not be attending the big game this year. If by some chance you're debating, this will change your mind. I had no idea the costs behind just getting there. Yeah yeah I knew the tickets were expensive, but everything else added up.... Gimmie a break! This is the best way to go broke if your on a budget! ...and if your on a strict budget and decide to go anyway, you need our help. Call us 800-920-2262. We'll change your mind. You can thank us later. Debthelper.com

Break out your credit card. Better yet, several
By Jay MacDonald

Headed to Dallas for Super Bowl XLV?

Bring a credit card -- heck, bring a deck of them -- because everything in Texas is supersized this weekend, including the prices.

First and foremost, you're going to need a ticket. Good news: the NFL Ticket Exchange lists 21,032 seats still available as of Tuesday afternoon in the new $1.2 billion, 105,000-capacity Cowboys Stadium.

The bad news? They run between $2,400 and $23,730. Yes, apiece. Which might at least push your card's credit limit.

On the other hand, if you recently sold the ranch, you might want to consider an XLV offer on eBay for a private, 25-person luxury suite on the 40-yard line just two doors down from Cowboys owner Jerry Jones, complete with catering, attendant and private loo, for just $599,000.

For the ultimate in NFL street cred, Barclay's new official NFL Extra Points rewards card enables diehard fans to flash their team's colors and logo with every purchase. NFL Extra Points cardholders enjoy a 20 percent discount at NFLShop.com and earn loyalty points toward game day tickets, memorabilia and fan experiences with every purchase.

You can even cash in your rewards points for a seat at next year's Super Bowl, but you'd better get busy -- it will cost you 200,000 points at $1 per point.

Your Pockets after Super Bowl

Let's talk parking. According to ParkWhiz.com, you'll spend between $550 and $990 for a parking space one-tenth of a mile from Cowboys Stadium, no discount for steer horns on the grill. Ouch, right? If you don't mind riding a free shuttle, you can park one mile away for a mere $55.

As for accommodations, this might be the year to reconnect and crash with that geeky guy from high school who wound up in Big D. CBS MoneyWatch reports that the cost of a queen room at the Arlington Super 8 Motel goes for $1,198 plus tax for Friday and Saturday night. 'Nuff said.

If you plan to pull plastic to partake of the more exclusive Super Bowl parties, you may want to brace your card company first. A single ticket to the marquee Sports Illustrated soiree featuring the Black Eyed Peas -- the halftime performers for the big game -- runs $1,500. Hey, that's cheap; a stage-side cabana for 12 goes for $80,000. Admission to a private party with Prince will set you back $1,500 per as well, which makes the $750 cover charge to rapper Diddy's "Fantasy" blast seem like a steal.

Game: 60 minutes; commercials, 46

The SB wouldn't be the SB without those 46 wacky minutes of TV commercials that have garnered a following all their own over the years. The big game has become the big reveal for ad spots that feature celebrity send-ups, anthropomorphic animals and zany sports spoofs from major brands and bet-it-all upstarts alike.

The cost to join the XLV commercial lineup? A record $3 million for a 30-second spot. The reason? Last year's viewership topped 106 million, roughly one-third of the U.S. population. This year's viewership is predicted to exceed 110 million.

Among this year's most anticipated time-outs, Ozzy Osbourne and Justin Bieber take a "Star Trek" turn for Best Buy, reality star Kim Kardashian attempts to make Sketcher's Shape-Up shoe look sexy, comedians Richard Lewis and Roseanne Barr follow last year's Betty White mudfest in Snickers' clever "You're not yourself when you're hungry" shtick, NASCAR driver Danica Patrick and fitness gurl Jillian Michaels push the envelope for GoDaddy.com and rapper Eminem follows Ozzy into Claymation for Lipton Brisk iced tea.

E*Trade, which has featured its talking baby day traders for the past three years, will unleash the diapered dealers again this year, including a pregame "talk" with Fox Sports.

It's the only event where advertising is not the uninvited guest. Commercials come on, people stop talking.

-- Nick Utton
E*Trade chief marketing officer

"It's the only event where advertising is not the uninvited guest," E*Trade chief marketing officer Nick Utton told the New York Times. "Commercials come on, people stop talking."

Of course, the bigs will be back in force. Anheuser-Busch, which has unveiled everything from talking frogs, lizards and gorillas to a lamb streaker in 23 consecutive Super Bowls, has five spots this year -- its first as exclusive Super Bowl beer advertiser through 2014. Pepsi will air six spots for Pepsi MAX and Doritos, General Motors will roll out five and Hyundai three. If you can't wait for the show, the website SuperBowl-ads has posted 2011 Super Bowl ad previews.

Conspicuously absent from the XLV lineup are credit card commercials. Past Super Bowls teemed with credit card ads. This year, all we have is the pregame campaign from Visa, whose "Never Miss a Super Bowl Club" spots feature four weathered gents who have missed family births and weddings for 44 years in order to attend the big game.

Betting on the national anthem

There's little doubt that XLV will redline more than a few credit cards before the winning QB plants a wet one on the Lombardi Trophy this year. It is equally predicable that a fair number of cardholders will try to hedge their spending spree with a wager or two on the big game -- placed on their card, of course.

SBNation.com reports that MGM has already accepted a $1 million bet on the Packers. Win or lose, that's one cheesehead that's likely to stand alone!

With this gridiron classic too close to call -- Las Vegas odds makers favor Green Bay by 3 -- many soon-to-be super-debtors are hoping to hit on "prop bets" to prop up their finances. A "prop bet," or proposition bet, is a bet made on a proposition or outcome.

XLV's most intriguing prop bets?

•Coin toss: heads or tails?

•Which team will win the toss? Unexplainably, the NFC has won 12 straight Super Bowl coin flips. Will the Packers extend the streak?

•How long will it take Christina Aguilera to sing the national anthem? Over/under 1:50 minutes.

•How long will she hold the word "brave?" Over/under 6 seconds.

•Will her hair be any color other than blond?

•Will she wear a cowboy hat?

•How many times will controversial former Packers quarterback Brett Favre be mentioned? Over/under 2.5

•How many times will the word "lockout" be mentioned? (Why "lockout"? Owners have mentioned that they will likely lock players out in the offseason as the two sides continue contentious labor negotiations. Some believe that the lockout could continue for months, even putting next season in peril.) Over/under 1.5

•What color Gatorade will be dumped on the winning head coach? According to Pregame.com, a $100 bet returns $150 for yellow, $300 for clear or orange, $400 for red, $500 for lime green and $1,500 for blue.

Whoever emerges victorious, whether on the field, the advertising response or the tote boards, the only guaranteed winner of Super Bowl XLV will be the Dallas metroplex, which stands to rake in a record $202 million, according to a PricewaterhouseCoopers estimate.

Not bad for a week's work.

Source

5 Reasons You Will Always Be Broke

2011-01-24T11:03:00.000-05:00

Being broke sucks. I’ve had extended periods in my life where I have been living on the edge of financial ruin, so I know how stressful and overwhelming it can be. When you’re broke and hating your job, things are much worse. It's hard to leave ANY job, regardless of how insanely miserable it is. This is the reason I still need to work at my loathsome job as a financial planner.

Over the last 9 years working in financial planning (and struggling with my own budget), I have seen some commonalities when it comes to people living beyond their means.

Struggling with a job you hate job is hard enough, but when you never seem to have enough money to pay the bills, let alone get ahead, things can be damn depressing. Financial stress is extremely difficult on you, your marriage, and your children. I am speaking from personal experience here.

Getting ahead financially is not especially difficult, even in the absence of a high paying job. It all comes down to your spending habits. It seems so simple; spend less than you earn. In reality though is much more difficult than that.

Our society has taught us how to be greedy, needy, over spenders. In fact, it's empowered us to be downright irresponsible. We want what we want and then we go buy it! If we don't have the money, we buy it anyway.

With this in mind, here are the top 5 reasons that you will always be broke:

Your Spouse Is Out Of Control.

I've seen this time and time again. A non-working wife decides that she needs to fill her empty day with spending their money on anything and everything that looks remotely interesting. Ok, this is a little extreme, but having a spouse that is out of touch with the family finances (and reality), is very difficult to manage. If both partners are not on the same page with the money, things can, and usually do, get very ugly.

You're In Denial.

Millions of people reside here. This is when you refuse to accept that you need to take a serious look at your financial picture. Doing so would mean you might actually have to stop spending and do without the things that your cool neighbor has. Who wants to do that?

You Are A Dreamer.

I worked for a multi-level marketing (MLM) company about 15 years ago and I was taught that if I followed their "proven system", I would become wealthy. Guess what, thousands of us bought into it. We spent like we didn't have a care in the world, hell, we we're going to be RICH in 5 years. As it turns out, it was not what we all thought it was and the company, along with our hopes of becoming a millionaire, went down the toilet.

Dreams are fine and long as long as the execution plan is injected with a sense of reality. Blindly following hype is a sure path to pain and agony.

You Have No Budget.

Budgeting is a word that strikes fear into our hearts and sends us running for the hills. Why? Because it's absolutely boring, limiting, humbling, and at times depressing. At work, I have no problem building Excel spreadsheets and PowerPoint Presentations all day - still, I hate doing a budget. Now imagine the regular person who has no financial background and doesn't even know what Microsoft Office is. Are they going to budget? I think not. Calculators and graph paper don't have a ton of appeal.

You Waste Too Much Money.

This is supremely obvious, but you would be surprised at how few people actually track their discretionary spending. In know, in your brain right now you're saying that the last point was 'budgeting'. I'm not talking about that here. I'm talking about tracking. People don't think about the coffee and bagel in the morning or the afternoon soda and candy bar they buy, but guess what? They will have spent around $1,700 in a year on this stuff. The $1,700 that could have taken your family on vacation.

Start tracking every dime you spend and you will see the difference! Once you've tracked, you can budget. Without tracking, you have no idea what needs to me eliminated or limited in the first place!

There are a number of other reasons why you could be broke, but these are the 5 most common I've seen. So what do we do?

How NOT To Be Broke

It is certainly possible to turn our finances around and actually start showing in the black, but it takes work, often A LOT of work.

Here are 5 ways to avoid being broke:

Talk With A Professional.

This IS NOT a solicitation to get your business or to endorse any service! Remember, I hate my job and don't really want to help you manage your money. However, I do recommend finding a Certified Financial Planner (CFP) that can help you implement a comprehensive financial plan. Let's face it, most people are clueless when it comes to money.

I have clients with $500k in cash that don't have any idea what a mutual fund is. It's not that they're stupid, they just never took the time to learn. On top of that, investing jargon is confusing and often intimidating.

Use Cash Only.

Say what!!! Too many people fall victim to thinking they can just use their credit card this one time and they will pay it off when the bill comes. That one purchase turns into two and then into $40,000 in Visa and MasterCard debt. If you think you're smarter than that and are going to use your debit card instead, I've got news for you - it doesn't work either. You will end up over spending and getting slammed with $35 overdrawn account fees (and those annoying letters telling you about it). Budget out your needs for the month and use cash only. Use the Envelope Method to control spending. It's cheesy, but it works.
Cut Your Expenses.

I'm not talking about canceling your power or living off of Ramen Noodles, I'm talking about things like limiting eating out, avoiding buying movie theater snacks (a $5 candy bar, really?), reducing your tv cable stations from 800 to 200, and generally avoiding buying anything on impulse. It can be done, it sucks big time, but it can be done.

Set Up Automatic Savings From Your Paycheck.

This is one of my favorites because we totally forget that we are saving. I, unfortunately, have never been a good saver. I am fantastic at spending, but not so great at putting money away. Once you figure out exactly how much money you have going out each month, take a portion of the excess and have it taken out of your check and put into some form of savings vehicle. Also, put it into something that is not readily liquid. You will be much more likely to take it out and piss it away if it's sitting in cash at your bank. Buy a CD with a early withdrawal penalty or a Mutual Fund which charges a fee if you sell it before a certain period. Perhaps that will deter spending. (note: Don't use those account types for emergency funds. You can't get penalized for needing money when the furnace breaks!)

Educate Yourself.

Many of the folks who struggle with their bills are not educated when it comes to finance. People tend to bury their heads in the sand when the topic comes up. You cannot afford to do that anymore. Go find a book on personal finance and spend some time reading and understanding it. You should at least know the basics. The more you understand about money, saving, investing, budgeting, etc., the more likely you are to take control of your finances. If you let it control you, you will always be broke.

The bottom line is that if you're living beyond your means, you MUST take control of the situation immediately. I have seen too many people lose everything because they just couldn't get it together.
Don't let that be you too.

Source

New Toyota Commercial Reinforces Materialism

2010-11-05T16:20:00.000-04:00

Been hearing a lot about this commercial lately and decided to let you guys and gals judge for yourselves.

Can we say materialistic children? I embarass my child on a daily basis, with my paint peeling, missing hubcaps, skreetchingly loud when turning the wheel, dent on the back bumper, 10 year old Nissian.
This type of subliminal messaging can only lead your kids into money problems in the future. Teach your kids now about money! It's never to late! After all, wouldn't you rather be a part of the "Geek Family" than Broke?!

If your in debt, CALL DebtHelper.com 1.800.920.2262. We can help!

Five Steps to Take When a Collector Comes Calling for a Debt You Don’t Owe

2010-09-10T09:52:00.000-04:00

Debthelper.com = A+

If a debt collector is contacting you about a debt you know you don’t owe, explaining your case can be an uphill battle. Whether it’s a matter of mistaken identity, an honest error or identity theft, the Better Business Bureau recommends taking five steps to fight back against erroneous debt collectors.

According to a 2010 report, the FTC received 119,364 complaints about third-party and in-house debt collectors last year, up from 104,766 in 2008. While complaints can be about any number of issues, trying to collect on a debt the consumer doesn’t owe is common. In a recent example, the FTC reached a million-dollar settlement with Credit Bureau Collection Services over accusations that the collection agency violated federal law by inaccurately reporting credit information and pressing consumers to pay debts they often did not owe.

“It can be an exhausting process to set the record straight on a debt you don’t actually owe,” said Alison Southwick, BBB spokesperson. “Because debts are often sold and resold to many different collection agencies over time, you may have to make the same case every few years when the debt trades hands again.”

If you’re receiving calls for a debt you don’t owe, it could be a case of mistaken identity. Perhaps you share the same name, or even inherited an old phone number of the person who actually owes the debt.

You could also be the victim of zombie debt—it could be that you paid the original debt off but it wasn’t recorded as paid, or the statute of limitations on the debt has expired and the debt collector is trying to get you to pay for a debt you can no longer be taken to court over.

A final common cause of being hounded for a debt you don’t owe is fraud. It could be that you have become a victim of identity theft and someone is opening up new lines of credit or buying items using your good name. Additionally, the “debt collector” calling could actually be an identity thief who is trying to get you to divulge personal financial information such as Social Security, bank and credit card numbers.

If you’re being pursued for a debt you don’t think you owe, BBB recommends taking the following five steps:

1. Request written proof of the debt. By law, a debt collection agency must provide you with a validation notice within five days of contacting you about the debt. If you would like to get verification of the debt, send a written request to the debt collector within 30 days after you receive the validation notice. This written proof can help you determine if the callers are actually identity thieves, or if you really do owe the debt. Once you have the name and contact information for the agency, confirm they are a legitimate debt collector with your BBB at www.bbb.org. After you confirm that you don’t owe the debt, advise the debt collector you do not owe the debt and advise them to stop contacting you (see step 4).

2. Correct any errors. After confirming you do not owe the debt, you may want to correct any incorrect submission related to the debt captured on your credit report. Contact the company that has provided the information to the reporting bureau by writing a detailed letter and include copies of pertinent documents which back your case. The FTC provides additional information on how to report errors at www.ftc.gov.

3. Weed out fraud and errors. Check your credit report with the three major credit reporting bureaus, Experian, Equifax and Transunion every year by visiting www.annualcreditreport.com. If you’ve been the victim of fraud or identity theft, you may also be eligible to view your reports for free. By keeping a close eye on your credit reports, you’ll be able to more quickly identify fraudulent activity or mistakes and make corrections before the debt collector calls.

4. Tell them to stop contacting you. According to federal law, a debt collector cannot continue to contact you—at work or home—if you tell them to stop. After confirming you do not owe the debt in question, you may cease all contact from the debt collection company by sending a letter (via certified mail) to the debt collector advising them to cease contact. Keep a copy of the letter and the return receipt for verification purposes. Any further contact to you from the debt collector except to advise you there will be no further contact, or to inform you that the agency is filing legal action, is a violation of the FDCPA.

5. File a complaint with the Federal Trade Commission. Familiarize yourself with the consumer protections provided under the Fair Debt Collection Practices Act. Included are rules that debt collectors may not make false or deceptive claims and must investigate the validity of a dispute over a debt. If a debt collector violates the law, report them to the FTC—the federal government’s agency overseeing fair debt collection practices. You should also file a complaint with your BBB at www.bbb.org.

Source

You're eligible for Chapter 7 bankruptcy, but should you file?

2010-09-01T08:33:00.000-04:00

Dear Opening Credits,

My husband and I have accumulated a lot of credit card debt, due to his layoff from a good job and extended unemployment/underemployment. We consulted with an attorney, and it looks like we can do Chapter 7 bankruptcy. We're trying to look at other options, but we're not sure what are legitimate and what are not. Also, we have a lot of pause about a bankruptcy and its effects on our lives for the next 10 years. I'm also concerned about a bad credit report. (Our credit was very good before all this happened.) Thank you. -- Laura

Dear Laura,

Are you familiar with the snappy little adage, "Just because you can doesn't mean you should"? It applies well to bankruptcy. Many people are able to file, but a good portion would actually be better off taking a different course of action. While your attorney said it is a viable option for you, you're right to question whether the legal route is the best road to travel. The person you spoke with likely didn't cover the myriad ways to deal with the debt.

Chapter 7 bankruptcy has equal parts wonderful upsides and rotten downsides. Indeed, it can be a great way to jump-start a new financial beginning. With it, you can walk away from those credit card balances -- well, at least those that weren't incurred for high-dollar cash advances or luxury goods within 60 to 90 days of filing. Those types of purchases might draw the creditor's attention, prompting them to ask that those debts not get discharged.

You don't say how much you owe, but I'll assume it's so much that you're struggling to meet your payments. If you've been late a few times, the interest rates on those accounts will have soared. They could be so high that nearly all of your minimum payment is going toward finance charges. Therefore, each month is the same: You struggle, scrape up as much cash as you can, neglect and even fall behind on vital expenses but get nowhere with that balance.

It seems like a horrible waste, doesn't it? Just think about how you would feel if you could get rid of that debt in bankruptcy. You would be able to use that money you were sending your creditors to pay for living expenses and non-dischargeable bills, and you might even be able to add some into a savings account. That's what people mean when they say it's a fresh start.

Before you get the wrong idea that I'm pushing you toward bankruptcy, know that I am not. If your husband will likely be working again within the next year, I would far prefer that you go on a creditor's hardship plan (assuming it was open to you) where you ask that they suspend payments and maybe even interest and fees for a while. When paychecks start flowing in again, you can get back on track. The fact is, you borrowed that money and ought to repay it if you can.

Other downsides to consider: The bankruptcy notation will remain on your credit report for a total of 10 years. That's a long time for such a black mark to follow you. Back when I was counseling, I used to have my clients picture themselves 10 years older, so a 37-year-old would have to envision herself at 47. Look at it in that kind of mirror and the gravity of a decade is apparent. As for your score, bankruptcy will take it down from where it is now to the very bottom, and it will languish there for a while. Regarding future job prospects, employers aren't privy to your score, but they can see your report --- and thus the bankruptcy. While they are not permitted to discriminate against job applicants who've filed, such a allegation would be virtually impossible for you to prove.

More, if you wanted to finance something during this time -- be it a home, car or new TV -- you would probably be charged a dreadfully high rate of interest. Have valuable property? You may have to give some of it up.

To really help you decide, please visit an accredited credit counseling agency. They will be able to give you a thorough rundown on all of your options, and that may or may not include bankruptcy. For example, a debt management plan could work well for you. Contrary to popular lore, repaying debt on such a program typically boosts a credit rating because it enables participants to resume steady payments.

So should you file, Laura? Perhaps, but only after exploring all other options first.

Source

How Not to Fail at Frugality

2010-08-10T10:27:00.000-04:00

Yesterday, I had a wonderful conversation with an Associated Press reporter who was writing a story about teaching children how to be frugal. The discussion wound around through several topics, eventually coming back to the idea that many people (like, for example, Ramit) do not like frugality because it doesn’t give you the “big win” and that people don’t like giving up things like lattes.

She herself gave an example of this. She lives in a major metropolitan area and lives in a small apartment, which means that, in order to entertain friends, she has to do it outside of the apartment.

My response to her was simple: one of her key values is entertaining friends, so that shouldn’t be an area where she cuts back. Instead, she should cut other areas to the bone, and I mentioned making your own laundry detergent.

Why the “latte factor” has problems
David Bach has long been one of the most well-known personal finance voices out there. He’s written a small truckload of personal finance books and reached a lot of people.

One of his most well-known ideas is that of the “latte factor.” To put it simply, it means that if you simply stop buying a latte each day and save that $5, you’ll begin to build that into a great deal of wealth. $5 every day for a year adds up to about $1,800. Investing it at 8% interest and repeating for two decades gets you just under $83,000. That’s just from avoiding a single latte a day.

The math there is absolutely correct – and the concept works, too. If you cut something small out of your life and consistently save the money from that cut, you’re going to end up with some serious change over time.

The problem is what you’re giving up. The “latte factor” of course refers to coffee – something that’s inessential to basic life, something that’s purely a treat. Yet, for some people, a latte a few times a week is a significant part of their emotional happiness. They rely on that sweet flavor and that little caffeine boost and it fuels them throughout a challenging day.

When you take away that latte – from some people, mind you, not everyone – a very noticeable part of their spice of life goes away. The latte is the big treat in their day that really brings them a shot of happiness and makes the day easier. Taking that away makes their day much drearier.

That’s the inherent problem with the latte factor: when you apply it indiscriminately to everything in your life, you’re going to chop away things that are unimportant – but you’re going to also whack away things that are really important to you.

I prefer the “laundry detergent” factor
Everyone has different little things that make their life happy and bearable. For some people, it is that morning cup of coffee. For me, it’s having books to read and a game to play.

The trick is figuring out which of those little thing really does brighten your life – and which of those things don’t. What you’ll find is that when you really dig into this question, you begin to find that surprisingly few things really make you significantly happy (beyond the initial burst of pleasure at acquiring something). An awful lot of things we buy are part of a routine or done to make others happy or done because we’ve believed that it’ll make us happy when it really doesn’t.

That’s the reason I prefer the “laundry detergent factor” to the “latte factor.” Some people get a great deal of personal pleasure and joy from their morning latte. I’ve yet to meet someone whose life is made substantially better by their decision to buy Tide over another laundry detergent.

Thus, I usually tell people to make their own. You’ll save around twenty cents per load of laundry with a homebrew detergent, and it takes about ten minutes to make a batch that will handle fifty loads. Quick back-of-the-envelope math tells you that making a batch of this stuff earns you about $10 (after tax) in ten minutes.

Once you’ve done that and seen how easy it is to save money while living a little cheaper and not reducing your quality of life, start searching for other methods to do it again. Install a programmable thermostat to whack your monthly energy bill. Properly inflate your car tires to improve your gas mileage. If you don’t read magazines much, cancel your magazine subscriptions. If you rarely watch television, drop your cable. Make a simple price book and figure out the best value grocery store around you (unless, of course, you get deep personal value from shopping specifically at Kroger’s).

If something seems difficult or makes you deeply sad, don’t be afraid to back off. You’re probably hitting on something important to you and, unless you’re in deep financial straits, you’ll find more success by leaving those areas alone.

Good luck!

Source

America's new debtor prison: Jail time being given to those who owe

2010-07-15T09:48:00.000-04:00

Debtors prisons were federally abolished in the United States in the 1800's, yet in certain states, they seem to be making a comeback. Out of Minnesota come disturbing reports of Americans being thrown in jail due to outstanding bills -- sometimes for as little as $85. The Star-Tribune of Minneapolis profiles a number of people who say their debts got them jailed, including Joy Uhlmeyer a 57-year-old patient care advocate who was pulled over on her way home from visiting her elderly mother and put in jail for a night for missing a court hearing about unpaid debt.

The Star-Tribune reviewed the state's court documents and found that arrests like Uhlmeyer's are up 60% in Minnesota over the past four years. And Minnesota isn't the only state where this is happening. It's a turn of events Ed Mierzwinski, consumer program director at advocacy group U.S. Public Interest Research Groups (or PIRG), calls a "very bad situation for consumers." Mierzwinski attributes the practice to "bottom-feeder debt collectors [who] are very aggressive."

People who are imprisoned for their debts are technically locked up for contempt of court after failing to appear for a hearing pertaining to their debt. It's a legal loophole that debt-collection companies are increasingly using. Here's how it works: First, the collections company files a lawsuit against the debtor, which requires them to appear in court. If the debtor doesn't show up, the creditor wins a default judgment against them. This allows them to ask the court to schedule another hearing at which the judge can go through the debtor's assets and determine if actions such as wage garnishments or bank account seizures can take place.

