Monthly Archives: June 2012


It’s hard to find an area that has been harder hit by the current recession than Las Vegas. At the onset of the mortgage fiasco, Las Vegas was the fastest growing city in the United States. Houses were being constructed at break neck speed, and people were moving there in droves. And then……… all fell apart. Entire neighborhoods sat empty. Brand new housing tracts and shopping centers sit, unused and forgotten.

And now it appears as though some creative thinking has gotten a hold of the North Las Vegas city council. They have officially declared a state of emergency. No, the city isn’t on fire, No, there is no flood that has washed away a chunk of their town, no earthquake, plague or tsumami to report of, just lack of money.

What’s that, you say?  Having no money can warrant a state of emergency?!? If that was the case I would have declared a State of Emergency a long time ago! Maybe my good ol’ Uncle Sam could send me a couple of bucks to help. Well…..probably not.

It seems to me that there is a loophole in the “state of emergency” declaration. Typically, when a wildfire or earthquake or other natural disaster hits, you could declare a “state of emergency” and it would loose up held funds, and the State or Federal Government could send some much needed money to help with the recovery. But financial emergency?

True, there is nothing specific in the “books” that states what determines an emergency, but financial emergency sounds a bit iffy to me.

Years ago, there was an ad campaign with a rather obnoxious guy in a suit covered in question marks. He stood in front of the capital buiding in Washington D.C. and yelled at me that there was millions of dollars in Washington ready for me to use, and all I had to do was ask for it. So I ponied up the $49.95 and sent for his book. It listed hundreds of programs set up by local and federal agencies to help me. Problem was, not one of them was specific towards me and my situation. But, a specfic chapter told me how to address this little “problem”. Lie.  Okay, maybe not lie, but stretch the truth. Bend the rules so to speak. As an example, if a program was designed to help defray the cost of a daycare facility, and I had a child or two that were too young for school and staying at home, I simply write a name of my “child care” facility on the application and presto……I get a check. Sneaky ?……you bet. But now it seems the same method is being used to apply for government help in the application for North Las Vegas’ declaration of a State of Emergency.

If you took a look at my budget, I don’t think anyone would argue my financial state of emergency. But does that mean I get money from Sacramento or the Feds to help with my recovery? No way! I would be told to hit the road and file for bankruptcy.

I have mentioned in prior blogs, of cities and munipalities, filing for bankruptcy protection under Chapter 9 of the Bankruptcy Code. Most recently, Stockton has anounced it’s plan to file for bankruptcy protection. It’s a tough economy and it calls for tough decisions, but to tuck tail and run to the Capital whining about finances, who do they think they are? Chrysler? This stinks of another, albeit smaller, bailout. A bit like  Oliver asking, “Please sir, might I have some more?”

Once upon a time, North Las Vegas was booming. During the housing rush of 2005 and 2006 property values soared, and so did property taxes. The city council should have socked away the excess funds from these skyrocketing property tax bills for a rainy day. But, no……you spend what you make. And like so many of us, when the money flows, so do the expenses. Upgraded streets and lights. Repaving projects, shopping centers, schools, fire departments, salary increases, pensions. Spend…..spend….spend….. And then as quickly as it all had started, it was over. Property values plunged and so did revenue from property taxes. And now with no revenue and no money saved, they crawl to Washington with their hands out asking for tax payer handouts.

Don’t get me wrong, when a natural disaster hits, it’s necessary to ask Uncle Sam for help. No local government has that amount of money saved to recover from these disasters. But if the disaster was due to the short sightedness of the local city council, then suck it up, file for bankruptcy, and start fresh. Don’t take my money to buy a bandage for your hemorraging budget. Chances are that you will end up filing bankruptcy anyway.

But, the city hasn’t stopped there. To garner local support they have spent even more money that they don’t have and put together a campaign regarding the recent layoffs at the police departments. Billboards around town yell; “Warning: Due to recent police layoffs, we can no longer guarantee your safety!”.    What is that?! Scare tactics?! Perhaps instead of paying for billboards, they could pay for police salaries. And speaking of salaries, one has to wonder what the salaries of the North Las Vegas City Council are currently.

Okay……I think at this point,  I may need to calm myself down. I don’t have anything against North Las Vegas, in fact I have found the several other cities have attempted this same tactic but they have all been met with legal challenges. Stockton included. But, it doesn’t excuse their behavior in my book. Face facts. You blew it. Now get over yourselves, file for bankruptcy, pick up the pieces and move on.

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Well, it happened. Your debt load was just too much and you had no choice but to file bankruptcy. Don’t feel bad. Over 1.4 million bankruptcies were filed in 2011 alone. In fact, many famous people have filed for bankruptcy protection. Cyndi Lauper, Tammy Wynette, P.T. Barnum, Walt Disney and even Abraham Lincoln, have all filed for bankruptcy. So, don’t feel so bad, you’re in good company.

The fact is that bankruptcy exists for a purpose. You need a fresh start, a do-over, if you will. Yes…yes…. I know, there are some people that abuse the system, but in most cases, people file bankruptcy because it is necessary.

So, regardless of why you filed, the question remains, “Now what?”

Once your case discharges you can lean back, take a deep breath and relax. Yay! No debts! No harrassing phone calls!  No credit score! Wait……..rats. Yeah I know, your credit score has been damaged, but it doesn’t have to stay that way.

The first, and most common, thought is “I will never apply for a credit card again!”  Sounds good, but believe it or not, it is not a good idea. The fact is, if you do nothing after a bankruptcy, your credit score will remain low for many many years.