If the debtor doesn't show up to that hearing, the hammer of justice can come down hard and fast. From there, the judge can order the debtor in contempt of court and issue a warrant for their arrest. If this seems unnecessarily punitive, the price to get out of jail is even more so, say consumer advocates: Generally, the judge sets the cost of bail at the amount of the disputed debt, an amount which is then turned over to the creditor.

"This is the private use of government resources to collect debt," Pete Barry, partner at law firm Barry & Slade LLC, told Walletpop. One of Barry's clients was arrested at her workplace for not filling out and sending back a form demanded by the creditor. The client, Barry says, suffered the humiliation of having to have her boss come to the jail and post a bond before she could be released. The bond money, he added, was turned over to the creditor. "They're using the court system as their collection agent," he says.

"There are big issues," says Ira Rhinegold, executive director of the National Association of Consumer Advocates. "Minnesota isn't the only place it's happening, but it seems to be the worst. They're leading the way," he says, noting that NACA has heard similar stories out of Wisconsin, New Jersey, Arkansas and Washington.

Rhinegold tells Walletpop that some unscrupulous debt collectors never even send debtors the required notification that the case is being taken to court. Then the debtor fails to show up and the collector wins a default judgment, which can pave the way for imprisonment until they post their bond.

What's behind all of this? "In some ways it stems from the growth of the debt buying industry," says Rhinegold. Collection agencies buy debt for pennies on the dollar, then hire lawyers to chase after even the smallest amounts. Of all of the unfair aspects of this chain of events, advocates say the most galling is that, in many cases, consumers may not even be legally responsible for the debts for which they're being jailed. In fact, the debt may not even be theirs, the amount may be inflated by penalties and attorney's fees, and it's almost certainly been written off by the original creditor -- who then resold it for pennies on the dollar to a debt-collection firm that plays hardball to get money from consumers. Often, says Rhinegold, the collector doesn't even have the paperwork that would prove that existence of the debt. In these cases, the judge will dismiss the case against the debtor. All the debtor had to do was show up for their day in court.

For this reason, Gail Hillebrand, financial services campaign manager at nonprofit Consumers Union, says it's vitally important for consumers to respond if you get a letter threatening legal action and requiring a court appearance. The name of the collector can change because of how often debt is resold, she warns. So if you have an outstanding debt, don't assume that a notice that seems to come from a different company than the original lender is junk mail. "The problem is that people don't realize what it is," she says.

It's important to do some research first, though. If the debt isn't yours, you can dispute it. Even if it is, showing up to court can sometimes lead to an outcome in your favor if the collector can't prove you owe the debt. Either way, it will keep you from being hauled off in handcuffs.

Source

When will BP send you to BK?

2010-06-28T14:08:00.002-04:00

If you still need the required counseling for bankruptcy,
Debthelper.com can help! Call us today. 800-920-2262.

Alert: Obama Warns World Leaders ‘Millions Could Die’ From Gulf Oil Disaster

A sobering report circulating in the Kremlin today from President Medvedev’s meeting with other World leaders at the G8 summit in Muskoka, Ontario states that President Obama has warned his counterparts that the Gulf of Mexico oil disaster “will most likely kill millions, perhaps tens of millions” of people during the coming year.

Fueling Obama’s dire assessment of this “Gulf Apocalypse”, this report says, are the oil and toxic rains now being reported to be falling throughout the US Gulf Coast region due to the fracturing of the Gulf of Mexico seafloor allowing untold millions of gallons of oil and millions of cubic feet of methane gas to escape unchecked into our World’s seventh largest body of water, not to mention the millions of gallons of dangerous disbursements being used that is poisoning everything in its path.

So dangerous has the Gulf Coast environment become to human beings the United States Centers for Disease Control and Prevention (CDC) issued a warning that, in part, says: “People, including pregnant women, can be exposed to these chemicals by breathing them (air), by swallowing them (water, food), or by touching them (skin). If possible, everyone, including pregnant women, should avoid the oil and spill-affected areas.”

With nearly 20 million American’s living along the affected Gulf Coast region one wonders where they could all go and leaving many to speculate a massive evacuation is being planned by the US Government of the entire region.

This view, however, is not shared by a Louisiana woman named Kindra Arnesen who was allowed unprecedented access to the BP Operations Center overseeing this catastrophe and reported to the Gulf Emergency Summit this past week that along with millions of fish dying because of this disaster people are falling ill all over the region.

Even worse is Arnesen’s incredibly reporting that even as this oil disaster grows BP is being allowed the US government to begin cutting costs in their cleanup and oil containment efforts.
Important to note about in this report is that Obama’s warning that “millions could die” from this disaster has been further confirmed by the American engineer who helped lead the team to put out the Persian Gulf oil fires set by Saddam Hussein in the first Iraq war and had warned a full 12 months before the April sinking of the Deepwater Horizon that BP was drilling into a huge methane deposit that if released would be beyond catastrophic, it would be biblical in its scale of destruction.

Interesting to note too is that one of the World’s top oil and gas industry experts Matthew Simmons is calling for the evacuation of the entire US Gulf Coast, and as we can read as quoted by him in an interview with the Washington Post News Service: “We’re going to have to evacuate the Gulf States. Can you imagine evacuating 20 million people? . . . This story is 80 times worse than I thought.”

Now the “80 times worse than I thought” comment by Simmons is one of the most vitally important points to understand in this unfolding historic disaster due to the findings of the United States National Oceanic and Atmospheric Administration (NOAA) high-tech research ship Thomas Jefferson, and as we can read as reported by the Los Angeles Times News Service:
“The National Oceanic and Atmospheric Administration on Monday released new data from the agency’s latest research trip through the Gulf of Mexico, showing concentrations of oil below the surface at more than 3,600 feet below the surface, about 7.5 nautical miles southwest of the BP’s blown-out well.

The Thomas Jefferson research ship found evidence of depleted oxygen, a potential sign of microbes digesting oil, in the area. Acoustic and fluorometric instruments likewise indicated the presence of oil. Water samples taken on the trip have not been analyzed.
Since the leak began April 20, attention has been focused on surface oil washing up on environmentally fragile shoreline ecosystems. But “plumes” or “clouds” of oil hovering in the water column below the surface, where myriad marine life eat, breed and swim, has as much or more potential to cause ecological damage to the Gulf, scientists have warned.”

Not being explained to the American people about NOAA’s findings is that the live video feed of this spill being shown to them of this spill contains oil and methane gas being expelled at pressures estimated to be at 100,000 pounds per square inch (psi) and cannot in any way being associated with the massive underwater oil plumes found by the Thomas Jefferson nearly 8 kilometers away.

To where these massive underwater oil plumes are coming from, Simmons stated during an interview on the US television network MSNBC that the release point was “5 to 6 miles away” from where the Deepwater Horizon sunk.

In our June 10th report “Scientists Warn Gulf Of Mexico Sea Floor Fractured “Beyond Repair” we reported that Russian scientists (the only scientists to have actually viewed this disaster in their deep submersible submarines) had likewise confirmed Simmons dire assessment of this catastrophe; reports, mind you, that not only have we seen, but Simmons has undoubtedly seen too.

Most incredibly in all of these events is that Obama has issued what many experts are calling a “get out of jail free card” to BP in the setting up of a $20 Billion “sham” cleanup fund paid for by this British oil giant that allowed them to borrow from Goldman Sachs the entire amount and not affecting their bottom line for years, if not decades to come.

To the greatest consequence of this catastrophe upon the American people, an FSB appendix to this report warns that the US Soldiers currently deployed throughout their island territory of Puerto Rico are in fact being trained in how to “suppress and contain” large concentrations of people and being “recycled” to military bases throughout the State of Florida where they will soon be joined by an estimated 28,000 NATO allied troops where both will join up with an estimated 7,000 pre-positioned UN marked vehicles for purposes “still not known or clearly stated by the US”.

To the greatest danger facing the American people it comes from the founder of the psychoanalytic school of psychiatry Sigmund Freud’s nephew Edward Bernays, the father of the field of “public relations” and propaganda, who said that news was made “when reality is distilled down to the most simplified and dramatized form and it appeals to the instincts of the public mind.”

Unfortunately, the “instincts” being instilled in these Americans “public mind” is going to kill them as there is NOTHING to be simplified about this catastrophe, and what they aren’t being told by their so called mainstream media, or what they aren’t willing to find out for themselves, is going to kill them. Just like all of those who cleaned up the1989 Exxon Valdez spill disaster, ALMOST ALL OF WHOM ARE NOW DEAD.

Bankruptcy - What if the Creditor Didn't Intend to Harass You?

2010-06-25T11:38:00.003-04:00

Written on April 2, 2010 by Eugene S. Melchionne Attorney at Law in Bankruptcy Basics

It is not necessary to prove intent to violate the automatic stay when a creditor calls after you have filed for bankruptcy in order to recover damages for harassment.

Considering the previous post, you may imagine that the creditor who harassed you claims in Court, “I didn’t mean to violate the automatic stay when I sent bills and made those 3 AM phone calls. It was an honest mistake!” Thankfully, if he argues something like this, the Judge will side with you.

When attorneys file motions against creditors for violating the automatic stay, all they need to show is that the actions were a “willful violation” of the stay. That means the creditor “knew or had reason to know” that you filed for bankruptcy.

In practical terms, this means your attorney does not need to show intent or some nefarious scheme to try to collect despite the bankruptcy or sent out an incriminating memo stating a desire to violate the stay.

In other words, your lawyer merely needs to show the Court that the creditor should have known the automatic stay existed and that the creditor sent the notice. By showing this, you will receive damages from your harassing creditor.

Of course, the nest question to be answered is “what are the damages?” While emotions are a factor, it is impossible to put a number on them. However, if you lose time from work or have to pay an attorney to defend you or are put to some other cost, these can be recoverable.

If you’re thinking about bankruptcy in Connecticut, please contact me for a free initial consultation to get answers to all of your Connecticut bankruptcy questions.

Contact Attorney Melchionne
Eugene S. Melchionne, Esq.27 First Ave.Waterbury, CT 06710(203) 757-3437

www.mybkcounseling.com

Credit after bankruptcy: Brave new world in 2010

2010-05-26T12:16:00.002-04:00

If you still need the required counseling for bankruptcy, Debthelper.com can help! Call us today. 800-920-2262

What will bankruptcy do to my credit rating ? is the most frequent question prospective bankruptcy filers ask. I try to stifle my knee jerk reaction to ask if anyone who knew the truth about their financial situation would lend to them now, and now I say truthfully, I don’t know.

Before the Great Recession, I could tell clients several things with confidence:

Your bankruptcy filing becomes less and less significant with each passing year

A recent bankruptcy influences chiefly the price of credit; credit is still available

You recover for home buying purposes faster than for unsecured credit

Parts of your credit score will go up immediately after the discharge

As the economy improves, I doubt that we will return soon to the way it was before: credit given out indiscriminately almost irrespectively of the borrower’s ability to repay. I hope not.

I think that going forward credit in general will be more limited and even based on an estimate of the borrower’s ability to repay. I hope that borrowers will take on debt with the same thoughts in mind.

But even if credit is less available, I suspect that the principles I’ve been reciting will remain true. People with little or no debt will be better candidates for credit than those who have lots of outstanding credit, even if they are current on that debt.

The other fundamental issue is that one’s financial health is not measured by how much money you can borrow. It’s measured by your net worth, your available cash flow, and the stability of your income. The elephant in the room for most of my clients is that, whatever their age, they are under-prepared for retirement. Rather than thinking about what kind of “things’ they can acquire on credit, they need to be living beneath their means and saving for retirement.

But I am certain that whatever the availability and terms of future credit, 99.9% of the people in my office asking that question will be better off shedding impossible debt in bankruptcy.

Source

Mutual Funds

2010-05-14T11:21:00.000-04:00

Establish the right mix of mutual funds for you Low-risk stuff pays nothing nowadays, so you need to invest in stocks and bonds to earn a decent return.
Ingredients:
• Internet access.
• The result of your risk-tolerance test.
Instructions:
• See the model portfolios assembled using Kiplinger 25 funds.
• Choose the portfolio that most closely matches your recommended allocation. Tweak the allocations if your target for stocks doesn't align closely with one of the model portfolios.
If you're investing in a taxable account, consider using the Fidelity Intermediate Municipal Income (FLTMX) fund for some or all of your bond allocation.
Total time: five minutes.

Buy mutual funds
Ingredients:
• Internet access.
• A brokerage account.
• Your perfect portfolio.
• A calculator.
Instructions:
• Translate your portfolio's allocations from percentages to the actual dollar amounts you plan to invest.
• Next, log in to your brokerage account, and go to "trade."
• Place your orders.
Total time: up to 15 minutes.

See whether your fund managers have skin in the game
If the fund manager has money alongside yours, your interests are aligned.
Ingredients:
• Telephone or Internet access.
• Money in a mutual fund.
Instructions:
• Read a fund's "statement of additional information" to find out whether your manager has money in the fund. The statement will describe a manager's investment in broad dollar ranges, from zero to more than $1 million.
The statement is usually available on the fund's website. If not, call the sponsor and ask for the document to be mailed to you.
Total time: five minutes online or about 10 minutes for a phone call.
Source

South Florida Distressed Homeowners

2010-05-13T11:40:00.000-04:00

The following are some of the options open to the South Florida distressed homeowner:

Many homeowners in Florida have experienced an unprecedented loss of value in their homes. In the years leading up to what the media likes to call the "Mortgage Meltdown" many homeowners were enticed to tap in to the seemingly abundant and always increasing equity in their home to consolidate credit card debt, do home improvements, or simply take some cash out of their home to pay for a vacation.
The temptation to take out a Home Equity Line of Credit (HELOC) or to refinance was fueled by the never ending advertisements on all type of media promising all time low interest rates, small monthly payments, and the ability to "write off" the payments come tax time.

1. Mortgage Modification - HAMP or otherwise. As the mortgage companies have ramped up their staffing, the ability to achieve a HAMP or other modification has been increasing. The government regulations have also been improved over time to increase the achievement of modifications.

2. Short Sale - often favored by real estate brokers, but may soon have more actual benefit for homeowners if FNMA guidelines are changed to allow for better future credit for short sales rather than foreclosure.

3. Deed in Lieu of Foreclosure - the homeowner gives a deed to the mortgage company to avoid a full judicial foreclosure. Often not requested by mortgage companies due to possible title issues.

4. "Walk Away" from Home

5. Chapter 13 Bankruptcy - often combining a HAMP modification for the first mortgage and an avoidance of the second mortgage. Recent changes in HAMP rules have approved the use of HAMP within chapter 13 bankruptcy.
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New Grads: Four Money Facts Worth Knowing

2010-05-13T11:15:00.002-04:00

Graduation season’s just around the corner, and soon-to-be grads nationwide are plotting the next big move. Many of you coming out of college may soon start earning your first steady, full-time paycheck (and it will hopefully be bigger than those $8-an-hour jobs you used to work over summer vacation).

But with a new income come new expenses.

The transition from college to real life can be a culture shock…especially on finances. It’s easy to get spend happy with your new lease on life, but before you go out and buy the BMW you’ve been eying since your senior year in high school (and yes, no matter how meager your first full-time salary, there’s an auto dealer somewhere that’ll approve that loan) take these four post-grad money tips into consideration:

Mom and Pop Are the Best Landlords

Last week, I wrote all about how to get a cheaper rental rate. But if you want to be really savvy, avoid paying rent altogether. I know you don’t want to hear it, but why not try moving back in with Mom and Dad?

Your parents probably won’t charge rent (or little if any at all), will probably pay all the utilities, and they might even foot the grocery bill. What’s not to love? If they’re willing, and you think you can forgo your sanity for six months to a year (I’m kidding), it might be wise to consider moving in with Mom and Dad for a while after college.

Yes, after four years of independence, it’s hard! But with such low living expenses, you can start paying off those student loans or saving for an apartment of your own. I managed to survive living with my parents for a year after college and my finances are still thanking me today.

New Cars Aren’t a Good Investment

So many people think they need to buy a brand new car as soon as they graduate from college. True: some grads may need a new car since their college ride is about to kick the bucket, but many of us can get by on the same wheels for a while.

If your car is starting to cost you more in repairs than it’s worth, than it might be time to buy a new car.

That said, it’s not always the best idea to buy a brand new car. I made this choice right out of college and now wish I would have opted for a used car. I figured after four years of college and landing a full time job, I deserved to take out a $17,000 loan and buy a brand new car. But I’ve since realized that hot- off-the-lot cars aren’t the best investment…in fact they’re not really an investment at all.

Brand new cars depreciate rapidly…as soon as you drive them off the lot. And the value of a car continues in a downward spiral for the rest of its useful life. So, if you’re in desperate need of transportation after graduation, consider scouring the used car section of the want ads for good deals or check out the certified used cars that some dealerships offer.

Your Bank Account Won’t Keep Up With Your Social Life

In addition to your new work life and financial independence, your social life may blossom after graduation. Hanging out with friends and even going on dates may become the foundation of your evenings and weekends. It’ll be tempting to follow in friends’ footsteps and spend loads of cash on daily happy hours, dinners, or other events.

You can’t avoid a social life in an effort to save money, so you’ve got to find a happy medium. Work out a budget with your new income and decide how much you can spend — not what your friends can spend — on entertainment every month. Of course, allow yourself a bit more fun money than you did in college now that you’re a working guy or gal. Just figure out what maximum amount will allow you to save for other things like a vacation, a house, or retirement.

It’s All About BALANCE

I’ve mentioned before the importance of balance to everyone’s financial situation. A life change like college graduation upsets the balance of your budget. That’s okay; you’ll just need to sit down and figure out what works best for you now that you’re not eating dorm food or relying on your parents to deposit $100 into your bank account every other week.

Budgeting after college graduation can be tough and confusing. If you know what’ll work best for you instead of trying to keep up with everyone else, you’ll be setting the foundation for a prosperous and happy financial future.

Carrie is in her mid-twenties and currently studying for the CPA exam, so she can give us some desperately-needed tax advice. She blogs about her journey to financial independence at Carrie…On the Cheap from her home in Kansas City, Missouri. You can also find her on Twitter: @CarrieCheap.

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7 Ways Moms Can Boost Their Financial Security

2010-05-06T14:18:00.003-04:00

This Mother’s Day, focus on your financial future -- and that of your children.
When it comes to the financial relationship between moms and their kids, it’s all about giving -- giving advice, giving a helping hand, giving to charity. For instance, in the Thrivent Financial/Kiplinger Survey of Family Finances, 17% of respondents cited their mother as being most influential in shaping their attitude toward charitable giving, second only to faith communities (22%). At 6%, dads were in fifth place.

That squares with other surveys showing that mothers are the most influential source when it comes to teaching money-management skills. A new poll by Charles Schwab found that nearly 60% of women have used the recent economic turmoil to talk to their children more about money management.

At the same time, women express more anxiety about money than men do. In the Thrivent Financial/Kiplinger survey, women were more likely than men to say that they were struggling financially (37% versus 29%) and less likely to describe their financial situation as stable (26% versus 33%). Likewise, in the latest Retirement Confidence Survey from the Employee Benefit Research Institute, men were more confident than women that they would be able to save enough to live comfortably in retirement.

So this Mother’s Day, maybe moms should take a break from giving and spend a few minutes taking stock of their own finances so that they can bolster their financial security and that of their children. Take these seven steps to start the ball rolling.

Talk things out. When asked in the Thrivent Financial/Kiplinger survey what they would change about their spouse or partner financially, 29% of women confessed that they’d like him to earn more. But 21% said they wished he would discuss money issues more frequently. Too shy to start what may be an awkward conversation? At least sit down together to write down your goals and see whether you’re on the same page. Or schedule a money date to discuss financial issues.

Start saving for retirement. Small amounts put aside when you're young grow into great gobs of cash when you're older -- and lay the foundation for financial security and independence. Take the case of two people -- one who saved $3,000 a year for ten years (or $30,000) in an individual retirement account (IRA) between the ages of 20 and 30 and then stopped, versus another who began saving at age 30 and faithfully contributed $3,000 each year for 36 years (or $108,000) until retirement at age 66. Assuming an 8% annual return, the person who started saving earlier would accumulate about $778,000, compared with roughly $602,000 for the individual who started later (see our How Much Will Your Savings Be Worth? calculator).

If you’re in the workplace, sign up for your employer's retirement plan, and aim to contribute at least enough to qualify for any employer match. You can't afford to turn down free money. In 2010, you can contribute up to $16,500 to a 401(k) or another employer-based retirement account, or $22,000 if you’ll be 50 or older by year-end. And never cash out your company plan if you switch jobs.

Set up your own retirement account if you’re not covered at work -- or even if you’re a stay-at-home mom. For women, one of the great features of an IRA is that you can have one even if you don’t have a paying job, as long as your husband is employed. In 2010, he can contribute up to $5,000 of his compensation ($6,000 if you’re 50 or older) to an account for you, in addition to squirreling away $5,000 (or $6,000) in his own IRA. You can open either a traditional IRA or, if you meet income requirements, a Roth IRA (see Why You Need a Roth IRA)

Not only does this give stay-at-home mothers their own retirement stash that they can invest and control, but it also doubles the tax breaks and savings power available to you as a couple.

Buy plenty of life insurance. Once you have children, life insurance becomes a family priority because your kids would suffer financially if you weren’t around to provide for them. Women who are stay-at-home mothers and who are almost completely dependent on their husbands’ income are particularly vulnerable. But even working moms could be at a serious financial disadvantage if they were left to bring up a family alone.

As a rough rule of thumb, figure that insurance coverage should equal eight to ten times your total household income, including any coverage you have through your employer. (For a more precise estimate, use our insurance calculator.)

Although women are most often the ones who benefit from life insurance, don’t underestimate your own importance and value -- financial and otherwise -- in supporting your family. If you have a paying job outside the home, add together both your income and your spouse’s to figure your total need for coverage, and divide it proportionately between individual policies on each spouse.

To keep things both simple and inexpensive, buy term life insurance. You can buy several hundred thousand dollars’ worth of coverage for just a few hundred dollars per year. To price policies -- especially if you have medical issues -- go to AccuQuote (www.accuquote.com) or call 800-442-9899 begin_of_the_skype_highlighting 800-442-9899 end_of_the_skype_highlighting. It’s one of those financial tasks that will take you only 15 minutes (see Recipes for Quick Financial Fixes).

Recalculate your life-insurance needs at various points in your life. You may need more coverage, for example, if you have another child. On the other hand, once your children finish college and are less dependent on your income, you may need less insurance -- or none at all.

Write a will. In the absence of a will (intestate, in legal-speak), your state’s one-size-fits-all estate plan kicks in, and it may not be tailored to your needs or your children’s. For example, as the surviving spouse, you may get only a fraction of your husband’s assets, with the rest going to your children. If you and your spouse both die, the state decides who will raise your kids.

With a will, you call all these shots. You can divide your property just about any way you like and design creative trusts for your children that distribute money at specified ages, for example, or tie assets to specific purposes, such as paying for college. Review your will after the birth of each child.

Choose a guardian. Think of a will as a way to protect your most precious assets -- your children -- if something should happen to you and your husband while the kids are still minors.

Parents are often tempted to rely on informal guardianship arrangements -- “My sister has agreed to take care of our children if we aren’t around.” But an informal arrangement doesn’t have the legal standing of a formal guardianship.

And if both you and your husband should die without having formally named a guardian, the courts will decide who’s going to rear your kids. It’s possible that a judge could choose the one relative you wouldn’t want. Worse, a family battle could ensue, and the cost of a court fight would come out of your estate -- that is, your kids’ pockets. You can avoid all of these hassles by naming a guardian in your will.

Get your fair share. Just as important as setting up a will is reviewing the beneficiary designations on insurance policies, pension and profit-sharing plans, IRAs, 401(k)s, and other retirement plans. These assets go to whomever you’ve named as beneficiaries; they’re not covered by your will.

If you fail to update beneficiaries, you could find yourself in the position of Caroline, who was unexpectedly widowed at the age of 32. Before Caroline and her husband met, he had named his mother as the beneficiary of his retirement account and had never bothered to update the papers after he married. When he died, there was nothing Caroline could do to get access to that money for herself and her young daughter -- except depend upon the kindness of her mother-in-law. That’s yet another reason to take financial matters into your own hands.

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Filing for Bankruptcy? A Step-by-Step Guide

2010-04-30T09:35:00.001-04:00

If you are planning on filing for bankruptcy, there are a number of steps that you will need to complete. If you successfully complete the process, you will be able to take control of your debt situation or completely eliminate it. Here are the basics of how to file for bankruptcy.

The first thing that you will need to do is choose which type of bankruptcy that you plan on filing for. There are 2 main types of bankruptcy that most people use. These types are Chapter 7 and Chapter 13. Chapter 7 is known as the liquidation bankruptcy. With this type of bankruptcy, you will be able to discharge your debt so that you do not have to pay it any longer. With Chapter 13, you will be going through a reorganization and coming up with a plan to repay your debt.

Chapter 7 is the most sought after form of bankruptcy because it eliminates your debt. However, not everyone is eligible for it. You have to meet income requirements or pass a discretionary income test in order to qualify for Chapter 7. If you do not qualify for Chapter 7, you can file for Chapter 13 in most cases.

Hire a Lawyer

Although you could potentially file for bankruptcy on your own, hiring a lawyer will usually be the best decision. They can provide you with experience in the matter that you are lacking. They will help you fill out the necessary paperwork, meet the deadlines, and walk you through the entire process. They can also be beneficial when trying to decide which type of bankruptcy to file. You want to hire an attorney that specializes in bankruptcies instead of some other type of attorney for this process.

Documents

Once you have hired legal representation, you will need to go to the courthouse and get the appropriate documents. You will have to fill out a petition that says you are filing for bankruptcy. You will also have to gather your financial documents together that detail every aspect of your life. You will have to show how much income you make, how much debt you have, and what you have in the way of assets. You will have to detail all of this information on the appropriate bankruptcy forms with your court system.

Credit Counseling

Most states will require you to complete credit counseling before you are eligible to move forward with your bankruptcy. This will have to be done with a certified credit counseling agency. You will have to provide proof to the court system that you attended the counseling session.

Bankruptcy Trustee

With both types of bankruptcy you will have to work with a trustee. With Chapter 7, they will determine what assets you have and liquidate some of them to repay your creditors. With Chapter 13, the trustee will oversee your repayment plan.

Discharge

If you are using Chapter 7, the judge will then discharge your debt. This means that you no longer owe the debt that was discharged and creditors cannot attempt to collect it from you any longer.

Why Credit Cards Can Be So Devastating

2010-04-21T09:18:00.000-04:00

We are a society that runs largely on plastic. It’s easy. It’s convenient. And we don’t really have to watch the money leave our hands. And, if we are using credit cards, the money being used may not even be ours. Credit cards, when used irresponsibly, can have devastating effects on your finances:

Out of Sight, Out of Mind

One of the biggest issues is a mental issue. When using credit cards, it is easy to rack up the balances because you don’t actually see the money going anywhere. It’s really easy to spend a great deal in a short amount of time because you’re not pulling a dwindling pile of cash out of your pocket. Without really paying attention to what you are doing, you might find yourself spending more than you thought you would. (Indeed, studies show that those who use credit cards spend more on an average shopping trip than those who use cash.)

The fix: Pay attention to your spending. Just as your track money coming out of your checking account, you should track your credit card spending. Personal finance software can help you keep track, and financial applications on your smart phone can keep you up-to-the-minute. Consider what you spend on your credit cards as coming out of your checking account, and prepare to pay the balance of each month.

Carrying a Balance = High Interest Charges

Credit cards are so devastating because of their interest rates. When you pay interest, you are paying money directly into someone else’s pocket — all for the privilege of borrowing money. While credit card interest rates aren’t the highest out there (they are lower than pay day loan rates), they are still quite high. And, when interest is compounded daily, it means that every day that you have a balance means that you are charged a little more interest. That interest is added to your overall balance, and then interest is charged on your accrued interest as well as the principal. Soon, things get out of hand, and you find you have paid more in interest than you even borrowed in the first place.

The fix: Pay down your debt as soon as possible. Start with the highest interest credit card first, and put what you can toward paying that card down. If you use your credit card in the future (for rewards programs), make sure that you only spend what is in your budget. Pay off your card balance each month so that you aren’t charged interest.

Small Minimum Payments

It may seem like a great deal. You charge a large purchase on your credit card, and then you only have to pay around $25 a month for it. Score! Unfortunately, if you only pay the minimum payment, you could be paying that purchase off for the next 10 years; chances are that item will be long gone by the time you pay it off. On top of that, when you pay only the minimum payment, most of your payment actually goes toward your monthly interest charges. So the balance is reduced at a snail’s pace. By the time you pay off the card, making only minimum payments, you will have repaid three or four times the amount you originally borrowed.

The fix: Always pay more than the minimum payment. Pay off the entire balance each month if you can. It’s best if you just save up to buy large items, making sure that you can pay off the purchase right after you make it. If you decide you have to have it now, reconsider. If you can’t pay off an item in two months, you really probably can’t afford it.

The Debt Cycle

The combination of easy spending, high interest rates and low minimum payments makes credit cards so devastating to finances. It promotes a cycle of debt in which you spend years buying a few things on credit, carrying balances and paying them down slowly. Indeed, this combination is exactly what credit card issuers want: An army of consumers that are able to continue to make payments (comprised mostly of interest charges) without actually completely succumbing. It’s about encouraging consumers to live on the edge.

If you want to break the debt cycle, you have to get back to financial basics:

■Spend less than you earn.

■Create a spending plan or budget and stick to it.

■Say “no” to consumer items you can’t actually afford.

■Pay down debt.

■Save for the future.

Work toward moving beyond the debt cycle, and you will find that credit cards lose their power to devastate you financially.

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Bankruptcy Stats Take Center Stage in Health Care Reform Debate

2010-04-06T10:47:00.000-04:00

Statistics have long told us that a significant percentage of personal bankruptcy filings in the United States stemmed from medical problems. A 2001 study indicated that medical problems were a contributing factor in at least 46.2% of personal bankruptcies. By 2007 that number had climbed to 62.1%, and a separate study estimated about 70% in 2008.
The importance and validity of those figures has been hotly debated, but at last week's White House health care summit a significant fact bubbled to the surface: about 80% of those whose bankruptcy filings were triggered by medical bills actually had health insurance coverage. That news--which isn't really news at all but hasn't been the focus of much coverage in the past--shifts the scope of the problem somewhat.
The approximately 47 million uninsured Americans have been mentioned liberally, but this statistic tells us that those without insurance are not the only people adversely affected by our current health care system. In fact, many of those who believe the current system is working well for them may believe that only because they haven't faced the kind of catastrophic illness or injury that has forced their fellow insured Americans into bankruptcy.
Whatever the solution to America's health care crisis might be, this data is key to understanding the extent of the challenge.
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Chapter 13

2010-04-05T16:41:00.000-04:00

Background
A chapter 13 bankruptcy is also called a wage earners plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." (1) If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. §1322(d). During this time the law forbids creditors from starting or continuing collection efforts.

Advantages of Chapter 13
Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time. Another advantage of chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on "consumer debts." This provision may protect co-signers. Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.

Chapter 13 Eligibility
Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual's unsecured debts are less than $360,475 and secured debts are less than $1,081,400. 11 U.S.C. § 109(e). These amounts are adjusted periodically to reflect changes in the consumer price index. A corporation or partnership may not be a chapter 13 debtor. Id.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
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Bankruptcy

2010-03-25T15:26:00.000-04:00

Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far reaching. People who follow the bankruptcy rules receive a discharge — a court order that says they don’t have to repay certain debts. However, bankruptcy information (both the date of your filing and the later date of discharge) stay on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job. Still, bankruptcy is a legal procedure that offers a fresh start for people who have gotten into financial difficulty and can’t satisfy their debts.
There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court. As of April 2006, the filing fees run about $274 for Chapter 13 and $299 for Chapter 7. Attorney fees are additional and can vary.
Effective October 2005, Congress made sweeping changes to the bankruptcy laws. The net effect of these changes is to give consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7. Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts.
Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors. The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7. You now must wait 8 years after receiving a discharge in Chapter 7 before you can file again under that chapter. The Chapter 13 waiting period is much shorter and can be as little as two years between filings.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets, although exemption amounts vary by state. Note that personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or security lien on it.
Another major change to the bankruptcy laws involves certain hurdles that a consumer must clear before even filing for bankruptcy, no matter what the chapter. You must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter 7 bankruptcy case, you must satisfy a “means test.” This test requires you to confirm that your income does not exceed a certain amount. The amount varies by state and is publicized by the U.S. Trustee Program at www.usdoj.gov/ust.
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Five Most Common Questions

2010-03-22T10:52:00.000-04:00

WILL MY CREDITORS STOP HARASSING ME?
Yes, they will! By law, all actions against a debtor must cease once bankruptcy documents are filed. Creditors cannot initiate or continue any lawsuits, wage garnishees, or even telephone calls demanding payments. Secured creditors such as banks holding, for example, a lien on a car, will get the stay lifted if you cannot make payments.
WILL MY SPOUSE BE AFFECTED?
Your wife or husband will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If they have a supplemental credit card they are probably responsible for that debt.
However, In community property states, either spouse can contract for a debt without the other spouse's signature on anything, and still obligate the marital community. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouses’ signatures on contracts. But the day to day debts, such as credit cards, do NOT require both spouses to have signed.
Your bankruptcy lawyer will be able to guide you in this regard.
WHO WILL KNOW?
Chapter 7 filings are public records. However, under normal circumstances, no one will know you filed for Chapter 7. The Credit Bureaus will record your filing and it will remain on your credit record for 10 years.
WILL I EVER GET CREDIT AGAIN?
Yes! A number of banks now offer "secured" credit cards where a debtor puts up a certain amount of money (as little as $200) in an account at the bank to guarantee payment. Usually the credit limit is equal to the security given and is increased as the debtor proves his or her ability to pay the debt.
Two years after a discharge, debtors are eligible for mortgage loans on terms as good as those of others, with the same financial profile, who have not filed Chapter 7. The size of your down payment and the stability of your income will be much more important than the fact you filed chapter 7 in the past.
The fact you filed Chapter 7 or 13 stays on your credit report for 10 years. It becomes less significant the further in the past the filing is. The truth is, that you are probably a better credit risk after bankruptcy than before.
WHAT DOES IT COST?
It costs about $ 300 to file a Chapter 7 bankruptcy. A bankruptcy lawyer's fees vary but should be in the range of $ 1,000 to $ 2,000 . Many bankruptcy lawyers will give you a free initial consultation. You can keep the fees down by being well organized and well prepared. You may also be able to keep the fees down by not requiring the lawyer to attend the meeting of creditors with you. Check this with your lawyer. In some states such as Massachusetts, attorneys must attend the Section 341 meeting with the debtors otherwise attorneys are deemed to have NOT represented the debtors. (The 341 Meeting).
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Living with Bankruptcy

2010-03-19T09:31:00.003-04:00

When you file for bankruptcy with a credit/debt help agency, you will be asked a variety of important questions regarding your financial situation; specifically, on what your current budget looks like. Reputable agencies such as debthelper.com do this in order to A) Determine whether or not you actually do need to file for bankruptcy, and B) To figure out what your current financial priorities are and whether or not you will need to change them in order to get yourself out of debt.

Many areas that debt help agencies will advise you to focus and spend your money on should be common sense. Living necessities such as food, a place to live, electricity and water bills (basic utilities), and serviceable clothing should receive the greatest amount of attention. Other things such as owning a phone and making medical appointments are also stressed to varying degrees; if you need a phone for your job or a car for work, a debt help agency will give you advice on making a space for them in your budget.

These basic living expenses need to be considered by any person who is beginning the process of declaring bankruptcy, by anyone in debt, and by people who want to avoid being in debt. When you reach a debt settlement agreement and draw up a payment plan, it is necessary to know what your living expenses are. Most credit agencies will only ask you for a general estimate, but it is good to know what you will need to budget and keep making payments on in order to survive and/or work. Also, your lawyer and debt help agency will provide you with support and advice on the subject – it is their job to do so.

The following is a list of IRS approved living expenses taken from shepleylaw.com:

"Electricity

Trash

Sew/Water/Septic

Gas (Home)/Oil

Phone

Cell

Internet

Food/Groceries

[Basic]Cable

Dining Out [on rare occasions]

Work/School Lunch

Entertainment

Clothing

Health Insurance

Doctors Co-Pay

Medications

Medical Equipment

Dental Insurance

Dental Co-Pay

Veterinary

Clubs, Sports & Hobbies

Life Insurance

Car Insurance

Gasoline

Auto Expenses

Taxi/Parking/Public/Transportation Contribution

Child Support

Child Care

Tuition/School Fees

Business Expenses/Union Dues

Beauty/Barber/Nails/Dry Cleaning

Other (Holidays, Birthday, Cigarettes, etc.)"

While some of the items on this list (such as Beauty and Entertainment) should be done only very rarely, the list should give you a good idea of the areas where you should be spending your budgeted money. Living in debt is hard, frustrating, and difficult but it does not have to be the end. Draw up a list, get something done, and talk to a debt help professional. You might have more resources at your disposal than you thought.

Linked Sites:

Shepleylaw.com post on approved living expenses for people in bankruptcy: Linked Site

2009 IRS Medical and Dental Expenses PDF

2009 IRS Moving Expenses PDF

EBPA post on IRS Eligible Expenses PDF

Bankruptcy Law: What You Need To Know

2010-03-08T13:09:00.000-05:00

Until just a few years ago, filing for bankruptcy was fairly easy. Not anymore. When Congress changed the nation’s bankruptcy laws in 2005, many debtors found the new “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” to be more hindrance than help in overcoming past mistakes and starting anew.

The new law is stricter, featuring more requirements than ever before. It is important for anyone considering filing bankruptcy to understand the following:

Credit Counseling:
It doesn’t matter whether you file for Chapter 7 bankruptcy that discharges your debt or Chapter 13 bankruptcy which enters you into a repayment plan with creditors, anyone filing bankruptcy is required by law to attend credit counseling by a court-approved counseling service.

Chapter 7 Filings:
Under the new law, it is no longer your right to be allowed to file Chapter 7 bankruptcy. If, after proving your income the court determines that you make more than the medium income within your state, you may be required to file Chapter 13 bankruptcy instead and enter into a repayment schedule to pay back all (or most) of your creditors.

Chapter 13:
It is not uncommon to find your repayment schedule a bit more than you can financially handle under a Chapter 13 filing. The amounts you must repay each month are calculated according to specialized guidelines that take into account your income in the last year (not what you make now), and your assets.

Residency:
While everyone must obey federal bankruptcy laws, some states offer their own, more lenient exemptions. The new federal law, however, requires residents to live in a specific state for a specified amount of time (usually at least two years) in order to qualify for any state-exemptions.

Allowable Expenses:
In the past, those filing bankruptcy could virtually erase their debt and start new in seven years, while continuing to live the lifestyle they’d grown accustomed to. That’s no longer the case.

Under new federal bankruptcy laws, the IRS determines your monthly budget, and what you should be able to repay. Most are forbidden from having cell phone expenses as well as cable TV, high-speed Internet access, movies, meals out with the family, and anything else beyond the minimum allowable expenses as determined by the IRS and the courts.

Bankruptcy isn’t what it used to be, thanks to millions of Americans who abused the system in the past. Once reserved for people in dire financial situations to help them free themselves from excess debt and start fresh, today’s bankruptcy laws are designed t punish those who have been financially irresponsible and force them to pay back most or all of the debt they’ve accumulated. While filing for bankruptcy may have once seemed like a good way out of a bad situation, many consumers are now opting to try and fix their financial woes themselves in lieu of letting the government fix it for them.

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Can I Keep My Credit Card After Bankruptcy?

2010-02-22T15:29:00.000-05:00

Debtors filing bankruptcy often want to keep at least one credit card out of their bankruptcy filing. Their reasoning is that since it is almost impossible to survive in our society without a credit card, keeping one credit card out of bankruptcy would be helpful. However, when a debtor files bankruptcy they are required to include all of their debts in the bankruptcy filing. But they are allowed to “reaffirm” a debt after the bankruptcy filing. When a debtor reaffirms a debt, they are entering into a legally binding agreement that says that that particular debt will be permanently taken out of bankruptcy and that the debtor will repay the debt, adhere to the originals terms of the loan and continue to make payments as agreed. Many debtors reaffirm mortgage debt and car loan debt which are secured loans. They often reaffirm the secured loans in bankruptcy because it allows them to keep the secured property (house or car). However, is it a good idea to reaffirm credit card debt? In most cases it is not a good idea to reaffirm unsecured credit card debt during bankruptcy. Even if a debtor reaffirms credit card debt during bankruptcy, it is not guaranteed that the credit card account will remain open and available for the debtor’s use. A matter of fact, it is highly likely that the credit card account will remain closed and you will be required to repay the debt, plus any additional fees and interest accrued. For debtors filing bankruptcy, the best solution is probably to keep all of your credit card debt in bankruptcy and get a secured credit card after your bankruptcy has been discharged. A secured credit card will allow you to have the convenience of a credit card while rebuilding your credit record.

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Credit Card Laws Change this Month

2010-02-05T09:29:00.006-05:00

This is a heads up for people with credit cards. On the 22nd of this month (February) credit card laws will undergo major changes. Thanks to the Credit Card Act passed by Congress last year, credit card laws have been drastically changed. Credit card companies have been forced by the congressional act to change their lending practices and the manner in which they can charge fees, and the due date is the 22nd. Here are a few ways that you might be impacted by the Act.

The Good News:

Banks have lost some of their proverbial teeth. Thanks to the passage of the bill, credit card companies can no longer:

Charge interest on fees due

Limit the amount that banks can charge on specific fees (such as late fees and over limit fees)

If you get pre-approved by a company for a new credit card but you don't want to open a new account for it, you now have the ability to "reject the card" up until you activate the card

Banks must give you 45 days notice in advance if they want either raise the APR on your accounts

And more

The Bad News:

Credit Card Companies are trying to grow new teeth to replace the ones that they have lost. Companies are looking to charge new fees for their services to make up for any lost revenue. Here are a few known tricks that will soon be making an appearance:

Annual fees are on the rise

The interest rates placed on cards are expected to rise as card companies try to find new ways to make up for their lost revenue

Chase changed balance transfer fees from 3% interest to 5%

Bank of America instituted a great deal of changes, including the ability to raise the APR on future accounts if you miss a payment (go here for a more in-depth review of BoA's changes)

Keep A Watch Out:

The most important thing to get out of this is that you, the consumer, are now more protected than ever before. Banks now have to give you a heads up on policy changes, rate increases, etc... something that they did not have to do in all cases before. As long as you pay attention to your monthly statements released by your credit card companies and any email notification that you recieve from then, you should be well ahead of the curve. Good luck!

Three Reasons Why You Shouldn’t Get A Home Equity Loan To Avoid Bankruptcy

2010-02-03T09:44:00.000-05:00

When it comes to money troubles, friends and family are full of advice. One of the worse pieces of advice given to debtors considering bankruptcy is to get a home equity loan. That could be a big mistake. Here a few reasons why getting a home equity loan to avoid bankruptcy might not be the right move for you:

1.Typically, you can’t use debt to get out of debt. Anyone who has filed bankruptcy can attest to that truth. For most debtors considering bankruptcy, their financial troubles are caused by two problems, 1) lack of income and 2) too much debt. Getting a home equity loan would only worsen the second part that problem and move you closer to bankruptcy despite your best efforts.

2.Taking out a home equity loan could also be the first step towards foreclosure. This can be one of those situations where trying to avoid one situation puts you right into an even worse situation. Debtors who think they can avoid bankruptcy by taking out a home equity loan often find that they can’t pay back the loan or the mortgage and end up facing foreclosure and bankruptcy anyway.

3.Since a home equity loan is considered a secured debt, you won’t be able to discharge it in bankruptcy like credit card debt. A home equity loan works like your mortgage in that it is secured by your home. If you don’t pay the loan, they can foreclose. In bankruptcy, if you want to keep your home, you must pay the home equity loan and your mortgage. But fortunately, you do have the option to surrender the home in bankruptcy, which will release you from the obligation to repay the loan.

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Does My Wife Have To File Bankruptcy With Me If We Are Both On the Deed and Mortgage?

2010-01-27T10:43:00.000-05:00

by Peter Orville, Attorney at Law on January 21, 2010 ·

Even if you and your wife are both on the deed and mortgage it is permissible for only one to file for bankruptcy. This is true even if you are past due on your mortgage payments. If only one of you files a Chapter 13 bankruptcy, you will include the past due mortgage payments in the Chapter 13 plan to be paid by the Chapter 13 Trustee. As long as you continue to make the mortgage payments due after the bankruptcy is filed, no adverse action will be taken.

When a Chapter 13 bankruptcy is filed, an “automatic stay” is put in place. The automatic stay stops all action against you by creditors. A Chapter 13 bankruptcy also creates a “co-debtor stay”, which prohibits creditors from going after your wife for collection of the debt.

Before deciding whether to file a bankruptcy alone, or with your wife, you should contact an experienced, knowledgeable bankruptcy attorney to discuss your options.

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Can Bankruptcy Help Stop Repossession?

2010-01-19T18:27:00.000-05:00

Bankruptcy is designed to protect individuals or businesses that are unable to meet their financial obligations–and provide protection to involved creditors as well. While bankruptcy is a serious procedure and should only be considered if absolutely necessary, sometimes it is the best solution for those suffering severe financial hardship. And, for some, it may be the only solution.

One area that bankruptcy can be particularly helpful in alleviating financial hardship is by protecting property that may be in danger of repossession. This is when creditors take back goods that buyers are failing to make timely loan payments on. Some loans are secured–meaning the buyer has put down some form of collateral, often the item being purchased–while some are unsecured–typically credit cards. If you default on an unsecured loan, the only option creditors have when collection attempts have failed is to sue. But with a secured loan, creditors can repossess the collateral and sell it. Of course, if that doesn’t provide sufficient funds to wipe out the loan, they can then sue you for the remainder of the loan balance.
Bankruptcy can sometimes help cancel the debt, or even allow you to stop the repossession process. After filing a bankruptcy petition in bankruptcy court, all creditors are prevented from making any further collection attempts. This is also known as an “Automatic Stay”, which is an automatic order from the bankruptcy court issued upon the filing of a bankruptcy petition to all creditors. This applies to creditors attempting to repossess collateral such as automobiles.

If you file for chapter 7 bankruptcy in order to stop repossession, you’ll have to make arrangements with the creditor to bring all payments current after filing for bankruptcy. If you want to keep the car after bankruptcy, you’ll need to sign a reaffirmation agreement and make all payments after the bankruptcy.

In a chapter 13 bankruptcy, the repossession will be stopped and the debtor gains the chance to repay the value of the car to the creditor through the chapter 13 plan. Chapter 13 is beneficial to debtors owing more on a car than what it is worth, since chapter 13 payment plans can lower car payments on car loans where the debtor owes more than the car is worth.

If you’re thinking about filing for bankruptcy in order to stop repossession, you should seek out an experienced bankruptcy attorney in order to find out which option will work the best in your particular situation.

Source

Earthquake Relief for Haiti

2010-01-14T10:12:00.003-05:00

In an effort to help those who have been affected by the earthquake in Haiti, and their continuing tragedies, Credit Card Management Services, Inc. d.b.a Debthelper.com is now a collection center to help those in need.

Your gift will help distribute relief supplies to children and families impacted by the earthquake and aftershocks in Haiti.

Anything you are willing to provide will be greatly appreciated and invaluable to the families you will be helping. The immediate need is dry foods such as rice, beans; can foods, tents and army type cots, blankets and medical supplies.

Where: 4611 Okeechobee Blvd. Suite 114 WPB, FL 33417

Time: Mon – Fri: 9:00am – 8pm; Sat: 12:00pm – 5:00pm

Information: (561) 472-8000

Debthelper.com

Don't Get Scammed - Choose Your Credit Agency Wisely

2010-01-07T10:30:00.006-05:00

Scams are everywhere and a fast growing problem in the current recession is a con scheme involving the impersonation of debt consolidation, negotiation, and elimination agency. Such plans represent a last hope for many people to get out of debt; they are effective and time proven to help you get out of debt. And thanks to the rising levels of unemployment (over 10% in some states) more people are using them than ever before, and some of them have fallen victim to the scammers.

If you are in a situation where you are looking at these debt plans in order to free yourself from debt, here are a few tips/methods for spotting which are legitimate agencies and which ones are scams.

Talk To A Credit Counseling Agency:

Credit Counseling Agency's exist to help people in debt figure out the financial options that are best for them. Agencies base it on peoples specific problems and resources. They are often non-profit agencies, and their services are either free or provided when you pay a small fee ($75 is average). Different agencies can offer different services (such as reverse mortgages, debt consolidation plans, and more) which means that it is important to figure out which agency will be able to help you the most.

If you are in a situation where you are looking at debt plans and credit agencies in order to free yourself from debt, here are a few general tips/methods for figuring which are legitimate and which ones are scams.

If you are working with a lawyer or a paralegal concerning your debt, ask if they can refer a debt help agency. Most will either have lists containing reliable and certified credit agencies on hand or they will be able to find one for you fairly quickly.
States usually require credit agencies to be accredited and to have certified counselors in order to operate within specific states. Always ask an agency if this is true for them - while not all agencies have certified counselors the best ones usually do. Agencies with counselors who are certified by an outside group (one that you can research for yourself) often have websites and phone lines that you can research and call.
Understand what you are getting yourself into. If you feel confused at any point during your conversation with the agency, always ask them to go over the information again. Most agencies will be happy to do so and will give you as much time as you need to figure out the options being offered to you. However, agencies that offer their counselors a commission for each customer gained are less likely to do this than companies who offer their counselors a flat rate.
Make sure that you have been walked through the agencies entire privacy agreement. If an agency refuses to do so, or you do not feel that their privacy agreement is tough enough, then don't use that agency! Your financial information has to be protected, and if one agency can't do it then another one can.
Get things down in writing. Most legitimate credit agencies will offer written contracts, certificates, or other legally binding agreements. These written promises are in place to protect you; they often contain the name of the counselor who helped you and the entire agreement in physical writing. Make sure that you read through the agreement and that the writing is straightforward and simple. If it isn't or you find yourself confused by something on it, call the agency back and ask them to go over it with you. You can often get written agreements emailed to you by the agency in question.
Check for them with your states Better Business Bureau (BBB). If they are legitimate, then the BBB will be able to tell you how helpful they are and whether or not the BBB has received complaints about the agency.