Recently, I have had two of my friends tell me that they filed bankruptcy around 3 years ago. One of them told me that he recently ran his credit and was disappointed to see that his credit score was the same as it was right after his bankruptcy case discharged. The other told me that he recently purchased a home, financed a jet ski and had a credit score in the high 600’s.  They both filed about the same time and both had similar debts. So why was there such a difference in their credit scores?

Well, one of them applied for a credit card right after his bankruptcy was completed. Sure, it was a small card with high interest, but he used it. He carried a small balance on it, used it, paid it, used it. After a year or so, he received an offer from a larger bank for a credit card with a larger credit line and lower interest. He got that card and used it. After another year he financed a small car with a small payment. Three years after his bankruptcy, he had a high enough credit score to purchase a home!  All of these methods helped to rebuild his credit score. Credit cards, auto loans and mortgages. The big three. And now his credit is so solid it is like he never filed for bankruptcy.

The other one subscribed to the idea that he will never apply for a credit card again. And so he didn’t. And three years later, his credit score hasn’t changed.

So, doing nothing after a bankruptcy is a bad thing. Do something, but be careful. It can be very easy to over-extend your credit and find yourself in the same boat you were in a couple years ago.

When you do get your new credit card……use it! Leaving an open credit line with no balance is a bad thing. If you get a credit line of $500, carry a balance of around $100-$200 on it. Don’t let your balance get to low or too high. Strange..I know, but true. Too much available credit is bad, and having a balance approaching the credit limit is also bad.

It generally will take two to three years to recover from a bankruptcy filing. They may be difficult, but if you do things right, the benefits from filing bankruptcy and rebuilding your credit score afterwards are huge! Like life itself, good things happen, but you must work for them.

It think it was Socrates that said “Do nothing, and nothing happens.”  Come to think about it, maybe it was Yoda that said it.

For more information about bankruptcy and how we can help solve your debt problems, please visit:

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There are lots of places out there that promise, for a “small fee”, to repair your credit. There are also lots of places out there that promise I can make $4,000 per week from home. I do not necessarily believe either of them.

I think the real issue is the terminology. I think a better way to word it would be “correct your credit”  I have heard many people tell me that they heard you could “clean” your credit report of negatives such as lawsuits and bankruptcies. But nothing could be further from the truth.

To better explain, I think it’s necessary to know just what a credit report is and what it does. Okay, we all know that our debts are on the reports, and if those debts are bad then our credit score will go down. But what many may not know, is that “actions” also are reported. Actions on your credit report can include, repossession, foreclosures, lawsuits, bankruptcies and bounced checks. If you are sued by a creditor then, in effect, that creditor is listed twice on your credit report. Once as the debt, and again as the lawsuit.  Taxes can be reported and may even show as a tax lien on your credit. All of these “actions” will help to bring down your credit score.

So how do you repair your credit? Well,  you don’t. If something is being reported in error, then you can dispute the validity of the claim and have it removed. (Corrected. Not repaired.) I know. Symantics…..but still.

But be not dismayed, all is not lost. It is possible to have actual bad debts removed from your credit report. The simplest way is to simply let it expire. A general rule of thumb is that bad debt stops being reported after 7 years and actions(such as judgments and bankruptcies) after 10 years. But in some cases, such as a judgment, the judgment can be renewed for another 10 years. Several other things can reset the statute of limitations and keep bad debts on your credit report for a long…long…long time.

If you don’t feel like waiting around for a decade or two, it is possible to simply ask a creditor to remove the bad debt from your credit report. What?!?! It’s true. You can write or call a creditor and give them an explanation and if you can convince them, they can just remove the debt. Believe it or not, there is no law that requires a creditor to report your bad debt. But most creditors seem to have nothing better to do than destroy your good name. So, give them a call, give them a real good sob story and have them remove it. Good luck! Let me know how that works out for you.

Another technique is to file a dispute with the reporting agency. A creditor must provide evidence of the debt within an alloted time after a dispute is filed. If they cannot provide the evidence, the debt is removed. And since in many cases, the debt has been sold and resold from collection agency to collection agency, many times the original paperwork has long been lost. So feel free to exploit the incompetency of your creditors and dispute those debts. And to make that real easy for you, here is a sample dispute letter provided by the FTC website.

While the preceeding may be considered as “cleaning” your credit report, and in fact, these options do exist (on paper) they are unlikely to work out in your favor. So, while “cleaning” your report may technically be possible, it is very unlikely.

After you have corrected and …um….”cleaned” your report, it is wise to stay on top of your credit reports and review them regularly. Avoid companies that promise “free” credit reports, even if they do have a snazzy jingle sung by a hipster rock band. You will end up getting signed up for a  credit monitoring service that charges a monthly fee. Why pay someone for something that you are able to get yourself for free? Go to and you can run all three reports free of charge. It is easy and fun! Okay, maybe not fun, but it is easy. You can run just one or run all three. I typically will run transunion, then four months later, I will run equifax, then four months later I wil run experian. This way I get a free credit report once every four months. It is not uncommon to find a debt on my credit that does not belong to me.

So, get your credit report corrected and accurate. Review them regularly for errors, and feel free to attempt to “clean” your credit report. Your future….and your very life depends on it! Okay, maybe that was a little overdramatic, but you get the point.

For more information about bankruptcy and how we can help solve your debt problems, please visit:

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