Related Links:

New York Times Scam Article: Is a brief expose on scams targeting people who have been hit hard by the recession.
BBB1: Tips from the better business bureau on how to find a good credit counseling agency.
BBB2: An article detailing the difference between debt consolidation, debt negotiation and debt elimination plans.

Why People File for Bankruptcy

2009-12-23T10:27:00.007-05:00

If you're struggling with debt, you may sometimes find yourself wondering if you should file for bankruptcy. If you're like most people who wonder about doing this, then you don't - but why? Well, one reason that many people don't file for bankruptcy is because they don't know if they are in a position to do so.

There are actually many different reasons that people file for bankruptcy, most of which involve common sense like the loss of ones job or overwhelming medical bills - and not laziness. Other reasons may surprise you, with one being that you may actually be able to improve your credit score by doing so! In any case, if you feel like one of the reasons below could apply to you, you may want to consider filing for bankruptcy yourself.

Reason #1: Loss of a job

One of the most common causes for why people choose to go bankrupt is because of a job loss. It is hard to find a job in today's market, and if you are already struggling with debt, the loss of your job can come as a major blow. Not only will you lose the money provided by the job, but other things as well. This includes things such as medical benefits, insurance, bonuses (such as access to a company vehicle), or discounts which also came with the job.

Reason #2: Preventing repossession of properties

If you file for a Chapter 13 bankruptcy, you might be able to force creditors to return property (such as your car) back to you. Your past missed payments will be consolidated into your bankruptcy plan, and you will give monthly payments to the trustee of your bankruptcy plan, and who will in turn pay the finance company on your behalf.

It is important to remember that repossession of properties is only possible under a Chapter 13 bankruptcy and NOT a Chapter 7 bankruptcy.

Reason #3: Improving your credit score

There are actually some cases where filing for bankruptcy can help you improve your credit score. To use an example, it is possible for someone with a credit score of 450 to raise their credit score as high as 700 if they meet certain requirements.

This is because when you file for bankruptcy your score is determined based on how you well you do compared to other bankruptcy filers. In other words, your score is matched against people in similar situations as you, not against people with perfect credit scores and zero debt.

As long as you manage your bankruptcy plan well and manage to meet its minimum payment obligations, then it is possible to raise your credit score. Keep in mind, though, that you cannot raise your score to an 850 (or close to it) so long as you are registered as being bankrupt.

Also, if you file for bankruptcy when you have a high credit score (which is not advisable, because doing so would indicate that you have other options available to you) then doing so may in fact harm your credit score. It is also advisable consider other means of raising your credit score before filing for bankruptcy.

Reason #4: Stop home foreclosure and catch up on missed mortgage payments

Filing for Chapter 13 Bankruptcy will stop foreclosure before bidding or sales will occur. This gives you time to repay mortgage arrears or your remaining mortgage balance. It does not eliminate your property mortgage.

Reason #5: Put a halt to creditor harassment

It doesn't sound like a major reason, but if you're struggling with debt and receiving rude and harassing calls on a daily basis, the pressure can sometimes be too much. People can only deal with so much stress before something gives way. Sometimes the best option to get rid of the calls and the stress is to file for bankruptcy.

If you are in this situation please remember that if there are other options available to you, take them! Bankruptcy can get rid of the creditors, but don't file for it unless your debt, credit score, and overall financial situation seems hopeless and impossible to work off.

Reason #6: Medical bills

Medical expenses have caused many families to file for bankruptcy. Whether you are middle-class, low-class, or somewhere in-between, the cost of medical treatment is steep and scary. One of my own close friends is currently struggling to pay a bill that her insurance didn't cover, and she only had a doctor remove a piece of food that had gotten lodged in her throat.

If you're in a situation where you're being crushed by paying a medical bill off and your financial state is in ruins, then filing for Chapter 7 bankruptcy can help you to reduce or possibly even eliminate your medical bill.

Reason #7: A new start

After you have filed filed for bankruptcy and completed the payments that you are responsible for under it, some people have found that it gives them a fresh start. This is not to say that your slate gets wiped clean - you can have the fact that you filed for bankruptcy on your credit report for ten or more years.

However, you will be: out of debt, free of creditor harassment, and (hopefully) have a higher credit score than you did before you filed for bankruptcy. All of these things can help you to feel better about yourself, and provide you with a figurative goal or 'light at the end of the tunnel'.

At the end

Hopefully these reasons will help you should you be in the position where bankruptcy seems like a possibility. Remember though... Filing for bankruptcy should be your last resort. If you have any other option (such as cutting your budget) you should definitely take it.

Also, before you file for bankruptcy, you should consult with a credit counselor to determine whether or not it would be in your best interests.

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What If I Want To Sell My Home During Chapter 13 Bankruptcy?

2009-12-22T16:13:00.000-05:00

If you’re in Chapter 13 bankruptcy and you want to sell your home, there are few things you need to know before you proceed:

1.The bankruptcy court must approve the terms of the sale before a debtor closes on the property.

2.The debtor’s bankruptcy attorney must notify all of the creditors in the bankruptcy before the property is sold.

3.You and your bankruptcy attorney must disclose the details of the proposed sale to both the creditors and the bankruptcy court before you can proceed. Those details should include, the home’s sale price, proof of the property’s current value and the details of how the proceeds from the sale will be disbursed to the creditors. That takes us to our next point.

4.Your bankruptcy attorney must provide the bankruptcy trustee and creditors with a detailed account of all deductions made and profits earned from the sale of the home. All proceeds from the sale of your home during Chapter 13 bankruptcy become part of the bankruptcy estate and must be paid directly to the bankruptcy trustee. The bankruptcy trustee will then disburse the proceeds from the sale to the creditors.

It is possible that after selling your home in Chapter 13 bankruptcy you will not see any of the proceeds of the sale. The question then becomes, should you sell your home during Chapter 13 bankruptcy? Well, it depends. If it is your primary home and you can afford the payments it may not be a wise decision. However, if it is a second property that you are struggling to pay for, it may be wise to proceed. But before you sell any property, work with your bankruptcy attorney to create an effective plan. A matter of fact, you should create a plan with the help of your bankruptcy attorney before you file.

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What is Bankruptcy?

2009-12-22T12:11:00.006-05:00

While searching the internet and posting blogs, I realized that it has been awhile since this blog dealt with what bankruptcy actually is. To make sure that you are aware of whether or not you should pursue this option, here is some information that I have pulled from various sites (which are linked below) to help you out.

Two Types of Bankruptcy

While there are many types of bankruptcy, here are the two most commonly filed chapters (or types). For a full list of the requirements and your potential eligibility concerning bankruptcy, you can get a free consultation with a bankruptcy attorney, consultant, or a similar expert.

1) What is a chapter 7 bankruptcy? (a more thorough explanation can be found in our September 27th post)

"Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien."

2) What is chapter 13 bankruptcy?

"In a chapter 13 case you file a plan showing how you will pay off some of your past-due and current debts over a period of three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property, like your home or car, even if you are behind on payments or you have equity not covered by your exemptions. Your payments on these secured debts will generally be your regular monthly payments plus some extra amount if you need to get caught up because you are behind when you file."

Experts in this field can be found in your local area or through sites such as http://www.debthelper.com/.

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Experts Answer your Bankruptcy Questions

2009-12-16T10:02:00.002-05:00

The Dow may be over 10,000, but unease about the economy persists as unemployment hovers over 10%. To help ease some of your concerns, WalletPop is ready to answer your personal finance questions. Here's this month's sample:

Question: My wife and I are in debt that I no longer can tolerate. I am retired and have burned through my 401(k) and my annuity to pay the $6,000 a month in mostly credit cards and home mortgages.

What are my options? I don't think we qualify for Chapter 7 bankruptcy. What about Chapter 13, and what does that entail?? Do I need an attorney? How do I keep creditors from calling me day and night?

--Gary Anders

Answer from James Caher, co-author of Personal Bankruptcy Laws for Dummies

"Bankruptcy is definitely something you should look into, since it looks like you're sinking fast and probably wasting your retirement paying debts that you might be able to eliminate in bankruptcy. But there are many, many things to consider.

"I suspect that you may very well qualify for Chapter 7 (the one that does not involve a repayment plan of any kind), since you are living on retirement income. But this depends on whether your income exceeds the median income for your state, which is probably around $4,300/month before taxes. Social Security income does not count. Even if your income exceeds the median, you may qualify for Chapter 7, but you would have to pass the Means Test.

"You might not want to file a Chapter 7 if the equity in your home exceeds the allowable exemption in your state. For example, assume that your home is worth $200,000 with mortgages totaling $150,000, leaving $50,000 in equity (the difference between the value of the property and the mortgages). If your state allows a homestead exemption of $50,000 or more, you won't lose your home in a Chapter 7 -- provided you keep up with your mortgage payments.

But if your state allows, say, $15,000 for a homestead exemption, a Chapter 7 trustee could sell your home, pay off the mortgages, pay you $15,000 and pay the rest to creditors.

Chapter 13 is different. Property is not liquidated. Instead, folks pay what they can afford for the next 3-5 years, and remaining balances are wiped out. If you are behind on your mortgage, you can use Chapter 13 to catch up on back payments by stretching them out over 3-5 years while continuing to make regular payments going forward. Yes, you should consult with an experienced bankruptcy lawyer for advice tailored to your particular situation, but you can get a very good idea about your options from our book, Personal Bankruptcy Laws for Dummies.

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67 and Bankrupt: Are the Kids to Blame?

2009-12-14T10:14:00.000-05:00

Larry and Abby are in their late 60’s. They are broke, about to lose their home and there is nothing they can do about it.
But it didn’t have to be this way.

10 years ago, they had over $500,000 saved on top of the two rental units they inherited when Larry’s mother passed away. At the time, Abby owned a successful small business and had a comfortable income. Everything looked like peaches and cream.

So what happened?

Patrick happened.

Pat is their son. He borrowed money from his parents seven years ago to open his auto repair business. Pat was a great mechanic but a horrible business person.

Larry and Abby just wanted to help their boy. They convinced themselves that the money their were forking over was just a loan. They were sure Patrick would pay them back some day.

But as the days passed, the likelihood of seeing that money again grew smaller and smaller.

He slowly drove the business into the ground.

But each time he feel deeper into the hole, Larry and Abby were there to bail him out. They were sure that all Pat needed was a little more working capital.

Of course, this enabled Pat to amass even greater debt. Within three years he exhausted all his parent’s savings. They had to sell all the real estate they inherited and they refinanced their home as well. Even after going through all that, Pat was left with debts of over $300,000 including $150,000 to the IRS.

He was much too proud to close the business. He was determined to make it successful – even if it meant spending every last dime his parents had.

So was Patrick to blame for Abby and Larry’s financial destruction?

Not in my opinion.

Abby and Larry volunteered to become an ATM machine for Patrick. Nobody put a gun to their heads. But that wasn’t really the root problem.

You see, the reason they wrote blank checks to Pat was because they didn’t take the time to think about what impact their decisions would have on their own financial future.

They were very mindful about their spending – except when it came to supporting their kids.

Pat needed money.

They wrote him a check.

It was automatic – and it was ridiculous.

Abby and Larry put their heads in the sand. They didn’t pay attention to their own financial plan. In fact, they didn’t have one.

Sure they had assets and income. But even though their estate was worth over $2.5 million at the high point, it didn’t last long once they started writing checks for $50,000 every other month to keep their kid in business.
I know this is an extreme example. You might not be sending huge amounts to your children….but the amounts don’t matter. And it also doesn’t matter how your kids spend the money you give them. I don’t care if they use your money to open a successful business or go to Harvard. If you can’t afford it then you can’t afford it. Period.

How do you know you can afford the support you give to your kids? Have you ever said “no” to your kids when they asked for financial help? How did that impact your relationship?

If you are on the receiving end of this, do you have an obligation to your parents to discuss the ramifications of their support?

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Student Loan Debt — Dischargeable In Chapter 13 Bankruptcy?

2009-12-09T09:21:00.002-05:00

Anyone who has ever taken out a student loan is quite aware of the fact that student loan debt is next to impossible to discharge in bankruptcy unless the debtor can prove “undue hardship.” But the 9 th Circuit Court ruled in October that student loan debt could be discharged through the confirmation of a Chapter 13 plan if the creditor is given notice of the plan and does not object, (Espinosa v. United Student Aid Funds Inc., No. 06-16421, 9th Cir. 10/02/08).

The court stated:

“Our long-standing circuit law holds that student loan debts can be discharged by way of a Chapter 13 plan if the creditor does not object, after receiving notice of the proposed plan, Pardee, 193 F.3d at 1086, and that such notice is not constitutionally inadequate. In re Gregory, 705 F.2d at 1123. We find it highly unlikely that a creditor whose business it is to administer student loans will be misled by the customary bankruptcy procedures or somehow be bamboozled into giving up its rights by crafty student debtors. If the creditor fails to object, it is doubtless the result of a careful calculation that this course is the one most likely to yield repayment of at least a portion of the debt. In such circumstances, bankruptcy courts have no business standing in the way. Cases such as In re Webber and In re Patton are, to that extent, overruled.”

Although this ruling should not be considered an open door for all who want to discharge student loans in bankruptcy; it is a long overdue relief for debtors who are burdened by massive student loan debt. If the Chapter 13 bankruptcy trustee has examined the debtor’s ability to repay his/her student loan debt and has determined that the balance of the student loan should be discharged in Chapter 13 bankruptcy, then it is up to the creditor to accept or dispute the ruling. No special provisions should be given to student loan creditors who do not follow bankruptcy proceedings and challenge discharge rulings according to the law.

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Personal Finance 101: What Does FDIC Insurance Really Mean?

2009-12-08T09:27:00.000-05:00

One of the biggest things I encourage people to look for when they open a bank account is that the bank is FDIC insured. Most banks operating in the United States offer this insurance. In an era where people are more than a little worried about bank failures and the like, FDIC insurance is vital.

But what exactly is it?

Charlie writes in:

What exactly is FDIC insurance? How does it work? [A local bank] went under recently and seems to have been bought out by another bank and from what I understand the accounts are intact. Is that FDIC insurance at work?

(I edited out the bank in Charlie’s question for privacy reasons.)

What Is FDIC Insurance?

FDIC insurance refers to insurance policies created by the Federal Deposit Insurance Corporation, which is an organization wholly run by the government of the United States. The FDIC sells insurance policies to banks which insures the checking and savings accounts at those banks against the failure of those banks. Thus, when you open an account with a bank, that bank purchases insurance on that account for you from the FDIC.

FDIC insurance covers checking accounts, savings accounts, certificates of deposit, money market accounts, and cashier’s checks. It does not cover stocks, bonds, mutual funds, money market accounts, US treasuries, safe deposit box contents, or other such items.

Most banks that operate in the United States buy this insurance. When they do, they’re required to display the FDIC logo on signs in their business as well as on their websites.

FDIC insurance insures deposits up to $250,000 per depositor. This means that if your bank fails, the first $250,000 in your account is insured by the FDIC and will be returned to you in the event of a bank failure.

What Happens If My FDIC Insured Bank Goes Under?

If a bank that offers FDIC insurance becomes insolvent, the FDIC takes over that bank and all of the accounts held there. One of two things then happens.

In one type of takeover, called the “purchase and assumption” method, an already-existing bank takes over the accounts of that bank as well as some (or all) of the loans that bank has given out to customers. This purchase is usually done quickly. For you, the customer, this means that one morning, you’ll wake up and your bank account will be with a new bank. This is what happened when Wachovia failed and was taken over by Wells Fargo, for example.

In another type of takeover, called the “payout” method, the FDIC liquidates everything that’s left in the bank and then issues payouts for insured amounts to customers. So, if you have less than $250,000 in your accounts, you’d receive the full amount – if you had more, you’d just receive $250,000.

In either case, the process is really straightforward, usually involving minimal hassle from the customer. At most, you’ll simply need to open an account at a different bank (if your bank isn’t bought out or if you don’t like the new bank).

What If My Bank Doesn’t Have FDIC Insurance?

If your bank fails, you’re out of luck. You get nothing at all.

This is the reason why I encourage people to use banks that provide FDIC insurance. Luckily, almost all banks in the United States do offer it, but it’s worth checking just to make sure.

Source

FDIC Officially Goes Bankrupt

2009-12-01T09:05:00.000-05:00

From today's FDIC quarterly, there is final confirmation that the Deposit Insurance Fund is negative $8 billion.
by Jake Towne, the Champion of the Constitution

WASHINGTON, DC - Today the FDIC released its quarterly report, revealing that the Deposit Insurance Fund is bankrupt and now stands at negative $8.2 billion dollars. (page 13/26) Central planner and FDIC Chairwoman Sheila Bair has confirmed separately that future bank failures will be funded by the bailout fund allotted to the FDIC.

If you are new to the US banking scheme, you might question why banks and the FDIC are going bankrupt -- don't they HAVE all the money? The answer is they do not, banks in July 2008 had lent out about 99.4% of all the money they had on deposit. This is despite the rather insane truth that the Federal Reserve can create more money whenever it desires.

The FDIC had predicted its bankruptcy in a September letter. I had been following the FDIC closely for the past 18 months, but I finally threw my hands in the air after seeing how the report was rigged to keep the DIF fund positive in the Q2 2009 report, as I reported in "FDIC: 'We Aren't Bankrupt and Everything is A-OK.'"

However, the best friends of the FED banking cartel, the United States Congress, has a lot more nice surprises in store for America's working class. Politicians like to wave around one hand as they mess around with the other hand behind their backs, out of sight. While all the fury of the concerned is focused on the health care spend-and-tax bill, HR 3996, dubbed by yours truly as the "Automatic Bailout Bill" will grant the FED the ability to bailout any "individual, trust, or corporation" (section 1701) as well as impose a bureaucratic system of unneeded regulations.

Source: FDIC

Save Money Without Clipping Coupons

2009-11-25T10:55:00.000-05:00

There are plenty of articles about how to slash your holiday spending. Sure, you can clip coupons, make retailers play "match the markdown price" and spend your Thanksgiving evening loitering in some dark, damp parking lot guarding your place in line so you can snag those Black Friday door buster deals.

Alternately, you could try a more cerebral cost-cutting strategy. Here are five ways to psych yourself into saving money.

1. Sweat the big stuff

No need to drive around all day to find the best price on wrapping paper and snowglobe stocking stuffers (unless you're really sick of rewashing the dishes just to avoid the in-laws). Concentrate your cost-cutting first on high-dollar purchases -- big-ticket items where saving 20% puts some real cash back in your pocket. Then tackle the smaller stuff as time, energy, and sanity allows.

2. Do some retail recon before you shop

You won't know whether you're getting a real bargain or a dud deal unless you have some pricing history for comparison. Many stores don't include an item's original price in their advertising circulars. If the original markup was helium-high, even 50% off is hardly a "sale." Keep a folder for sales circulars on items of interest, so you aren't suckered into buying something that seems like a good deal until you get it home.

3. Don't fall for the upsell

Skip the extended warranty, which can pad the price of the item by 10% to 30%. With just a few exceptions -- such as treadmills and big-screen HDTVs -- warranties are rarely worth the extra price, according to Consumer Reports. If you feel the need to purchase extra protection, pay no more than 15% of the product's price, and buy the manufacturer's warranty, not the store's version. Same goes for all those extra doodads that are displayed near the only item that's actually on your list. It's called an "up-sell" for a reason -- it drives up your tab and the store's profit margins.

4. Shop with blinders on

Avoid last-minute upgrades by picking the must-have features and target price range for more complex goods such as electronics and small appliances. Studies show that the more choices shoppers are given, the more likely they are to trade up to a fancier (an unnecessary) model. So weigh the merits of each product independently. Compare like with like -- and erase from your mind the alternatives that don't fit your criteria.

5. Go on an all-cash diet

Yes, credit cards are convenient -- they offer purchase protection, rewards, an easy way to track your spending (albeit after the damage is done), and they take up less wallet room. But they're also too convenient. Studies show that people spend more -- and more impulsively -- when no actual cash changes hands. Plastic makes us devalue what we spend because we don't experience the immediate loss of buying power that we do when we pay with cash. (Why do you think they use poker chips and not actual currency in Vegas?) If you tend to overspend, leaving your credit cards at home during the holidays can be a serious boon to your bottom line.

Source: The Motley Fool

Florida is First in Foreclosures

2009-11-24T10:45:00.002-05:00

Sometimes, being in first place is not a badge of honor. Take Florida, for example, which currently holds the dubious distinction of being first in the nation in foreclosures.

The Palm Beach Post informs us that close to 1 out of every 5 homes loans in Florida was delinquent in payments by 90 days or more, or was somewhere in the process of foreclosure during this last quarter.

The state has almost 3.5 million outstanding loans, and more than 13% are in trouble. This type of economic behavior does not bode well for a recovery. It also indicates that another large group of foreclosed homes is about to crash into the real estate market with a resounding thud.

This somewhat alarming foreclosure statistic is not being helped by Florida’s other problem, an 11.2% unemployment rate. Experts do not expect employment to alleviate before the second quarter of next year, by which time it will have risen, according to projections, to 11.4%.

While Florida’s foreclosure figures seem high, the reality is, according to the Mortgage Banker’s Association, that 1 out of every 7 loans across the nation is in foreclosure. This is an increase from the 1 out of 10 that began the year.

Florida foreclosure rate is closely followed by Nevada, California, and Arizona. These four states are responsible for 43% of the new crop of foreclosures that is due to hit the market.

In addition, foreclosure filings in October of 2009 showed an 11% increase over those from a year earlier, and are up more than 25% on a year to date basis. According to the Boston Globe, it is not subprime loans that are spurring the foreclosure increase; instead, it is rampant unemployment, which stands at a 26 year high nationally.

Nationwide, the rate of joblessness has moved beyond 10% and expected to rise above 11% before it turns around sometime next year.

What is extremely alarming is a report from the Mortgage Banker’s Association that fixed-rate home loans, which were often made to people with excellent credit, are also falling victim to foreclosure. These formerly credit-worthy individuals are succumbing to unemployment. When faced with a choice of feeding a family or paying a mortgage, food always wins out.

What may be even more disturbing is that the Federal Housing Administration (FHA), which has been holding the housing market together by insuring more than 40% of new home loans, reports that more than 18% of those who hold FHA loans are delinquent by at least 1 payment.

Source: huliq.com

Debt Relief Grants To Clear Credit Card Debts

2009-11-20T09:56:00.000-05:00

By: Walter Sigmore
Debts are dreaded by almost everyone. No matter how confidently one promises to himself about using the credit card only when the need arises, all the users end up being guilty for having made purchases that are well beyond their budget. This in turn directs them to huge debts, which necessarily means headache. Debt relief grants can come to your rescue now. With these grants, it is easier to get rid of your debts and lead a peaceful life.

These debt grants can be utilized for your educational purposes, health care, to clear your household or store debts, etc. The good thing about such grants is that the rate of interest is relatively low and repayable by any person with not so good financial status. These financial grants are issued by debt consolidation companies and also nonprofit organizations. The nonprofit companies provide relief to people who are in critical financial crisis and can hardly find any means to get out of the same.

Credit counseling should be the first step that any person who is fully submerged in debts should look forward to. This will help him analyze the various options left and which one suits him the best so that he can comfortably get out of the debts. Normally, a person who has huge debts to clear will be in a confused state. Hence, it is necessary to submit to a credit counselor.

Before you can attend these sessions, you are required to collect all your credit bills and other debt bills. When you carry these to the credit counselor, he will analyze your financial status and with his experience, will provide you with all the possible scenarios. A good counselor will strive hard to lead you towards personal freedom and helps in stabilizing your future.

There are umpteen credit consolidators in the market today. While most of them genuinely struggle to help you out, there are scams too. You should conduct a brief research on which company has been successful in helping the debtors to restore their life like before.

You can compare the success rates of the various companies and zero-in on the best company that can help you out. You can try looking for nonprofit companies that offer debt relief grants for people who are in terrible crisis. If your condition is really poor, then you can benefit from such grants. Start today with ending your bad debt.

Source: Article Snatch

How to Set Up an Emergency Fund

2009-11-19T10:28:00.000-05:00

“Most financial advisers recommend building up emergency savings equivalent to three to six months’ worth of living expenses… however, some recommend a fund to cover eight months’ living expenses.”
Emergency Fund?

Respondents (n=122) in Wi$eUp’s latest online poll have…

42% – NO emergency fund

26% – less than 1 month’s savings on hand

15% – 1-2 months’ savings on hand

7% – 3-4 months’ savings on hand

3% – 5-6 months’ savings on hand

7% – more than 6 months’ savings on hand

(http://wiseupwomen.tamu.edu/03-resource-center/polls.php)

The Wi$eUp poll results highlighted above illustrates a challenging reality for many families – NO or very limited emergency savings. Polls and studies reported in the media frequently talk about people being “a paycheck away from financial disaster.” Is it possible to be proactive and establish an emergency fund even during tough economic times? The answer is, yes, if you are able to make it a financial priority. That may not be easy when money is tight, but it is important.

Just what is an emergency fund? Your emergency fund is a reserve of money intended to cover basic living expenses IF you experience a financial emergency, such as losing your job or other sources of income, or having an unanticipated, catastrophic expense (perhaps a medical expense or a major household expense).

Here’s how to start an emergency fund…

• First, do the math. What are your “bare bones” monthly living expenses? That is, what is the least amount of money you would need to cover the very basics and not fall behind with your monthly bills? This amount is
generally less than what you actually spend on a monthly basis.

• Once you know the monthly fi gure, multiply it by three, six, or eight – whatever is your goal for how many months’ worth of living expenses you want to build up.

• Next, determine how much you can save regularly on a monthly basis.

• Then decide how long it will take you to build up your emergency fund. Remember, you do not have to fully fund your emergency fund overnight!

Example:

• “Bare bones” monthly living expenses = $2,100
• Emergency fund goal (3x, 6x, or 8x) = 8x
• Total amount needed to fund it = $16,800 (8 x $2,100)
• What I (we) can aff ord each month = $300
• How long it will take to build it up = 56 months
($16,800 divided by $300)
• In the example, 56 months may seem like a long time, but remember the money can be accessed for emergencies if needed during this time. And you can always alter your goal.

• Designate a special savings account to hold your emergency fund. Select an account that will accrue interest or earnings and is liquid (accessible when needed without penalty), but don’t make it so easy that you will “raid” the fund every time you need a litt le “extra.”

• For more information on emergency funds and set-aside accounts, check out

Chapter 5 – Savings Basics at Wiseupwomen.org

The Importance Of Finding A First-class Bankruptcy Attorney

2009-11-12T12:12:00.000-05:00

Bankruptcy. It’s not a decision anyone comes to lightly. For most people it is, as it ought to be, a last resort, chosen only after other options have been exhausted. Before you even get to point of considering bankruptcy, you’ve probably already been through disappointment, discouragement, worry, and many gut-wrenching bill paying sessions.

Don’t compound your troubles by trying to make decisions about bankruptcy without good expert advice. A reputable Phoenix bankruptcy attorney can review your situation and will honestly let you know whether or not bankruptcy is the best option and if you are likely to qualify. If you are unsure where to begin finding an attorney, you can check with the Maricopa County Bar Association. Their referral service can help you find a competent and reliable Phoenix bankruptcy lawyer. A creditable lawyer will charge you a nominal fee for an initial consultation, at which point you can determine if this is the right person to help you move forward with your bankruptcy filing.

Good advice can help you determine the best way to manage your debt and get your life back on track. It will take time, but eventually your can regain a good credit standing as well, certainly faster than if you continue to miss payments or try to borrow more and more to catch up to your debt obligations. Your bankruptcy lawyer will assess your state of affairs and let you know which form of bankruptcy is the better option: Chapter 7 or Chapter 13. These labels refer to the federal codes regulating bankruptcy, and your personal circumstances, including type of debt and assets you may want to protect, will determine the better choice.

Many people will not even have an option, as you must meet the standards of a means test to qualify for a Phoenix Chapter 7 bankruptcy. Congress passed a sweeping new bankruptcy law in 2005, making it more difficult for people to qualify, and file, for bankruptcy.

The reasoning behind the new bankruptcy regulations was that too many people were carelessly piling on debt and using bankruptcy to get out of their obligations. If you find yourself facing this incredibly difficult decision, you probably think that any member of Congress ought to try walking in your shoes for a while. They might become aware that injury, illness or job loss does not constitute carelessness. When you find yourself in this challenging position, don’t tough it out alone. Find yourself a good Phoenix bankruptcy lawyer to help you guide you through to the light at the end of the tunnel.

Source: Lawyers-Law.com

Home Affordable Modification Program

2009-11-09T09:47:00.000-05:00

In March 2009, the US government declared an initiative that was set into motion so as to aid homeowners to keep their homes and put off the threat of foreclosure. This program gives each homeowner in financial duress a glimmer of light in an area that seemed so dark and it is called the Home Affordable Modification Plan.

President Obama put this plan into effect this year in order to pull people out of possible financial disaster and keep the economy ticking along. The majority of homeowners who have a mortgage could possibly be eligible and monthly payments will be largely lowered to a point where their mortgage payment fits into their budget.

This fantastic initiative has shown to be a massive break for those homeowners who have come close to losing their house and the government has permitted thousands of dollars to help give both the consumer and the economy a large helping hand.

Who is eligible for this initiative?

Because of the giant number of homeowner's and the fact that the majority of lenders are not suitably staffed, now is the time to jump in and attain help in paying down your mortgage. It will assist you to avert foreclosure and the credit issues that will haunt you for the next umpteen years. There are guidelines put into place that will allow you know if you qualify for the home affordable modification plan.

The main qualification is that you received your current mortgage before the beginning of 2009.

It is imperative that your home be both owner occupied and your primary residence or you will not be entitled. To qualify, the property cannot be an investment and the house cannot be left sitting empty under the terms of this plan. The basics are that the house be your current residence. You will have to document proof of residency with some sort of bill with your name and address on it during the application process.

How much money you make monthly needs to fall into a particular area and guidelines. Talk to a professional ahead of you continuing the process.

Throught the application process, there will be numerous factors being evaluated with your income, expenses and assets being one of the largest parts. Don't rush things and take care to include everything you own that has any true value. If you don't disclose anything you could lead to future problems and keep you from qualifying for this program or government assistance in later years.

Additionally an important point that needs to be made is about those who are currently in the middle of a bankruptcy suit. Don't automatically think that this fact will completely rul you out from this modification scheme. Simply ensure that you are truthful with regards to all that your lawsuit entails at the time of your application.

The initiative will come to an end by December 2012, however all payments will keep going for numerous months after the finish.

The Treasury Department has provided a cash incentive to those who apply early for this plan and make timely monthly mortgage payments. This is a way to encourage people to sign up and the government hopes this will reach everyone that is entitled.

The Home Affordable Modification Plan has been created to make fantastic steps in assisting folks to lower their mortgage payments and put off foreclosure. In the state of our current economy it has taken the burden off many homeowners' shoulders. Now numerous individuals might have a long future with the home they worked so hard for.

Source: CMLC Mortgage

Avoid Bankruptcy Double Jeopardy

2009-11-03T10:02:00.000-05:00

Our guest author for this post is Morlino and Lathea Morris on How to Avoid Bankruptcy Double Jeopardy

As more people remain unemployed and layoffs continue, more and more consumers are finding themselves unable to pay their bills and forced to file Chapter 7 bankruptcy. Although you expect your credit score to take a hit when you file bankruptcy, you shouldn’t be penalized twice. But many consumers who have filed bankruptcy and anxiously applied for financing soon after their bankruptcy is discharged, are shocked to learn they have been denied only because the credit bureaus have failed to do their job. Credit bureaus sometimes don’t update consumer credit reports to show debts that are included in the bankruptcy. A court ruling requires the three credit bureaus - Experian, Equifax and TransUnion to report all debts that are discharged through Chapter 7 bankruptcy to be listed as such on consumer credit reports. Delinquent debts that were discharged through bankruptcy that still appear on your credit report not updated will negatively impact your credit score. Why? These debts will be looked upon as current debts and will appear to a potential lender that you still owe these debts.

A customer who has been using our Complete Credit Management Toolkit to smartly manage his credit after filing Chapter 7 bankruptcy, unfortunately, missed a very important follow-up step. He spent a period of time getting his family finances in order and remaining debt free. But it wasn’t until his mortgage application was denied, that he realized he had failed to take a very important step. Had he reviewed his credit reports after his bankruptcy was discharged, he would have discovered credit cards debts that had been included in the bankruptcy were being inaccurately reported on his credit reports. So despite the fact in reality he was debt free, to the mortgage lender he was carrying more debt than he could afford, and he was delinquent on these accounts as well. The lesson here is this, if you see a bankruptcy in your future, remember, once your bankruptcy is discharged, your job is to follow-up with the credit bureaus to make sure they have done their job. Unresolved errors will negatively impact your credit worthiness. Here are some Smart Credit Moves:

1. Request a copy of all three of your credit reports from the three major credit reporting agencies, TransUnion, Equifax and Experian. You can get them free online at www.annulacreditreport.com or call 877-322-8228.

2. Examine your reports carefully for errors. Pay particular attention to any accounts that were discharged as part of a bankruptcy. Any civil judgments discharged in a bankruptcy should be reported as discharged or included in bankruptcy and show a zero balance. Any other accounts discharged in bankruptcy should be reported as discharged or included in bankruptcy and show a zero balance versus showing charge-off or any other reporting.

3. Report to the credit bureaus any errors uncovered. Send them a copy of the credit report with the errors high-lighted, include any supporting documents from the bankruptcy court.

During these economic times, it’s more important than ever for consumers to review their credit reports for inaccuracies that could cause their credit score to plummet -and interest rates and insurance premiums to spike! It is your responsibility to make certain credit bureaus are doing their job. Be Proactive!

Source: Rosie's Boomer Review

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

2009-10-29T09:38:00.000-04:00

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

2009-10-26T08:36:00.001-04:00

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

2009-10-21T09:40:00.000-04:00

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

2009-10-13T09:15:00.000-04:00

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?

2009-10-12T09:37:00.001-04:00

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

2009-10-07T15:36:00.000-04:00

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

2009-10-06T11:17:00.001-04:00

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!

2009-10-01T09:36:00.001-04:00

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

Bankruptcy 101 - From What It Is To What Happens At Court

2009-09-28T10:15:00.003-04:00

CHAPTER 7 BANKRUPTCY
By Martin Hoffman*

FINAL THOUGHTS UP FRONT

The purpose of the Bankruptcy Law is to give an honest debtor a "fresh start" in life by relieving the debtor of most debts. Often, clients wait too long to consult an attorney and waste exempt assets such as pensions, or mortgage their property in a futile attempt to avoid Bankruptcy. Many attorneys offer free consultations; the reader is encouraged to obtain a comprehensive consultation concerning your rights and remedies.

HOW DID YOU GET INTO THIS POSITION

The most common causes of bankruptcy include medical expenses, loss of a job, accidents/disability, business failure, divorce, and the current foreclosure crisis.

Consumer and commercial bankruptcy filings are on pace to reach 1.5 million or more this year. You are not alone.

WHAT IS BANKRUPTCY

Bankruptcy is the judicial process that allows debtors to discharge (eliminate) or reorganize debt. In many cases, you can discharge all or most of your debt and still keep all or most of your assets.

Bankruptcy cases are handled by the United States Bankruptcy Courts, part of the Federal Court system.

This essay will concentrate on Chapter 7 or ‘liquidating bankruptcies’.
In a Chapter 7 Bankruptcy, the Debtors will discharge all debts permitted to be discharged and keep all exempt property (see below). In a Chapter 13 Bankruptcy, a debtor may reorganize his debt and pay all or a portion of the debt over a period of three to five years.

EXEMPT PROPERTY

Even though you are filing for Bankruptcy, the Law allows you to keep certain assets free from the claims of your creditors. The assets that you are allowed to keep are considered exempt property. The exemptions available to you are decided by Federal Law and/or by the law of your state of residence. Usually, you can keep your home, pension plans, several thousand dollars worth of personal property (such as cars, furniture, bank accounts, jewelry, etc.), many types of insurance benefits, alimony and child support. Often, the exemptions are sufficient to protect all of your property, and nothing will be lost in the bankruptcy proceeding.

DISCHARGEABLE DEBTS

Not all debts are dischargeable in bankruptcy. You will not be able to discharge most tax debts, child support or alimony, most student loans, or to prevent a secured creditor (e.g., home loan, car loan) from foreclosing/repossessing the property that secures the debt. You may, however, be able to reaffirm the debt, which means that you can agree to pay the secured debt despite the bankruptcy in order to keep the secured property.

BEFORE YOU FILE

Your lawyer will ask you to provide certain documents in order to process your case. These ordinarily include a copy of your latest tax return, copies of deeds, mortgages, titles to vehicles, and a copy of your driver’s license and social security card. At some point, before filing a petition, you will also have to produce up to one year of your bank statements and 60 days worth of pay stubs or other verification of your income.

The Bankruptcy law requires you to take credit counseling (education) before you can file for Bankruptcy. This is often done through the Internet, and takes approximately one hour. After filing for Bankruptcy, there is a second, shorter counseling session that is required. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program are permitted to provide counseling.

THE MEANS TEST: ARE YOU ELIGIBLE TO FILE

A ‘means test’ is required under the current law to determine your eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. The test is only applicable to consumer debt; if your debt is primarily business debt, you may not have to pass this test.

The means test is performed by comparing your average income for the past six months (CMI-current monthly income) to the median (average) income for households of the same size in the your State of residence. If your income is less than or equal to the state median income, you "pass" the means test and may file Chapter 7. If your income exceeds the median income, there are additional calculations and deductions that may allow eligibility.

FILING FOR BANKRUPTCY

The filing of a Petition begins the Bankruptcy case. The Petition is a document that sets out (1) what you own, (2) the amount and to whom you owe the debt, and (3) requests Bankruptcy protection and relief. Once the Petition is filed an automatic stay goes into effect- this means that no creditor can take further action against you. All collection efforts, including phone calls and lawsuits such as foreclosures and garnishments (levying on the debtor’s wages) are brought to an immediate halt. A husband and wife ordinarily file a Joint Petition.

THE BANKRUPTCY HEARING

Several weeks after your Bankruptcy petition is filed, you will attend a hearing in the Bankruptcy Court called a 341 hearing (or First Meeting of Creditors). A court appointed official called a ‘Trustee’ conducts the hearing. The hearing itself usually takes only a few moments unless the Trustee finds something unusual or incomplete in your Petition or accompanying documents.

If the value of your property is greater than your available exemptions, the property will be sold and the difference will be distributed to your creditors. You can also elect to pay the difference and keep the property.

The Trustee can try to have your case dismissed if there is evidence of fraud, perjury, or ineligibility.

BANKRUPTCY DISCHARGE

Unless there is litigation involving objections to the discharge, the debtor will usually automatically receive a discharge. The Clerk of the Bankruptcy Court will mail a copy of the order of discharge to all creditors, the U.S. trustee, the trustee in the case, and the trustee's attorney, if any. The debtor and the debtor's attorney also receive copies of the discharge order. Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court.

This essay is intended to make you more informed about your rights and the Law of Bankruptcy and is not a substitute for competent legal advice. Please consult a licensed attorney in your jurisdiction regarding your specific case.

*Martin Hoffman is an attorney licensed to practice in Florida and New York. He is a senior partner at Hoffman, Larin and Agnetti PA, with offices in Miami, Fort Lauderdale, Islamorada and Key West. Mr. Hoffman can be reached at mhoffman@hlalaw.com or at 800-803-5555.

Medical Expenses A Common Cause Of Bankruptcy

2009-09-25T09:33:00.002-04:00

September 25, 2009 in Healthcare

The following guest post was submitted by Kevin, web content writer for Resqdebt.com. For more helpful tips on how to save money and stay out of debt, visit Resqdebt’s website at www.resqdebt.com.

When Americans think of a person trapped in enormous amounts of debt, inevitably they think of irresponsibility. They think of fast cars and fancy stereo equipment. They think of people living the high life who could not afford it. In short, they think of a deadbeat. If statistics are any real measure, this impression could merit a change – and a touch of sympathy.

Far from financial irresponsibility, medical expenses are among the most frequent causes of families falling into debt and eventually filing for bankruptcy. The precise percentage of medical bankruptcies is in dispute. However, it is generally acknowledged to be a significant number.

Estimates for the number of “medical bankruptcies” have a wide range. A Northwestern University researcher has placed the figure at 17 percent of all bankruptcies. A group of Harvard researchers have recently increased their estimate to more than 50 percent. According to a Federal Reserve report, households with high medical debt are 28 times as likely to file for bankruptcy as other households. Most recently, an August report from the UCLA Center for Health Policy Research estimated that one in seven Californians carries some form of medical debt. With the nation gripped in a discussion about public financing of medical care, the number of medical bankruptcies has become a topic of note.

Medical bankruptcy can arise in several ways. The most common and obvious is the medical bill charged to the ill patient. When the patient personally suffers a chronic disease, deals with a condition that requires expensive treatment, or must pay for pricey medication, then it can be easy to run up thousands of dollars in costs. Insurance can help, but sometimes is not enough. However, there are other ways that medical expenses can drive a person or family into debt.

Many times the medical benefit is not for medical procedures performed on the person himself. They stem from helping to finance the medical care of a loved one. Sometimes this means caring for an elderly father or mother. Sometimes, tragically, this means caring for a sick child.

Also, some researchers describe “hidden costs” of medical bankruptcy. Often, these expenses consist of medical expenses placed on credit cards or paid on credit in some other way. This is an unwise thing to do. Once the expenses are placed onto the credit card, they become a target for interest and fees.

While medical expenses drive many people to bankruptcy, that is not the only option for handling overwhelming medical debt. Other options exist that can help a debtor take care of their debt before reaching that point. Among these methods are credit counseling, debt consolidation, and debt settlement. Each method can help debtors resolve debt and rebuild their financial health.

“Medical expenses are a common reason that people come to us,” said Heath Tudor, community liaison for Resqdebt, a debt settlement provider in Allen, Texas. “The unfortunate thing is that it randomly strikes good people. The fortunate thing is that it gives us the opportunity to help good people.”

Source: Frugal Dad

6 (scary) Fast Cash Loan Types and 3 (better) Alternatives

2009-09-24T10:31:00.004-04:00

If you’re hoping to get a personal loan, be wary of where you look!

You’ve got limited options when you have bad credit and are in a financial bind. While a lot of people may not have much sympathy for consumers who have fallen into this trap, I can see just how easy it is to get in this position. What if you just don’t make enough money? What if you work a menial job and end up with a chronic illness? A lot of people are one accident or health problem away from going broke. And I’m talking about the responsible ones!

I can sympathize with this predicament because I live in a state that has a very high cost of living (trickle up effect, thanks to the uber-wealthy around here), but most of us are still regular workers of regular means, trying to get by. Teachers, for example, aren’t paid the mega bucks to easily afford a $2,400 monthly rent on a small home.

I can therefore understand (not condone) just how borrowing money often seems to be the only way when you’re confronted with unanticipated expenses. So I was hoping to offer this article as a way to warn consumers of certain loans that the New York State Office of Financial Empowerment considers “dangerous”. I’ve added a sixth based on my personal experience. With overpriced loans, you can wind up in deep debt.

Fast Cash Loans: The Costs Aren’t Worth It
1. Tax Refund Anticipation Loans
When you just can’t wait to get your tax refund back from the government, you might be tempted into a Refund Anticipation Loan (RAL). These high interest loans are offered by tax preparers based on your anticipated tax refund. Typically you wind up spending around 10 percent of your expected refund on interest and fees. The check only takes two weeks to arrive which equals 300 percent annual interest on an RAL. Patience is a virtue that will help you avoid costly RALs and make the most of your tax refund money.

2. Pawnshop Loans
Expensive electronics, musical instruments, guns or jewelry are often used as collateral to obtain pawnshop loans. The loan you’ll get from a pawnshop is usually less than half the pawned item’s resale value. When you pawn something, you get a few months to repay the loan; if you fail to pay up, the pawnshop is allowed to keep and sell the property. You’ll be paying dearly for the privilege of receiving that quick cash, as pawnshops will charge you interest, storage costs and insurance fees. Once again, many borrowers wind up paying about 300 percent interest on pawnshop loans. If you can’t come up with enough cash, you’ll spend significantly on storage fees or wind up losing a treasured item. I actually know a few people who own pawnshops, and they are some of the wealthiest people in their town — it’s clear why!

3. Rent To Own Loans
Specialized shops offer you the opportunity to rent electronics, furniture and appliances until you own them. If you miss a payment on rent-to-own goods, the store can repossess the items. Here’s what’s crazy about this: even if you’ve paid more than market value, you can lose what you paid out along with the merchandise! Research reveals the sad fact that around 75 percent of rent-to-own customers actually lose their cash and goods when they are unable to make the payments. Now if you’re actually in the minority and you get to keep the stuff, the news isn’t any better: even if you pay off the goods and own them, you are likely to pay double or even triple the market value for rent-to-own items. Either way, renting to own is a waste of money. So why do people do this? Because they are unable to delay gratification.

4. Cash Advances On Your Credit Cards
You have a credit card so you have access to cash, right? Well, you may think twice about gaining access to that cash when you consider what it will cost you. When you take a cash advance on your credit card, the interest rates charged are higher. Typically, a cash advance fee is also charged, which amounts to an additional percentage of your balance. The scary part? Interest paid for cash advances often exceeds 20 to 25 percent. That’s a lot to pay for a little cash!

5. Overdraft Protection Loans
Some banks may offer you overdraft protection for your checking account, which is nothing but a loan that lets you draw money from an account with a zero balance. The bad news is that average overdraft fees are anywhere from $25 to $40. If you’re set on wanting to make sure you don’t overdraw your account and you want to have a “safety net” in place, then another possible alternative is to have your checking account use your savings balance to cover overdrafts. While there is usually a fee for this as well, it’s usually much less than the cost of an overdraft.

6. Payday Loans
To get a payday loan, you apply for one with a lender, showing them proof that you can pay. After signing a loan agreement, you send the lender a postdated check which they hang on to while they hand off the cash to you. After the length of the loan’s term (which is very short, usually a couple of weeks), the lender will cash your check, which will include the amount you owe plus interest and fees. Now if you know you’re going to have trouble paying for this on time, you can “roll over” the loan and file for an extension, which will trigger an additional fee. The interest charged on payday loans is often 300 percent or more, making them a poor choice when you’re already short on cash.

Alternatives To Bad Loans and Quick Cash
All this sounds scary enough for you? There are better approaches to digging yourself out of a tough financial hole, including:

1. Find the lowest cost loans available. Try low interest credit cards, balance transfer credit cards or even a lending network like Lending Club (you can check here for more details about Lending Club, but you need to have good credit to qualify). If you absolutely need access to cash and must take out a loan, find the cheapest loans that you can qualify for.

2. Simultaneously, cut down on spending and go on a strict budget. Admittedly, this may not be an easy solution, but this is the most prudent way to free up or obtain some liquidity without it costing you an arm and a leg. While implementing belt tightening strategies, you could also concurrently pursue additional income opportunities. Finding other ways to make money is my favorite approach to solving this problem.

3. Still insist on getting a quick loan? Then pay it off fast! Now if you’re going to go for the easy cash anyway, make sure you know what it costs you, and try to pay it off as quickly as possible. But you’ve been warned!

Source: The Digerati Life

Considering Bankruptcy? These guys can help...

2009-09-23T11:27:00.006-04:00

Clark & Washington, P.C., Georgia Bankruptcy Law Firm

Valuable information for anyone considering bankruptcy.
http://www.cw13.com/index.html

Chapter 13 Articles

Chapter 7 Articles

How to Make Living on One Income Work

2009-09-23T10:37:00.003-04:00

There are many reasons couples may end up living on one income. Some want to be home to take care of their children while others may be dealing with layoff or medical issue. Whatever your situation, living on one income can be tight, but it certainly isn’t impossible. There are, however, some things that you need to think about and give some serious planning before you make the leap into single income territory.

Here are just a few:

Stop eating out. While eating out is fun, it is also expensive if you do it on a regular basis. Cut back to once a month and you’ll save quite a bit by cooking at home instead.
Work out a budget ahead of time. While everyone should have a budget, it can be even more important if finances are going to be tight. Sit down with your significant other and figure out what your expenses will be and where you can cut back.
Have a cushion. If you can, go into a one income situation with a comfortable amount of savings to get you through should any unexpected situations arise. There will likely be a learning curve when it comes to living on one income and you’ll need a little padding to get you through those first few months and to prepare for all those incidental expenses that crop up.
Buy new only when you need to. If you’re going to live on one income your days of buying everything new may be at an end. That doesn’t mean you can never have new things, but focus on getting them where it really matters rather than just purchasing everything new. Clothes, cars and furniture are available in abundance used, and are often of perfectly good quality.
Research frugal solutions. There are loads of resources on the web that are designed to help you save money around the house. Spend a little time with your significant other searching through this information to find out if you can apply any of these solutions to your own home and save every penny you can.
Determine what’s really important to you. If it really means a lot to you to stay at home with your kids—more than say, taking a vacation to Mexico—figure out a way to work your budget so that your priorities are highlighted and the things you can do without are deemphasized. You may have to forgo some pleasures but you’ll appreciate it in the long run.
Do a trial run. If you know you’re going to be going down to only one income, start living on just that for a few months so that there is less of a shock when the time comes. You’ll be able to work out the kinks while you still have that other income as a backup.

Source: Financial Highway

Testimony of a One Car Couple

2009-09-22T09:06:00.000-04:00

Up until a few months ago, if someone would have asked my wife or me to get rid of one of our cars, we would’ve just snickered and responded, “Impossible!” But then it happened… I wrecked my car.

A bit of background
From the time we met in 2003 up until seven months ago, my wife and I had always viewed two cars as a necessity. Then on Thursday, December 19th, 2008 I rear-ended a pickup truck at a busy intersection and wrecked my 2001 Jeep Cherokee.

At the time, my Jeep was worth about $5,000 and the initial quote to repair the damage was upwards of $9,000! In other words, it was totaled. I called a mechanic friend up and asked if he could come by and give it a once over to see if anyone he knew could do the body work for a reasonable amount of money. He obliged.

As it turns out, he did have a business associate who, despite being a wee bit unreliable, would be able to do the work for around $3,000 parts and labor. I jumped at the chance.

As the weeks rolled by and my Jeep was still “being fixed,” I grew increasingly impatient and my wife was far from happy. After all, she was the one responsible for carting me around until my Jeep was back in working condition.

The weeks turned into months, and now here we are in the middle of the summer and I still don’t have my Jeep back! We’ve certainly learned an important lesson about “getting a good deal,” but that’s a topic for another post.

Today I want to focus on how we successfully adapted to becoming a one car family. without killing each other, or hating the end result.

Changes we’ve made
My wife and I work in different towns, so she started dropping me off at a bus stop on her way to work. From there, I was able to catch a bus straight to my workplace. The stop was right off an expressway exit for her, so it took little more than five extra minutes each morning.

To save money, I purchased bus passes in 10 ride increments and wound up paying $1/ride. After work, I would catch a bus back to the dropoff/pickup spot and wait for my wife to arrive on her way home. We coordinated the pick up times via phone, and it worked out quite well.

Once summer came, and my wife began her three month vacation, things changed a little. Some days (fewer than I would like) I ride my bike about 10 miles to and from work. On days that I don’t ride, my wife gets up with me and drives me in.

I don’t want to spend too much more time talking about how we get around with just one car, so I’ll just say this: We do our best to coordinate our schedules, and we go out of our way to accommodate each other. A side benefit is that we get to spend more time together.

Read tips for making it work at The Five Cent Nickel

The Top 12 Most Frequently Used Pantry Items (and what to do with them)

2009-09-21T13:08:00.001-04:00

Learning the kitchen ropes for the first time? Gathering all ingredients, following the recipe, and avoiding a grease fire is all you can handle. And you seem to find recipes that require obscure necessities like capers and kalamata olives. What you need, newbie cook, is to stock your pantry with the most common ingredients and work within those parameters.

1. Cooking Oils
If you plan on making anything stovetop, oil is essential. You'll want to use virgin olive oil as much as possible--since it's a healthier option--but many things don't taste right cooked in olive oil. Keep some vegetable and peanut oil on hand to broaden your cooking options.

2. White Flour and Sugar
From baking to soup thickening, you'll need to have a bag of flour handy. If you need to brown a chicken breast, dip the chicken in egg then in flour before cooking stovetop. Far too many recipes call for flour, so don't venture into a cookbook without it. Sugar is used in much more than just desserts--keep a pound sealed in the pantry for a dash of sweet.

3. Cream of Soups
The cooking soups I use most often are cream of mushroom, cream of celery, and cream of chicken. Add these to tuna casseroles, pot roasts, and anything that needs a creamy punch. Purchase the low sodium/low fat varieties to cut back on the calories.

4. Apples and Oranges
These seem to last forever. Go for the mixed fruit bag that includes red apples, green apples, and oranges and you'll have a great selection of fruit that won't turn mushy soon after purchasing.

5. Noodles
Keep a bag of egg noodles (for stroganoff or casseroles) and some basic wheat spirals. Paired with some cooked ground beef and Prego sauce, you'll whip up a cheap tasty meal for pennies. I sometimes cook more noodles than I need for a recipe and use leftovers to make cold pasta and mini-tuna casseroles later in the week.

6. Breadcrumbs
From toppings to meat filler, a simple box of breadcrumbs goes the distance. Steer clear of the Italian seasoned variety--put your own oregano, basil, garlic, and parsley in to save money.

7. Spices
The seasonings I need most often are sea salt, garlic powder (or minced garlic, but not garlic salt), onion powder, parsley, basil, rosemary, thyme, oregano, Lowry's seasoned salt, chili powder, and crushed red pepper. On the sweet shelf you can always find vanilla extract, almond extract, nutmeg, honey, and cinnamon. I also combine baking soda, baking powder, and cream of tartar in with the sweets since you'll add them to baked goods.

8. Oatmeal
If you can acquire a taste for oatmeal, your pocketbook will be in good shape. A bowl of oatmeal make with milk and brown sugar costs just around $.40. Make oatmeal chocolate chip cookies and add oatmeal as a filler for meat loaf when you're in a pinch.

9. Chicken and Beef Broth
Buy several cans of both--you'll use more than you think for flavor across the cooking spectrum. If you need to save money buy bullion and make your own with boiling water. It only takes an additional 5 minutes to heat the water and add your own flavoring.

10. Canned Meats and Vegetables
The best tasting ones are chunk light tuna in water, chicken, green beans, all other beans, corn, and tomatoes (mainly for cooking). A good rule of thumb is only buy canned if you can find it frozen. Most of the frozen veggies are healthier and tastier, but some can't be beat in the can.

11. Quick Mixes
I like to keep a couple of mixes--Bisquick Heart Healthy, Betty Crocker white cake, Fiber One muffins--for the just in case scenario. When company comes over last minute it's nice to have something ready that doesn't take a huge effort to assemble.

12. Cold Necessities
Always keep eggs, milk, butter (the real thing, no transfat), and a block of cheddar cheese to keep your cooking options open. Check expiration dates--sometimes the organic products have a much longer shelf life. You may pay a bit more for the product but it can perch in your fridge for more time.

Source: Go Frugal Blog - Ashley Grimaldo is obsessed with finding free stuff, whether she needs it or not. She loves playing with words, crunching ice, and is convinced she missed her calling as a professional ice skater. In between changing diapers and pureeing baby food, Ashley is launching an official campaign to make maternity pants an apparel industry standard.

5 Things the recession has taught me so far

2009-09-21T11:24:00.001-04:00

Fed Chairman Ben Bernanke recently said that the recession is very likely over. I'm not sure I believe it all the way (do you guys?), but I'd be lying if it doesn't sound hot. It's been a wild & crazy past 18 months, and it's nice to hear that our world isn't going to hell in a hand basket for once.

I swear, if the media stopped portraying all this gloom and doom we'd be much better off. Everyone knows that humans are emotional - you say one wrong thing and CRASH! There goes the market. But I guess the opposite would also hold true. After all, here I am helping spread the 4-5 word phrase Bernanke just spoke of ;) At least it's a positive influence though.

Regardless, I've learned a lot over this whole ordeal and I'm sure I'll learn even more. I really like that about life - $hit can be flying all over the place, yet you can usually take away some new lesson or preventative measure to help you down the road. The bigger the problems, the bigger the learning curve too! (at least that's how I see it)

5 Things the recession has taught me so far:

It IS actually possible to spend less! All I have to do is NOT go into Target, TJ Maxx, Best Buy or the mall ;) That, and PAY ATTENTION TO MY FINANCES!

No job is ever safe. I've learned that you can't stay at one company forever, so always keeping your eyes open and active keeps me sane and away from an unexpected surprise one day.

Nature is one of the best gifts to us. And it's free! Since I'm not shopping as much, I'm now going on more and more walks. I totally forgot what fresh air felt like.

Networking is M-A-G-I-C. It really is a matter of who you know these days, so keeping in touch with old friends and colleagues is something that will def. pay off in the long run - esp. if they're in your same field. My favorite way to stay in touch is over beers and 1/2 priced appetizers at happy hours! Something a few of us bloggers did last night actually.

Everyone wants to master their finances! This might be one of my favorite things right now. You're hearing personal finance spout all over the place and all of a sudden learning about money is "cool!" You & I have ALWAYS known this of course, but at least the others are catching on ;)

So whether the recession is over or not, do me a favor and remind yourselves of all the positive stuff going on in your lives these days. We can't control the economy, but we sure can change the way we're living! Here's to a happy (and hopeful) recovery my friends.

Source: Budgets Are Sexy

Exclusive: Coupon Sherpa promises to make coupons reliable again

2009-09-18T14:06:00.000-04:00

There's no shortage of coupon sites on the Internet, which makes standing out a difficult task ... and all that more impressive when a new competitor emerges.

WalletPop was able to score an exclusive interview with Luke Knowles, the founder of Coupon Sherpa and FreeShipping.org, to find out what he thinks will make Coupon Sherpa the number one source for coupons on the Internet.

WalletPop: Luke, thanks for your time. Can you tell me what makes Coupon Sherpa special?

Coupon Sherpa: We see some problems with online coupon websites and we wanted to create a coupon website so that it would help our iPhone app. So we thought, why don't we be the ultimate coupon website that's missing right now.

"The biggest problem with coupon websites is that a lot of times you go to coupon sites and the coupons just don't work. You know, they don't work or they're expired and the sites just leave them up there so there's not a whole lot of quality control.

"So with Coupon Sherpa we're really going after that word 'reliable.' We want to be 'the reliable coupon website,' that you can trust. We're aiming for a success rate of 99.9% with our coupon codes. I know human error does creep in but we're going to put the quality control measures in place to account for that.

At the same time, besides just being the reliable coupon website, we want to provide all different types of coupons. Most sites focus on online coupons, like coupons codes, because that's the only way they can make money. So we want to be online, printable, grocery and pretty soon we'll add local coupons. So we want to be the one resource you need for coupons.

WP: When you say local, do you mean my local coffee shop can get online and put a coupon up?

CS: Yes, so coupons for what's around you, those coupons that are available near you.

WP: It's great to hear that a coupon site is tackling the problem of reliability. Earlier this week WalletPop posted about the incredible number of shoppers who will continue a purchase even if their coupon is rejected. Something like 50% of consumers will actually continue and make an online purchase.

CS: "Right, yeah, you've probably experienced this a hundred times. Coupon sites will list all these coupons and they don't work. There's no quality control there. So we're working directly with the merchants to get coupons specifically for them. If they aren't directly from the merchant, we test them.

WP: You're working directly with merchants. Can I still submit a coupon I find?

CS: "You can share coupons with us. Now we're not just going to put it on, we'll put it on if we find that it works, but we're going to make sure it works before we put it up. Sometimes that will involve us doing a fake checkout or doing additional research on the Internet to try and find an expiration date.

WP: Tell me a little more about the social aspects of your site.

CS: "We're trying to do the social thing; you can tweet any coupon and you can vote coupons up or down 'Digg' style.

WP: What's your favorite coupon from Coupon Sherpa right now?

CS: "It'd have to be the $25 off of a $100 purchase at Sports Authority. I also saved something close to 40% off of my Banana Republic purchase at an outlet mall recently using the Coupon Sherpa iPhone App.

WP: Are there any other Coupon Sherpa features coming that you can tell us about?

CS: "We're going to be creating an 'Ask Coupon Sherpa' feature on our site where it ties the whole site into Twitter. People can ask questions to Coupon Sherpa related to saving money or coupons or deals. He'll answer them real time on Twitter as well as answer some in more detail on the 'Ask Coupon Sherpa' section of the website."

WP: Thanks for taking the time to tell us about Coupon Sherpa, we appreciate your efforts to make coupons easier and more reliable.

For being a relatively new coupon website, Coupon Sherpa boasts an impressive number of major retailer coupons, and the current selection backs up the quality of quantity approach that Knowles claims will set Coupon Sherpa apart from its competitors. Right now there are good coupons for Target, Kohls, Finishline and many others to use online and plenty more that you can print out and use in store.

It's up against some hefty competition, but Coupon Sherpa is off to a good start -- it already saved me 20% on a pair of dress shoes!

Source: Wallet Pop

How To Pay Rent By Volunteering For Science Experiments

2009-09-17T09:33:00.001-04:00

This is a guest post from Hank.

I recently earned $40 the easy way. I was just sitting in my doctor's office minding my own business when a nurse from the office next door stopped by to ask for volunteers. It seems that they were doing a medical study on the adverse effects of vaccines. I was given the money for about thirty minutes of my time, a brief medical questionnaire, and five small vials of blood. Not bad for a half hours worth of "work".

This wasn't the first time that I had been exposed to earning money for the benefit of science. I grew up in a medium size southern town that had a fairly large teaching hospital. Not only were there lots of medical students running around the hospital's hallways, but there were also a lot of medical experiments being conducted too.

I remember hearing about one experiment that the medical college was conducting while I was a senior in high school. For $5,000, the research doctors at the school would cut off one of your big toes, sew it back on, and then measure how the loss of the toe affected your balance. All my friends and I thought that it would be so cool to have all of that money. It was a lot for a kid in high school, but none of us ever were ever gutsy enough to try for it.

Earning Money From Science:

So, of course, this recent medical study got me thinking. Can someone earn enough money from science to pay your rent? I think you can. Here are a few examples of how you can make money by giving back to help science.

Sell Plasma. Most people don't know about selling plasma. Blood plasma is prepared by spinning a tube of fresh blood in a centrifuge until the blood cells fall to the bottom of the test tube. It is just like giving blood. While you can make approximately $240 a month if you donate twice a week, it is nothing that you can get rich off of. There are also a few negative connotations associated with selling plasma, although I personally know of several respectable people from the "good side of the tracks" who sell plasma to supplement their income. Let's face it, teachers do not get paid enough (but, that's a subject for another time.)

Sell Eggs. Many women can make around $5,000 by selling their eggs to companies who resell them to women who cannot give birth. The only problem with this plan is that it takes a lot of time and patience, and there is a small surgical procedure that the woman has to go through in the end to retrieve the eggs. I knew of one lady who was trying to earn money this way, and it took months of paperwork and several doctors visits before they would even consider giving her a dime. This isn't the option to pursue if you need money in a hurry (or if you're a guy!), but it may be well worth your effort if you are patient.

Sell Sperm. Every year, approximately 75,000 American children are born thanks to a sperm donor. To qualify as a sperm donor, many sperm banks require that you be between the ages of 18 and 38, have a clean medical history, have high quality semen samples, and be able to pass a rigorous psychological and genetic screening. You must also be able to provide a medical history of you and your relatives going back several generations. The payoff can be handsome though at about $100 per visit and several visits needed each month.

Medical Experiments. Like I mentioned above, you can get paid up to $300 per day or more to participate in clinical or medical trials that test new or improved ways to treat an illness or condition. Or, you can participate in research studying a particular phenomenon or a new search for a disease's cure. In my case, I was paid to be in the control group of the study because I had never had a reaction to any vaccines. The possibilities of finding the study that is right for you should not be too hard since the possibilities are almost endless. You can get paid to participate in studies for things such as sleep deprivation, time isolation, alcohol, caffeine, nicotine studies, exercise, diet and nutrition studies, psychology studies, the list goes on & on.

Others. There are several other ways to make money in the medical arena that could be explored as well. You can consider becoming a surrogate mother which can pay tens of thousands of dollars. Or, you can sell your hair for few dollars per inch. There are many ways you can get paid for helping science. The hard part may just be finding them.

While these medical procedures listed above are not all inclusive, they can give you an idea of the possibilities that are out there. No one medical experiment, testing, or donating can solve all of your financial needs, but you can earn a decent supplemental income from some of these programs. Maybe you do not want to deliver pizzas in order to help you get out of debt faster. Maybe donating plasma is a better answer for you personally.

Source: Budgets Are Sexy

10 Bad Habits That Lead to Financial Disaster

2009-09-16T11:14:00.001-04:00

By Richard K. Gustafson

I ran across a very good article that discusses "bad habits" that lead to debt problems. Below is a link to the full article at www.bankrate.com, but I thought I'd briefly share the highlights with you.

The ten bad habits are:

1) Misusing Balance Transfers - All of us have found offers for new credit cards that provide a "teaser" rate. "Transfer balances and pay no interest for a year" is a common sales pitch. While it can be a good idea to manage debt by taking advantage of these types of offers, you still have to be disciplined and concentrate on paying down the debt. The common mistake is that the person continues to use the card and creates new debt.

2) Not Checking Credit Reports - Some people believe that there is no value in checking credit reports because they don't think they can do anything to change what the reports say. This is not true. Insuring that your credit report is accurate and challenging inaccurate information can help improve your credit score. An improved credit score opens opportunities for credit at lower interest rates. Lower interest rates can save you a lot of money! For more information, visit www.creditrepair.com.

3) Failing to Alert Creditors About Financial Hardships - Some creditors have in-house programs you can qualify for if you alert your creditor to an anticipated problem. If you wait until you are behind on payments, you may not be eligible for some of the programs the creditor could have offered you if you were current on payments.

4) Failing to Budget - Budget your money and stick to your budget. Don't forget about those yearly or quarterly expenses. Make sure you take them into account.

5) Using Retail Store Accounts - I'm sure you have experienced shopping at a department store and being offered the store's credit card. They are tempting as you are offered 10% off your purchases, or sometimes even more! The downside is if you don't pay it off at the end of the month, retail credit cards have much higher interest rates than Visa, Mastercard, or American Express.

6) Procrastinating on Creating an Emergency Fund - Make sure you begin saving a little money each month into a savings account. You never know when a trip to the hospital could lead to a loss of income. You should be prepared for these events. Most experts tell you to have at least 3-6 months of your budgeted expenses saved in a savings account. This money can help get you through a medical situation or a job loss.

7) Paying Bills in No Particular Order - If you can pay all of your bills at the end of each month, obviously it doesn't matter what check you are writing first. But, if you are going to fall short one month, you need to prioritize which expenses are more important so you can pay the important ones. Rent/Mortgage, transportation, utilities, and other "basic living expenses" should always be the priority over credit cards, retail store cards, etc...

8) Charging Purchases Instead of Using Debit Card or Paying Cash - If you have the money in your pocket to pay cash, why charge on the credit card? I know, it's only $20 here or there, right? But what about when you do this three or four times a month. Suddenly, you have balances on your credit cards that could get out of control if you don't pay them each month.

9) Making Credit Payments Late - You might be tempted to simply "eat the late fee" on credit cards if you're struggling to make payments. Try to avoid this temptation as paying late could cause your interest rates to triple. In fact, missing payments to one credit card could could cause ALL of your interest rates to triple on ALL of your credit cards.

10) Making the Minimum Payment Only - Paying minimum balances is better than not paying, but if all you are doing is paying the minimum you won't make much progress paying your debt. Try to pay at least a little bit extra each month. Obviously the best option is to pay off the entire balance each month. Try working a part-time job or overtime and using the extra earnings to pay down debt.

Here's the link to the full article: www.bankrate.com/brm/news/debt/debtmanageguide/mess4.asp?caret=8 If the debt gets overwhelming, you may want to seek out bankruptcy information. By Richard K. Gustafson

I ran across a very good article that discusses "bad habits" that lead to debt problems. Below is a link to the full article at www.bankrate.com, but I thought I'd briefly share the highlights with you.

The ten bad habits are:

1) Misusing Balance Transfers - All of us have found offers for new credit cards that provide a "teaser" rate. "Transfer balances and pay no interest for a year" is a common sales pitch. While it can be a good idea to manage debt by taking advantage of these types of offers, you still have to be disciplined and concentrate on paying down the debt. The common mistake is that the person continues to use the card and creates new debt.

2) Not Checking Credit Reports - Some people believe that there is no value in checking credit reports because they don't think they can do anything to change what the reports say. This is not true. Insuring that your credit report is accurate and challenging inaccurate information can help improve your credit score. An improved credit score opens opportunities for credit at lower interest rates. Lower interest rates can save you a lot of money! For more information, visit www.creditrepair.com.

3) Failing to Alert Creditors About Financial Hardships - Some creditors have in-house programs you can qualify for if you alert your creditor to an anticipated problem. If you wait until you are behind on payments, you may not be eligible for some of the programs the creditor could have offered you if you were current on payments.

4) Failing to Budget - Budget your money and stick to your budget. Don't forget about those yearly or quarterly expenses. Make sure you take them into account.

5) Using Retail Store Accounts - I'm sure you have experienced shopping at a department store and being offered the store's credit card. They are tempting as you are offered 10% off your purchases, or sometimes even more! The downside is if you don't pay it off at the end of the month, retail credit cards have much higher interest rates than Visa, Mastercard, or American Express.

6) Procrastinating on Creating an Emergency Fund - Make sure you begin saving a little money each month into a savings account. You never know when a trip to the hospital could lead to a loss of income. You should be prepared for these events. Most experts tell you to have at least 3-6 months of your budgeted expenses saved in a savings account. This money can help get you through a medical situation or a job loss.

7) Paying Bills in No Particular Order - If you can pay all of your bills at the end of each month, obviously it doesn't matter what check you are writing first. But, if you are going to fall short one month, you need to prioritize which expenses are more important so you can pay the important ones. Rent/Mortgage, transportation, utilities, and other "basic living expenses" should always be the priority over credit cards, retail store cards, etc...

8) Charging Purchases Instead of Using Debit Card or Paying Cash - If you have the money in your pocket to pay cash, why charge on the credit card? I know, it's only $20 here or there, right? But what about when you do this three or four times a month. Suddenly, you have balances on your credit cards that could get out of control if you don't pay them each month.

9) Making Credit Payments Late - You might be tempted to simply "eat the late fee" on credit cards if you're struggling to make payments. Try to avoid this temptation as paying late could cause your interest rates to triple. In fact, missing payments to one credit card could could cause ALL of your interest rates to triple on ALL of your credit cards.

10) Making the Minimum Payment Only - Paying minimum balances is better than not paying, but if all you are doing is paying the minimum you won't make much progress paying your debt. Try to pay at least a little bit extra each month. Obviously the best option is to pay off the entire balance each month. Try working a part-time job or overtime and using the extra earnings to pay down debt.

Source: By Richard K. Gustafson on Legal Helpers Blog

Here's the link to the full article: www.bankrate.com/brm/news/debt/debtmanageguide/mess4.asp?caret=8 If the debt gets overwhelming, you may want to seek out bankruptcy information.

Senate committee takes on Web-based 'loyalty' marketing companies

2009-09-16T11:01:00.001-04:00

Nobody wants to get nailed with unexpected credit card charges in this economy. Who's got money to waste?

If you've ever been startled by tiny little charges appearing on your monthly statement that contain the words "rewards," or "club" you swear you didn't pay for, there's a fairly good chance you've done business with Webloyalty, Vertrue or Affinion, though you didn't know it at the time. A boatload of consumers are with you.

And that's why these three companies, all privately owned, half an hour drive from each other on I-95 in Stamford and Norwalk, Conn., recently found themselves the subject of an investigation by the Senate Commerce Committee. From what I've heard, they haven't been particularly cooperative so far.

But when it comes down to it, none of them have had to be. The FTC really hasn't done much, despite some excellent suggestions.

In the past, Webloyalty has acted as if it had something to hide, developing something of a reputation over the years for trying to bury negative information about itself -- though its efforts to do so with an investigation we did at Consumer Reports Webwatch in September 2005 led to what could live today as a lesson for companies about how not to go about this sort of thing.

Hint: Don't publish a client list on your Web site if they've hired you to SEO their bad results off the first page of search returns. Take the lead from Kekst, the PR company Webloyalty (and AIG) hired. They're known for not publishing client lists.

However, Webloyalty may have learned from past mistakes. Webloyalty's corporate PR office e-mailed me after I Twittered that I was looking for former employees of these three companies -- no luck, I probably would have done better hitting some of the bars in downtown Stamford -- to ask if I needed anything.

I wanted to know: How is the company considering changing its practices in light of the congressional investigation? "Although the incidence of individuals who appear to have clicked through our process without reading what they were doing is quite small as compared to all of our members, even a few is too many," Beth Kitchener, Webloyalty's vice president of corporate communications, said in an e-mail exchange. "The class action lawsuit settlement as well as the issues raised by the Senate Commerce Committee put an exclamation point on the need to get this number as low as possible."

As of Aug. 1, Kitchener said, one key change is that Webloyalty "now require[s] customers to enter the last four digits of the credit card they used for the purchase they just made from our marketing partner to confirm they want to charge that same card for a Webloyalty membership. If they enter a number that doesn't match, we don't sign them up."

That seems to be a step in the right direction. Many consumers take requests for surveys and $10 rebates after a transaction as coming from the Web site they just did business with, which could be Chase or Orbitz or some other well-known brand, and don't expect some kind of quasi-identity-theft in the background, even if they enter some blow-off e-mail address just to get to the next screen.

An extra step requiring the consumer to actually part with credit card information a second time, should make a difference. Interestingly, Kitchener said, "None of our competitors have adopted this form of affirmative consent. We hope they will follow our lead."

So: Let's ask the same question of Vertrue and Affinion. Is Webloyalty right? Or are you changing your practices? How? More next week.

Source: Wallet Pop

Rebuilding Your Credit After Bankruptcy

2009-09-16T08:55:00.001-04:00

Filing for bankruptcy is a serious blow to anyone’s credit; however, it is possible to rebuild your credit standing within a reasonable amount of time. The amount of time it takes to rebuild your credit varies from person to person; but, for for most who file, bankruptcy is actually the first step on the road to rebuilding your credit standing rather than the last.

When deciding to file bankruptcy, it is important to understand that Bankruptcy can remain on your credit report for up to 10 years. However, when you consider that a collection lawsuit, repossession, or foreclosure will also remain on your credit report for the same period of time; bankruptcy may be the best option since the bankruptcy eliminates your obligation to the underlying debt. This is an important consideration when you consider that in a repossession, you will be responsible for the remaining outstanding balance. Moreover, although a bankruptcy may stay on your credit report for 10 years, it will only take a few years after a bankruptcy discharge to rebuild your credit.

Step 1: Filing Bankruptcy

Believe it or not, the bankruptcy discharge itself, which liquidates all, or most of your actual debt, improves your income-to-debt ratio instantly. This, by itself, will help to increase your credit score.

Step 2: Obtain Credit and Use It

After your discharge, you will receive credit card and other solicitations fairly shortly. Most of these will be high-interest, low limit credit cards. Normally, I would recommend that you avoid these offers like the plague; however, it is a simple truth that you have to be in debt to establish credit. Therefore, I recommend that you obtain one of these cards and actually use it, sparingly.

Bankruptcy eliminates your past credit history. Therefore, you must establish a new credit history to rebuild your credit score. By using the card and making payments, you will establish a new credit history. Your use of credit is reported to the credit bureaus and will help accomplish this goal.

Step 3: Stay Current and Lean From Your Bankruptcy Experience

I hope that Bankruptcy was a learning experience. Follow these rules when using your credit card.

Do not use your credit card if you do not have the money to repay it. A credit card is a tool; not a crutch.
Use your credit card only for emergencies or large necessities and don’t use it again until the balance is paid.
Never carry a balance on your card more than two months of disposable income.
Pay more than your minimum balance. If you cannot afford to pay more than your minimum balance, then you can’t afford a credit card and should wait to try to rebuild your credit.
Never transfer a balance unless you actually intend to close your account with the card you are transferring. Most people get in trouble by transferring balances and then running up a new balance on their old card. GET RID OF IT!
Do not get a “store card.” The cards you get from Home Depot, Macy’s, and Target have interest rates that usually exceed 30% and cannot be used anywhere else. Stay away from them!
YOU DON’T NEED MORE THAN ONE CREDIT CARD; EVER!
As time goes by, you will begin to rebuild your credit score. You can eventually replace the high interest credit card with one that has better terms. However, don’t start overextending yourself. Learn from your bankruptcy experience!

Step 4: Avoid Credit Traps

Credit card companies are sneaky. They will offer all sorts of “offers” such as “90 days same as cash” or “no interest for six months.” However, don’t fall for these traps. Ninety percent of consumers do not repay the principal balance within the “interest free” period and if you have even $1 left owed on the principal, you will be charged interest on the entire balance. For example, if you purchase a dishwasher for $500 with no interest for six months. At the end of six months you still owe $5.00; the credit card company will then charge you the full six months interest on the entire $500 purchase.

Step 4: Monitor Your Credit Report

As a Massachusetts resident, you are entitled to 2 free copies of your credit report from each of the credit reporting agencies per year. Therefore, you should monitor your credit report every six months. If you find an error on your credit report, or find that a creditor that was discharged in bankruptcy is still reporting, you should report the error with the credit reporting company. If you still have problems fixing the error, you should contact your bankruptcy lawyer who will probably be able to help you.

This is by no means an exhaustive list; but just a guide. Credit is a two edged sword and should be used wisely. If you obtain new credit and do not control your spending, then you will likely be back in the same boat that you were in when you filed bankruptcy in the first place; only you will not have the option of filing again for 8 years. If you live in Massachusetts and you are considering bankruptcy, please feel free to contact us. Your consultation is free.

Source: Dax B. Grantham at the Grantham & Cencarik Blog

How to Face a Family Financial Crisis

2009-09-15T09:43:00.000-04:00

An anonymous GRS reader submitted a question last week that hits close to home:

I have a family member that this past year has been in serious financial trouble. He is one of the most ambitious and intelligent people I know and I would have never imagined him getting in this kind of trouble. His ambition may have been his downfall as he keeps shooting for the stars and has fallen short on some of his business ideas, which may have put him in a more vulnerable position when the economy turned south.

He is now living in debt and struggling to put food on the table for his wife and four young boys. He has had to live on credit cards for several months and they are all maxed out. I have never seen first-hand anyone in this much trouble.

My question to you is, When faced with job loss and depleted savings, how can you avoid going into credit red? At what lengths would you go to to avoid living on credit cards and missing payments on just about everything? In the situation, is credit rating even worth anything?
As I say, this situation hits close to home. Last year, I wrote about my little brother, Tony. (I say “little brother”, but he’s 36 now.) Tony’s family got caught up in the mortgage mess, buying a home in Bend, Oregon at the height of the bubble — and before their home in Portland had sold. Six months earlier and things would have been fine. But things weren’t fine. They couldn’t sell either house. The market went to hell and they lost both homes to foreclosure.

Tony now faces circumstances similar to those described in the question above. He’s learning that there’s no easy solution to a family financial crisis. His father-in-law recommends “earning your way out of the problem”. That’s a fine theory, but not always practical. Tony and his wife work hard, but they’re only able to earn so much. I think that he — and people in similar situations — should also:

Cut spending to the bare minimum. This can be difficult. It can be tough to shift from normal spending to frugality, especially if you’re accustomed to middle-class luxuries and a middle-class lifestyle. But when facing a financial crisis, it’s imperative to reduce spending as much as possible and as soon as possible. You must stop the bleeding before you can treat the wound, before it can heal.

Consider drastic measures. Sometimes it’s not enough to stop the bleeding. To stretch the metaphor, sometimes you need to amputate. If you’re in a financial crisis, you may have to take drastic action, maybe even selling a car — or your home. Most people are unwilling to consider steps like these, which only leads them further into debt. These folks need to…

Be brutally honest. It’s easy to say, “I’m in trouble now, but it’s only for a month or two. I’ll keep doing things as normal by using my credit cards.” If you find yourself in a financial crisis, try to take an objective look at your situation. Get outside advice from friends and family. Be willing to listen to what they tell you. Sometimes others are better able than we are to see the slack in our budgets.

Avoid touching retirement savings. When faced with financial peril, it’s easy to look at the large sums sitting in your retirement accounts and think they’ll provide the life preserver you need. In nearly every instance, though, you’re merely postponing the pain. Your retirement savings are there to provide for you when you’re no longer able to provide for yourself. They’re not an emergency fund.
I’m sure that other Get Rich Slowly readers have family members in similar situations. Perhaps you’re even struggling yourself (or have done so in the past). Based on your experience, what advice can you offer other folks who are struggling in this economy? What can be done to avoid sinking deeper and deeper into debt?

And as an ancillary question, what can we do to help family members in need? What should we do? I’ve told Kris that if Tony and his family find themselves in danger of living on the street, we’ll make room for them in our house. But what about before that? At what point do I loan him money? (Or gift him money?) Or should I just be here to offer advice when he needs it?

Source: Get Rich Slowly

If You're Thinking About Mixing Money And Family, Read This First

2009-09-14T09:27:00.001-04:00

I've had both good and bad experiences loaning out money to family members, but renting from them and paying their mortgage is beyond my comfort level. In theory it should all work out fine (after all, you're blood right?) but in the real world people tend to get hurt or taken advantage of.

Unfortunately, an ol' college friend is experiencing just that - getting stepped on because he doesn't want to ruin his relationship with both his brother and his dad. My friend means well, but it's time he starts to consider his options before he loses even more of his sanity...and money! Here's a play by play of what's going on:

My friend Good Brother (as he shall be named from this point forward) decided to live with Bad Brother and pay him rent (aka part of Bad Brother's mortgage) as well as 50% of the utilities.
For 2 years Good and Bad Brothers were happy.
Then one day Bad Brother decided to go back to school and move half-way across the country.
Good Brother was sad to see him go, but happy Bad Brother was pursuing his dreams.
Bad Brother asked Good Brother to help him fill the occupancy while he'd be gone (2+ years), and since Good Brother is, by nature, Good, he had no problem helping him out.
Good Brother tried and he tried and he tried, but the recession had finally hit and he couldn't find a suitable renter. It had now been THREE months and it just wasn't working.
He explained to Bad Brother that his asking price was too high (all the while paying 100% of the utilities now), and that his brother needed to lower the price and the rental terms.
Bad Brother wasn't having it and decided to try himself - only Bad Brother was more talk than he was action (and Good Brother didn't realize he was being taken advantage of yet) so they let ANOTHER three months pass only to remain where they originally started- without a 2nd renter.
It turns out another culprit had come into play - lack of motivation. The reason? Crazy Dad.

You see, trying to make things better and "help out," Crazy Dad had decided to subsidize the amount of the 2nd half's rent so that his son (Bad Brother) would have enough to pay the mortgage each month. While nice in theory, this has only caused more delays in finding a roommate as the sense of urgency has quickly disappeared.
On top of it all, Crazy Dad and Bad Brother believe Good Brother needs to be held responsible for filling the vacancy - family duties and all.

Good Brother is now pissed.

As it stands - now SIX MONTHS later - Good Brother is still paying 100% of the utilities & the vacancy has yet to be filled. Only now, Good Brother is starting to realize that it's not his responsibility to find this elusive roommate, and he's thinking of moving out. Why should he continue paying an extra $150 every month or continue getting bashed for not finding a roommate? Is this really HIS responsibility? Personally, I think not. The one who owns the house should be the one maintaining and paying for it - no one else. Ask his father or brother, and they'll tell you differently though.

Now, there's probably more to it than what Good Brother tells me, but the reason I post all this is to illustrate the importance of being careful. Mainly, being careful when it comes to mixing money with family members. Some of the times things work out great! But it's those other times that really put a strain on your relationships, and the times I hope you're able to avoid.

So please please PLEASE think it through when considering money arrangements with your loved ones. If you decide to go for it, write down in complete detail the arrangements you'll be making so everyone's on the exact same page. We all think it could never happen to us, but money has a strange way of breaking families apart. So please, be careful out there :)

Source: Budget Are Sexy

12 Clever Substitutions That Save Money (Nearly) Effortlessly

2009-09-11T09:38:00.002-04:00

One of my favorite ways to trim money from my spending is to find simple little substitutes for my regular expenses. If I can trim a few bucks from the cost of household supplies, routine purchases, and other things like that, over the long run, that can add up to a lot of money with virtually no change in my life. Here are twelve of my favorites (not including my “infamous” homemade laundry detergent).

Laundry Softener -> Vinegar
Instead of buying expensive laundry detergent, just use half a cup of white vinegar to the “softener” cup in your washing machine. It accomplishes the same effect as softener – it makes your clothes really soft – plus it breaks down the laundry detergent, making the clothes much better for people with sensitive skin or allergies. What about the smell? Once the clothes are dried, you smell nothing at all. You can buy four gallons of vinegar for $6, meaning the cost per load is about $0.05, while a load’s worth of Downy costs about $0.15. You save a dime per load and your clothes are less chemical laden.

Ziplocs -> Reusable Containers
Ziplocs – especially the small ones – usually wind up in the trash after one use. On the other hand, a reusable container can last for years. Since a typical Ziploc costs about $0.10 and you can get a reusable Rubbermaid container for about $1.00, you break even on the container after about twelve uses or so (the cost of washing the container in the dishwasher is estimated there) and everything thereafter is pure savings.

Dishwashing Detergent -> Simple Homebrew
Instead of using liquid or powder dishwashing detergent (and paying a stiff premium for it), just take an old milk jug, put two teaspoons of liquid dish detergent and four teaspoons of baking powder in it, then slowly fill the jug with warm water, sloshing it while you do it (even better, just slowly add the soap as you’re adding the water). Then put that jug under the sink. Each time you do a load, fill up the cup with the homebrew. It works like a charm. The jug will provide enough for eight to ten loads of dishes for about a penny each, compared to about thirteen cents per load for ordinary detergent.

Knife Set -> Chef’s Knife
You’re just getting started in the kitchen and you think it’s time to get yourself a big ol’ knife set. Don’t. Unless you’re doing crazy things in the kitchen, all day every day, you really only need one knife – a chef’s knife. Head down to your local retailer and check them out. One good chef’s knife will make kitchen work easier than an entire block’s worth of other knives. It’s really all you need – I can’t even remember the last time I used a knife besides that one. Just learn how to properly hone it and sharpen it (both are easy – check out this YouTube video).

Windex -> Vinegar
Seriously. Just use vinegar instead of Windex when you clean your windows. It cleans off almost anything on a window and doesn’t streak and, more importantly, doesn’t leave a film behind as Windex often does. Just put some vinegar in a spray bottle – maybe that Windex one that you didn’t buy a replacement for – and just wash windows as normal. You’ll be quite happy with the results – and you’ll save about a penny per squirt.

Paper Towels -> Reusable Cotton Cloths
Cotton cloths work better, absorb more, and you can get a five pound (!) box for about the same price as a jumbo pack of paper towels. But what about the WASHING? It’s easy – just keep a ton of them in a drawer in the kitchen and use them for spills and filtering and other purposes until they’re dirty, then just toss them into any load of socks or underwear or towels. Even a big handful take up barely any room at all and before you know it, you’ve refilled your supply. Better yet, you’re not buying any more paper towels and you’re reducing your garbage.

Drain Cleaner -> Baking Soda and Vinegar
Remember those nifty volcanoes that kids tend to make for science fair projects in grade school? The basic mixture that made them bubble up was baking soda and vinegar – it expands nicely and pushes itself into everything. Perfect for clearing a clogged drain, no? Just put in a quarter cup of baking soda, chase it with half a cup of vinegar, then cover the drain and wait fifteen minutes. Once that’s done, chase it with a gallon or so of boiling water. This will clean almost any drain and save you from blowing unnecessary amounts of money on a big bottle of Drano. This also works as a toilet bowl cleaner – it’ll foam up like crazy at first, but after fifteen minutes, you’ll be able to scrub your toilet with a brush with ease.

Television -> Old Computer
If you need a new television somewhere, why not just use an old computer instead? A computer that’s five years old with a ‘net connection can easily be a substitute for a television. You can watch tons of programs full screen on Hulu and many channels offer a full screen stream, too, plus it’s simple to watch DVDs on a computer as well. Even better, you can stow the box somewhere out of the way (in a cabinet, perhaps) and just leave the monitor somewhere easy to access. This can be a great solution in a kitchen, where you can watch television on it or use it to call up YouTube videos to tutor you through a meal prep – plus you don’t have the cost of buying anything to get it working.

Oven Cleaner -> Ammonia
If you cook at home, you’ll eventually have to clean your oven – and it can be a nasty job. There are lots of products out there that claim to be able to make this process easy, but the easiest way I’ve found is far cheaper – and far easier. Just put a cup of ammonia in a glass bowl in the evening, put that bowl in your oven, and close the door. Let it sit overnight. The next morning, get rid of the ammonia and you’ll find scrubbing down the inside of your oven is suddenly quite easy. The burnt-on drippings from spilled dishes will come right up with no problems. Plus, a jug of ammonia is far cheaper than some spray-on solution.

Keep reading more tips here, on The Simple Dollar

12 Common Myths About Bankruptcy

2009-09-10T14:42:00.004-04:00

One of our favorite law blogs, Grantham & Cencarik, in Boston, posted this the other day:

I have been practicing Bankruptcy law in Massachusetts for over eight years. Throughout that time, I am confronted with clients who come into their intake interview with several misconceptions about bankruptcy. Therefore, I decided to compiles a short list of the most common myths about bankruptcy based on what I have heard from my own clients through the years. If you are considering bankruptcy, and are afraid because of what someone told you that you shouldn’t because…. I hope that you take the time to read this.

1. Under the new Bankruptcy Laws Everyone has to repay their creditors. False: In 2005, the bankruptcy laws were changed to provide a test to see who can qualify for a Chapter 7 Bankruptcy. Essentially, if someone has sufficient income, and the ability to repay a portion of their debt, then they will have to file a chapter 13 which will require them to enter into a court supervised repayment plan with their creditors. The new law does not prevent people from filing and in most situations people are still able to get the same relief now as before the law changed.

2. Once I file Bankruptcy my credit is ruined for life. Not Quite…while bankruptcy is a blow to your credit rating; it is not permanent. Because most people have numerous charge offs and sometimes even a collections lawsuit on their credit report before they decide to file, most people will actually seen an increase in their credit score within 1-2 years. Moreover, most of our clients report that they are able purchase cars and homes within 2 – 3 years.

3. Only deadbeats and losers file for bankruptcy. False…Most people file for bankruptcy after a life-changing experience, such as a divorce, unemployment or a serious illness. They’ve struggled to pay their bills for months and just keep falling further behind.
Moreover, some famous people who have filed bankruptcy who were (or are) successful include: Walt Disney, three US Presidents, Larry King, Donald Trump, and Henry Ford.

4. All debts can be discharged in a bankruptcy filing. False…certain debts cannot be discharged through bankruptcy. For example, child support, student loans and most taxes, and debts incurred by fraud (to name a few) cannot not discharged. This list has exceptions and is not exhaustive. If you have questions, contact a bankruptcy lawyer.

5. You can’t get rid of back taxes through bankruptcy. Generally speaking, this is true. However, under some circumstances income taxes are dischargeable. The rules concerning discharging taxes are complicated; so if you owe income taxes, an experienced bankruptcy lawyer can tell you if you can discharge the taxes.

6. Filing bankruptcy could cost you your job. No. The current bankruptcy code prohibits discrimination against an individual who is in bankruptcy or who has bankruptcy in the past.

7. You will never be able to own property again. Not True. Once you receive your bankruptcy discharge, you bankruptcy if finished. You can continue to live your life and can purchase and sell property like everyone else. Creditors will eventually lend to you again to help you with large purchases and you are able to purchase whatever you can afford.

8. Everyone will know I filed for bankruptcy. False. Bankruptcies, like all court records are public; however, in order to see the records, one has to actually go to the court and look for them. Bankruptcy is not published generally the only people who are going to know are those who you tell. Some people think that newspapers carry bankruptcy filing information, this is simply not true.

9. I will lose everything I own. Again this is false. Once you file bankruptcy, you will be able to keep certain property up to a certain value; this property is known as exempt. Most bankruptcies are known as “no asset” bankruptcies, meaning that you get to keep all of your property and all of your unsecured debts are discharged. Exemptions vary from state to state, so it is important to speak with an experienced bankruptcy attorney in your area.

10. Creditors can still harass me if I file for bankruptcy. Not Legally. When the bankruptcy is filed, automatic protection is put onto you and all of your property instantly. Creditors are not allowed to contact you for any reason, which includes calling or even billing you. If they persist in harassing you, you do have remedies available through the Federal Bankruptcy laws.

11. I can be turned down for filing bankruptcy. Mostly False. So long as you are honest on your petition, don’t try to conceal assets and don’t lie about your income an experienced bankruptcy will be able to file you in the proper chapter bankruptcy and your debts will be discharged. The bankruptcy statute is designed to help ALL honest debtors who need help. If you lie on your petition, or try to conceal assets, then the justice department will seize your assets to repay your creditors and you will not have your debts discharged. Moreover, you could end up in jail.

12. Bankruptcy is easy; I don’t need an attorney. False. The bankruptcy code is extremely complex; so complex that a lot of attorneys choose not to practice in the field. If you fail to take all the proper steps leading up to filing bankruptcy, then you risk losing your home, and/or all of your assets. We have represented several clients who wanted to save money and who filed bankruptcy without an attorney and messed up on their petition and/or filed under the wrong chapter. They ended up paying us three or four times more in legal fees to fix the mess that they made than they would have paid us to file their bankruptcy in the first place.

By no means is this an exhaustive list and there are many more misconceptions out there. If you have any questions, then you should contact us and schedule a free appointment. You have nothing to lose and we can provide you with the facts you need to make an informed decision.

Source: Boston-Legal.com

Spending Filters and Delaying Gratification

2009-09-10T09:04:00.000-04:00

In a recent article Matt Jabs from Debt Free Adventure discussed an interesting concept, Spending Filters. A filter is a device that removes unwanted items as they pass through it; a spending filter is something similar. Before making a purchase you run it through some of these filters to ensure you are not making a purchase for the wrong reasons.

Matt lists 6 filters:

1. Do I need it?

2. Ask for a discount

3. Consider alternative products/services

4. Compare prices

5. Be productive instead of spending

6. Use spending ledgers

Some other filters mentioned by readers in the comments section are:

1. Control spending

2. Need vs. Want

3. Will I need it in the future?

Although I like Matt’s concept of spending filters, I think that most of us use spending filters knowingly or unknowingly. I believe Matt has left out one important factor: self-discipline. If you do not have self control and the ability to delay gratification then the above mentioned filters will not be of any use to you – because at the end of it if you want, you’ll buy it.

Spending filters will only work if you have a desire to save and the self discipline to delay immediate gratification. If someone really wants that brand new car then putting it through spending filters won’t stop them from getting it. I can come up with tones of reasons why I really need the new car:

1. Buying used car will cost more in long run due to repairs.

2. No warranty for used car.

3. No guarantee that the car is truly in the condition the seller claims it to be.

4. New car will last me longer.

The list can go on and on. Just recently I had a family member go through this exact scenario – tones of debt, just one income, recently had a child and he was able to convince himself to lease a brand new car, probably the worst financial decision he could make at this time. Not only did we (the wife and I) put the purchase through the spending filters for him, but we also did detailed math and showed him in numbers how bad of a deal he was getting. However, he was convinced that he needs the new car and that there are no alternatives.

If you do not have sufficient self control, this concept will not work very well. Spending filters are subjective; you see things as you WANT to see them even with the filters on. If you have spending problems than your focus should not be on applying these spending filters, but learning how to delay your gratification and practicing self control to avoid impulsive spending.

Consumers are not in debt up to their neck because they do not understand the spending filters and wants vs. needs, but because they do not have sufficient self control and are accustomed to having everything they want now. This need for immediate gratification leads them to impulse buying, which leads eventually leads to spiraling debt and the cycle goes on.

If you are reading personal finance blogs then you fall into two groups:

First group are those who are financially responsible and want to learn more about saving, investing and personal finance.

Second group are those who have made some financial mistakes and fallen in debt, but are now are trying to get things back to normal.

If you fall into the first group then I direct you to Matt’s article to learn more about the spending filters and how they can help you, if you are in the latter group than I direct you to our article on how to delay gratification.

Source: Financial Highway

What Should I Bring To My Lawyers Office For My First Meeting?

2009-09-09T10:43:00.000-04:00

Great post from one of our favorite Attorney Blogs: Gratefullawyer.com

The most important thing to bring is everything. Completing a questionnaire gives the lawyer the best view of your problems . The more information that we review. The better we can undestand your problems and tried to provide answers that address those problems

Bring all your bills, pay stubs, tax returns, information on your cars, household goods, bank account and retirement accounts. You can looked for a complete list on the website at the document list link.

Bring a set of questions that you want answered. We may not be able to answer all your questions at the first appointment but we will try to let you know if bankruptcy will help you.

In a down economy, what are the wealthy doing with their money?

2009-09-09T08:30:00.001-04:00

Experts who work with the wealthy and observe their spending habits say rich folks are sitting on their cash. Just like the rest of us, they're worried about the future. Suddenly uncomfortable with the nation's financial volatility, the wealthy are revisiting their investment and savings strategies, says Chris Geczy, director of the Wharton Wealth Management Initiative at the Wharton School in Philadelphia.
"They're consuming less and saving more," Geczy says.

Like so many other Americans, "the mass affluent were overextended" in real estate and investments gone sour, he says. Now, they are more likely to invest in fixed-income vehicles.

"They're still scared of risk," he says.

Investment professional Nancy Rooney has noticed this fear, too.

"There is a subset who -- since September and October -- are frozen and so nervous," says Rooney, managing director and head of the Northeast investment business for private wealth management at J.P. Morgan in New York, which says it serves 51 percent of the Forbes 400 list of U.S. billionaires.

"They're looking at their principal left and realize, 'If I lose any more, I'll jeopardize my quality of life,'" she says.

Here are a few ways the wealthy are saving in the current recession -- and lessons average investors can learn from the rich.

Put safety first
Today, many wealthy people are thinking about safety over yield, Geczy says. The wealthy are scouring the Internet, looking for the best rates on CDs, money market accounts and other FDIC-insured options, he says.

"They're still hugging close to fixed income, Treasury bills and fixed assets," he says.

The FDIC only insures up to $250,000, so multiple savings accounts at solid institutions are key to liquid returns, says Tim Grizzle, a certified public accountant and CEO of Georgia Logic, an Atlanta-based financial planning firm for high net-worth individuals, who also wrote "Creating Wealth in a Turbulent Economy."

"Those who are cash-heavy spread the wealth over multiple banks to ensure FDIC insurance," Grizzle says.

Rooney says that when shopping around for a bank, it's important to look into an institution's overall financial health.

"Your biggest decision this year is where you're going to put your money," Rooney says.

As long as you choose a bank that's FDIC-insured, there will be no risk to the first $250,000 you deposit. However, if a bank fails and is taken over by the FDIC, your great rate could disappear, as there is no guarantee an acquiring bank will honor your previous institution's rate.

Banks that offer a much higher-than-average rate of return may be cash-strapped and at risk of failing, Geczy says.

On the other hand, competitive rates aren't necessarily a sign of trouble. For example, some online-only banks can offer great rates because they don't have the expenses of a brick-and-mortar bank, including everything from rent to electricity bills and janitorial services.

It takes a savvy researcher to discern the difference between a bank that's cash-starved and one that's an efficient operator. If a bank offers an unusually high return, ask questions, Rooney says.

"I wonder why it's above market -- why do they need deposits so desperately?" she says.

Protect against inflation
Like everyone else, the wealthy have to worry about rising prices eating into their savings. For now, inflation remains subdued; in fact, some experts are more worried about the prospect of falling prices, or "deflation."
Banks are paying out very low rates on savings instruments today. However, the return may be better than it appears, thanks to today's low inflation rate. For example, if you find a savings account with 1 percent interest in an environment where inflation runs minus 1 percent, you've netted a 2 percent rate of return.

Keep reading on bankrate.com

Overspenders to face tax audits?

2009-09-08T08:58:00.000-04:00

A recent article in the Wall Street Journal reported on a new effort by the IRS to catch tax cheats. The IRS is going to compare data on mortgage-interest payments provided by financial institutions with homeowners' declarations of income on tax returns. The idea is that people must have more income than they reported to the IRS if they are able to make their mortgage payments, the bulk of which for homeowners with new loans from purchase or refinance, will be payments toward interest. Using data from 2005, the Treasury inspector general said that "tens of thousands of homeowners who paid more than $20,000 in mortgage interest" reported income that appeared "insufficient" to have covered their mortgage payments and basic living expenses. I don't doubt that fact, but I see an alternate hypothesis to explain the situation. These families are accurately reporting their income, but they are just spending more than they earn. They have houses they cannot afford, and they use Capital One to finance their basic living expenses so their income dollars can go to mortgage payments. Back in 2003-005 when these data were gathered, the credit market was loose and many families made up shortfalls in monthly living using credit cards, or in some instances, doing a cash-out refinance, and then living off the cash, expecting the housing market to sustain this strategy. Relying on debt to make ends meet has always carried risks, including bankruptcy risk. Should we add the risk of a tax audit to the reasons that families need to keep income and expenses in alignment?

Source: CreditSlips

How We Organize Our Finances

2009-09-04T09:54:00.000-04:00

Here’s a quick rundown of how we organize our finances and our financial documents -

Extremely Important Documents -

We keep our tax returns, marriage license, birth certificates, car titles, etc. in a fire-proof safe. I have friends who keep such documents off-site in a safety-deposit box. The fire-proof safe works for us. I also have electronic copies stored on a removable hard drive.

Important Documents -

We keep cleared checks, bank statements, and other important documents under lock-and-key in a filing cabinet. I have an accordion-style file folder for each year’s documents. When a new year begins, I simply store the previous year’s folder in the filing cabinet and start a new folder. Bills, checks, bank statements, etc. are filed alphabetically.

Electronic Documents -

For bills or other documents that I receive electronically, I keep a few in a folder on my computer’s hard drive, and store back ups on a removable USB hard drive.

Online Accounts -

In my browser, I have created a bookmarks folder labeled financial accounts. I have links to all of my financial accounts saved in the financial accounts folder. When I want to pay a bill online or take a look at my retirement account, I simply select the financial accounts folder, and click open all in tabs. I then have access to all of my accounts. I can log in to as many accounts as I need.

Inventory of Accounts -

I have a list of all of our financial accounts (places where we have money saved). I have a printed copy and I have a copy on my hard drive. Click here to view and download a blank copy of the inventory of accounts that I use. I update this inventory once per quarter. If you use this inventory, be sure to store it in a place where you (and your spouse) and only you (and your spouse) can access it.

Budget -

I use a the very simple, easy to use You Need A Budget software to manage our household budget. Click here to read about the zero-based budget method that we use. (YNAB is a long-time sponsor of No Credit Needed. I’m more than proud to promote their products and I use their pro version every day.) It usually takes me less than 30 minutes to create our budget, and less than 10 minutes per week to actually “manage” our finances.

Cash -

I do not like credit cards, and there are times when I do not feel like using my debit card. I am a big fan of the cash management system known as the envelope system. Click here to view a short video where I explain how the envelope system works for me.

The Process -

At the beginning of each month, I’ll sit down and create a monthly budget. My wife will look it over, and we’ll make any changes that she suggests. My wife gets paid at the end of the month, so on the 1st or 2nd of each month, I’ll deposit her check in our local bank. Any monthly bills are immediately paid, via online bill pay. Cash is “deposited” in our envelopes. Any paper bill stubs that we might have are filed away in the accordion-style file folder.

Two weeks into the month, I receive my paycheck. I deposit it in the local bank and then transfer any money allocated for savings to our ING Direct savings account.

As I receive bills throughout the month, I place them on a little table in our kitchen. One week before the end of the month, I’ll open them, make plans to pay them, and file any that need to be filed.

My goal -

My goal is to keep my life (and my mind) as uncluttered as is possible. I like for things to be “just so”. Before I began to reduce my debt and work on my finances, I was extremely disorganized. Having learned my lesson (a hundred times over), I know strive to be very organized. I want to be able to spend my time on the more important things (people) in my life. So, I have put a lot of work in to creating some systems that work for me. Hopefully, you’ll find some systems that will work for you.

Source: No Credit Needed

The Best Ways to Boost Your Retirement

2009-09-03T08:56:00.000-04:00

This is a guest post from Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the advisor for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks.

With the S&P 500 still down more than a third from its 2007 high, we’re all a little unsure about our retirement plans these days. So it’s time for some good old-fashioned elbow grease. A little effort now should make for a lifetime of security and peace of mind. And the first step is to run your numbers through financial calculators to estimate whether you’ll have enough saved to kiss the boss goodbye. (Metaphorically, of course.)

The calculators’ answers are important information. But what’s even more useful is changing the variables to see what most improves your chances for success. A retirement plan has a lot of moving parts — how much you save, where you live, when you start taking Social Security benefits — and some decisions will have a bigger effect on your nest egg than others.

The factors that have the biggest impact on a retirement plan vary from person to person. But to demonstrate how you can fiddle with your factors to analyze your own plan, let’s examine the retirement prospects of a hypothetical worker — whom we’ll call Hilda, as I’m a sucker for good German names — and see how dialing her numbers one way or the other changes her projected retirement income. Here are Hilda’s particulars:

Age: 55
Marital status: Single
Current income: $60,000
Desired retirement age: 65
Desired retirement income: $45,000
Estimated age at death: 95
Current savings: $100,000
Annual contributions to retirement accounts: $6,000
Assumed annual return on investments: 8%
For our analysis, we’ll use the “Am I saving enough? What can I change?” calculator found among the retirement calculators at The Motley Fool. Once you’ve entered your numbers and hit the “results” button, the calculator provides the number of months that it estimates your savings will last given your desired retirement income. In Hilda’s case, here’s the calculator’s analysis: “Your living expenses after retirement will be fully funded for 127 months.” Divide by 12, and you see that her money is expected to last 10.6 years. Unfortunately, that’s not good enough. If she wants to retire at 65 and expects to live until 95, she needs her money to last 30 years, or 360 months.

So what should Hilda do? Here are her options and possible outcomes, adjusted a single factor at a time.

Save More
Hilda’s current saving rate is 10% of her income. What if she ups that to 15%, or $9,000 this year? According to our calculators, that will make her income last 155 months — an additional 2.3 years. That’s a fine first step, but it still has her running out of money in less than 13 years.

Let’s say she, through a drastic lifestyle reduction, managed to contribute the maximum to her 401(k), which in 2009 is $22,000 for someone age 50 and older. That would supersize her portfolio enough to last an estimated 322 months, much closer to the 360-month mark. But she probably can’t save 36% of her income. She’ll have to look at other options.

Spend Less in Retirement
What if Hilda decides she can live on a retirement income of $40,000 instead of $45,000? After all, she’ll no longer be stuffing her 401(k) or paying Social Security and Medicare taxes (7.65% of each and every paycheck), and her income-tax bill will drop, too. Maybe she’ll also have eliminated her mortgage by then.

Dropping her annual income requirements by $5,000 adds 51 months (4.3 years) to her portfolio’s estimated lifespan. Not huge, but not negligible, either. However, Hilda feels this would be cutting costs a little too close. She wants to look at other possibilities.

Retire Later
What happens when Hilda continues to save just 10% of her income but retires at 68 rather than 65? In that case, she’d have three more years of saving, a higher Social Security benefit (because of her higher lifetime earnings and her beginning benefits later), and she’d need her money to last just 324 months.

In this case, her money would last 255 months, or 21.3 years. By retiring three years later, she’s doubled the longevity of her portfolio. But it still won’t last until age 95. However, if she retires just one more year later — at 69 — the calculator estimates her money will last longer than she will, which is the goal of any retirement plan.

Work in Retirement
Unfortunately, Hilda can’t stand the thought of working full-time for more than another decade. However, she’s open to the idea of working part-time for the first five years of her “retirement.” If she earns $30,000 in each of those five years, her portfolio’s life expectancy improves from 127 months to 237 months, or almost 20 years. That doesn’t get her to age 95, but it’s a significant improvement. In fact, for every year she works part-time in retirement, she adds about two years to the estimated endurance of her portfolio.

Quick note: Because Hilda’s “full retirement age” for Social Security purposes is 66, she shouldn’t begin taking Social Security until then if she’s still working. When you begin benefits before your full retirement age but then earn work-related income, your benefit can be significantly reduced.

Tap Home Equity
There are a few ways to use home equity to boost your retirement. Let’s see how Hilda could add these to her calculations.

First, let’s assume that she no longer needs her family-sized home. She actually has some equity in the home, so she sells it, buys a smaller home, and comes out with an extra $50,000. Realistically, given the state of real estate these days, it would take at least a year to sell her house and actually get that $50,000 into her hands to invest. If it earns 8% a year, it would add 58 months — almost five years — to the longevity of her savings. That’s a decent-sized boost, and that’s not counting the lower cost of heating, cooling, maintaining, and paying property taxes on a smaller home.

The other option is a reverse mortgage, which is when a bank pays you money based on the value of your home, and you don’t pay it back until you move. A reverse mortgage on a home currently worth $300,000 could provide a check of $1,200 every month that the borrower stays in the house, according to www.reversemortgage.org. Our retirement calculator doesn’t have an input field for reverse mortgage, but since it operates essentially like a pension, that’s where we’ll add the $1,200. Input “30″ in the “Years you will receive payments” field, and check the “First payment adjusted for inflation” button (but not the others). Click on the results and — voila! — Hilda’s retirement is fully funded.

While that’s encouraging, we should mention that it assumes Hilda’s mortgage is paid off before she takes out the reverse mortgage. If she moves before she passes away, she’ll have to pay off the loan. Plus, reverse mortgages can be expensive. So our preference is to put off taking out a reverse mortgage for as long as possible, perhaps using it only in the case of an emergency, such as needing in-home long-term care.

Change Your Expiration Date
Of course, Hilda’s original retirement plan is perfect as long as she dies within 127 months of retiring. All jokes aside, it’s worth remembering that we’re playing it very safe by assuming she’ll live to 95. According to the Social Security actuarial tables, only 10.3% of 55-year-old women make it to 95. If Hilda’s not in good health or longevity doesn’t run in her family, she might assume she’ll die at age 90. That doesn’t change how long her portfolio will last, but it does change how long she’ll need it to last.

A Mixture of the Factors
We looked at many variables in isolation, but the best solution for Hilda is to tweak several categories to find a combination of changes that she finds palatable. For example, if Hilda downsizes to a smaller home (resulting in a $50,000 investment a year from now), saves $200 more a month, delays retirement to age 66, and works part-time for the first two years of her retirement, her money will last until she’s 95. Considering all her options, Hilda decides these are adjustments she can live with.

The Bottom Line
Retirement calculators are very handy tools, but they’re not crystal balls. The results are based on many variables — such as inflation, investment returns, and Social Security benefits — that we can’t predict and could turn out worse than expected.

How should you handle this uncertainty? Run your numbers once a year, using updated account balances, savings rates, and benefits projections (for example, put in the estimated Social Security benefit found in the statement you receive in the mail three months before your birthday each year).

Also, different calculators provide different results, so don’t rely on just one. For additional opinions, check out:

FIRECalc (FIRE = financial independence/retire early)
The T. Rowe Price retirement income calculator
The ESPlanner (economic security planner)
The flexible retirement planner
TD Ameritrade’s WealthRuler
Despite their shortcomings, retirement calculators do a good job of estimating the value of one decision over another. For Hilda, the variable that had the biggest impact on her plan was retiring a few years later. But it will be different for other people. As one example, boosting a savings rate from 10% to 15% would have a much bigger payoff for younger investors than it did for Hilda, who was already within a decade of her target retirement date.

What will provide the most power to your plan? There’s only one way to find out. Visit a financial calculator and start plugging away.

Source: Get Rich Slowly

66 Ways to Save Money

2009-09-02T10:21:00.001-04:00

For most kinds of purchases, you can get valuable advice and comparisons on the Internet. Ask a librarian or friends which Internet sites they think are helpful, or you can use a search engine like Google or Yahoo. Be aware that information you find is often biased. At many websites, the only products or sellers listed are ones that pay to advertise. Before buying anything on the Internet, check several websites and make sure you deal with reputable dealers.

Transportation
Airline Fares
Compare low-cost carriers with major carriers that fly to your destination. Remember, the best fares may not be out of the airport closest to you.
You may save by including a Saturday evening stay-over or by purchasing the ticket at least 14 days in advance. Ask which days of the week and times of the day have the lowest fare.

Even if you are using a travel agent, check airline and Internet travel sites, and look for special deals. If you call, always ask for the lowest fare to your destination.

Car Rental
Since car rental rates can vary greatly, compare total price (including taxes and surcharge) and take advantage of any special offers and membership discounts.
Rental car companies offer various insurance and waiver options. Check with your automobile insurance agent and credit card company in advance to avoid duplicating any coverage you may already have.

New Cars
You can save thousands of dollars over the lifetime of a car by selecting a model that combines a low purchase price with low depreciation, financing, insurance, gasoline, maintenance, and repair costs. Ask your local librarian for new car guides that contain this information.

Having selected a model and options you are interested in, you can save hundreds of dollars by comparison shopping. Get price quotes from several dealers (over the phone or Internet) and let each know you are contacting the others.
Remember there is no “cooling off” period on new car sales. Once you have signed a contract, you are obligated to buy the car.

Used Cars
Before buying any used car:
Compare the seller’s asking price with the average retail price in a “bluebook” or other guide to car prices which can be found at many libraries, banks, and credit unions.

Have a mechanic you trust check the car, especially if the car is sold “as is.”
Consider purchasing a used car from an individual you know and trust. They are more likely than other sellers to charge a lower price and point out any problems with the car.

Auto Leasing
Don’t decide to lease a car just because the payments are lower than on a traditional auto loan. The leasing payments are lower because you don’t actually own the car.

Leasing a car is very complicated. When shopping, consider the price of the car (known as the capitalized cost), your trade-in allowance, any down payment, monthly payments, various fees (excess mileage, excess “wear and tear,” end-oflease), and the cost of buying the car at the end of the lease. A valuable source of information about auto leasing can be found in Keys to Vehicle Leasing: A Consumer Guide, which is published by the Federal Reserve Board and Federal Trade Commission.

Gasoline
You can save hundreds of dollars a year by comparing prices at different stations, pumping gas yourself, and using the lowest-octane called for in your owner’s manual.
You can save up to $100 a year on gas by keeping your engine tuned and your tires inflated to their proper pressure.

Car Repairs
Consumers lose billions of dollars each year on unneeded or poorly done car repairs. The most important step that you can take to save money on these repairs is to find a skilled, honest mechanic. Before you need repairs, look for a mechanic who:
is certified and well established; has done good work for someone you know; and
communicates well about repair options and costs

Insurance

Auto Insurance
You can save several hundred dollars a year by purchasing auto insurance from a licensed, lowprice insurer. Call your state insurance department for a publication showing typical prices charged by different companies. Then call at least four of the lowest-priced, licensed insurers to learn what they would charge you for the same coverage.

Talk to your agent or insurer about raising your deductibles on collision and comprehensive coverage to at least $500 or, if you have an old car, dropping this coverage altogether. This can save you hundreds of dollars on insurance premiums.
Make certain that your new policy is in effect before dropping your old one.
Homeowner/Renter Insurance

You can save several hundred dollars a year on homeowner insurance and up to $50 a year on renter insurance by purchasing insurance from a low-price, licensed insurer. Ask your state insurance department for a publication showing typical prices charged by different licensed companies. Then call at least four of the lowest priced insurers to learn what they would charge you. If such a publication is not available, it is even more important to call at least four insurers for price quotes.

Make certain you purchase enough coverage to replace the house and its contents. “Replacement” on the house means rebuilding to its current condition.
Make certain your new policy is in effect before dropping your old one.
Life Insurance

If you want insurance protection only, and not a savings and investment product, buy a term life insurance policy.

If you want to buy a whole life, universal life, or other cash value policy, plan to hold it for at least 15 years. Canceling these policies after only a few years can more than double your life insurance costs.

Check the National Association of Insurance Commissioners website or your local library for information on the financial soundness of insurance companies.
Banking/Credit

Checking Accounts and Debit Cards
You can save more than $100 a year in fees by selecting a free checking account or one with no minimum balance requirement. Request a complete list of fees that are charged on these accounts, including ATM and debit card fees.
See if you can get free or lower cost checking through direct deposit or agreeing to ATM only use. Be aware of charges for using an ATM not associated with your financial institution.

Click here to keep reading

Source FTC

How to Set Goals When You Have No Idea What You Want

2009-09-01T08:30:00.000-04:00

Dumb Little Man had this insightful post about goal setting for the rest of us:

You’ve heard about the importance of goal setting; we all have. You know that people with written goals succeed, and you might have read all about achieving ambitious goals.

The problem is, you don’t have any ambitious goals. You don’t have any goals at all. You’re not really sure what you want from life – maybe something a bit more than what you’ve currently got, but every time you try to write a list of goals, it seems like a futile exercise.

Here are four ways to identify the goals that you really want.

Relax Your Ideas on What “Goals” Mean
We often think that a “goal” has to be something big. Maybe you’ve got the impression that goals need to be about money, or success in some way that society has defined.

Relax! A “goal” is simply something which you’d like to do or achieve. It could be buying a house or a car, yes, but it could also be something which might matter to no-one in the world except you – perhaps your goal is to learn to bake cakes as good as the ones your grandma used to make.

Goals aren’t things that you feel you “should” do, and any good life coach will steer you away from goals that have been imposed upon you by other people.

Start With What You Enjoy
We all have natural interests and passions – things that we get really excited about (even though our friends and family might be bemused). Perhaps you absolutely love everything to do with baseball. Maybe you really enjoy playing the trombone. It could be anything!

Write down a list of five or ten things that you really enjoy. Is there a goal buried in any of them? Perhaps you’ve always had a desire to coach Little League. Maybe you’d really like to play your trombone in front of an audience (even though the idea scares you a bit).

What goals arise from your interests? How could your hobbies become part of something bigger and more meaningful in your life?
If That Doesn’t Work ... Think About What You Don’t Want
You might have a really hard time figuring out what they want from life. Perhaps your interests and hobbies don’t seem to lend themselves to any actual goals. In this case, try writing a list of things you don’t want. That could be things like:

I don’t want to be overweight

I don’t want to live a life without meaning

I don’t want a bad relationship with my partner (family/kids/etc)

I don’t want to work in a job I hate

Write down whatever comes into your mind. Now turn these around to find your goals! For example, the above list would become:

I want to reach and maintain a healthy weight

I want to have a meaningful life

I want a good relationship with my partner (family/kids/etc)

I want to work in a job I love

Consider the Key Areas of Life
In the great book, The Success Principles, Jack Canfield suggests that there are seven areas where you should consider setting goals, and lists these categories as:

Financial

Job/career

Physical health

Relationships

Personal development

Community

If you’re still stuck in your goal-setting, go through these seven key areas. Do you have a gut feeling that any of them are lacking or out of balance in your life? Do any particular goals or ambitions come to mind?

You might find it a useful exercise to write down a score for how you feel you’re doing in each area (from 0-10, with 0 being “awful” and 10 being “perfect”). Look at the areas where you score low. What could you do to raise that score? What goals might you set?

Can You Avoid Bank Fees?

2009-08-31T09:09:00.001-04:00

I don't pay any bank fees, except rental on my safe deposit box. That leaves me of two minds about the fees. On the one hand, I feel bad because the fees tend to fall hardest on the people who can afford them the least--the poor, the ignorant, the stupid, the careless, the lazy, and the unlucky. On the other hand, the fees other people pay help cover the costs of the many free services that I get from the bank.

Economic research firm Moebs Services just announced results from a survey that indicated that fees are now providing the bulk of bank profits. In fact, at almost half of all banks, overdraft fees alone exceed total bank profits.

Banks use a lot of tricks to maximize the fee income. In particular, they process the largest checks first. If one big check overdraws your account, the bank can then charge an overdraft fee on every check that clears. If they processed the checks in the opposite order, they might only be able to charge the overdraft fee on the last one. (Another trick is to add new fees with little fanfare, so that you don't know you're paying them until you check your bank statement.)

Most people are like me, paying little or nothing in the way of bank fees. For example, according to an FDIC report last year, less than 14% of all bank customers pay over 93% of the overdraft fees.

Although the poor tend to get hit most with fees, it isn't primarily the poverty that does it. The key to avoiding bank fees is keeping your finances under control. The only way that just being poor exposes you to fees is that the narrower the gap between your income and your expenses, the harder it is to keep your finances under control. You have less room for error and are more vulnerable to simple bad luck. But being poor tends to be associated with other things that make it tougher to avoid bank fees.

If you're poor, you can't afford to keep a large minimum balance. If your parents were poor, they may never have learned that it's not necessary to pay ATM fees and bank transfer fees and fees to check your balance and fees to talk to a teller. And whole categories of poor people are not only poor--they're poor and they don't speak English, or they're poor and they come from a cultural background that doesn't trust banks. These people easily fall victim to predatory firms that charge huge fees for services like check cashing and small loans.

So, poor or not, how do you avoid bank fees? After the obvious things--don't overdraw your account and don't go overlimit on your credit card--the most important step for avoiding bank fees is to read the stuff from your bank and understand what services are free and what services aren't. Because every bank makes many services available free to certain customers. You just need to make sure that you're one of those customers.

Common special deals
Bank fee structures are, of course, ridiculously complicated. Most banks have multiple fee structures, depending on things like what kinds of accounts you have, which services you use, minimum balance, and even age (seniors often get good specials; students often get crappy ones). There are a few practices that show up pretty often, even if they're not universal, so it's worth being aware of them.

High minimum balance
Lots of banks offer no-fee deals for people who keep a certain minimum balance. (At some banks there are several tiers of these.) With interest rates as low as they are now, it costs very little to leave some cash lying around in your checking account. It'd take a couple years for the lost interest from having $1000 sitting idle in your checking account instead of in an internet savings account to add up to as much as just one bounced check fee.

Packages of accounts
Lots of banks offer package deals, where certain fees are waived if you get a certain group of accounts (savings, checking, line of credit, etc.). The idea is that if they can pull in a certain critical mass of your financial activity, it'll increase the chance that you'll use them for other, high-profit services like your mortgage and your IRA.

Packages of services
Many banks have long waived some fees if you have your paycheck directly deposited into the bank. More recently, some banks have started offering higher rates to people who agree to some minimum number of debit card transactions. Others offer deals to people who use the bank's bill paying service.

Any of these can be a excellent deal if the packages or minimums happen to match how you were going to arrange your finances anyway. The banks are all a little different, so look around and see if you can't find one that's a good match.

This is another place where the poor tend to get nailed: If they live in a poor neighborhood, they probably don't have a dozen different local banks to choose from, reducing the chance that they can find one that offers a deal that matches their circumstances.

Other financial fees
Because there's so much money in fees for financial services, everybody is trying to get in on it--including states. Many states have started making cash assistance (unemployment, food stamps, etc.) available via a debit card--but a debit card that comes loaded up with fees: fees for using an ATM, fees for checking your balance, fees for trying to charge more than is left on your card. There are even fees for not using your card! (That probably doesn't deserve an exclamation point--lots of kinds of accounts have inactivity fees these days--but I still find it shocking.)

Like with other bank fees, most of these are avoidable if you understand the rules, and not too onerous as long as the cash assistance isn't your only source of income.

The easiest thing to do for things like unemployment insurance where you're allowed to get the money as cash, is to do just that. You typically get one free cash withdrawal per month at an in-network ATM. Use it to get all the money out and put it into your regular bank account. If you're not allowed to get the money as cash (as with debit cards for food stamp benefits), you can minimize fees by treating it like an ordinary debit card--track each transaction and keep a running balance so you don't have to pay a fee to check the balance. Then, use the card to pay for whatever's allowed until the money runs out.

Avoiding fees is pretty straightforward for people whose finances are under control. They know what services they need, so they can shop around and find out which banks offer those as free services (with which kinds of accounts). They pay attention to things like which ATMs they can use for free. They keep track of their balance and don't overdraw their account. If they need a service that isn't free, they shop around to find where they can get it cheapest.

It's not that much work to nail down all these details, and over time it can save a fortune in fees.

Source: WiseBread